Social Networks And Video-Sharing Sites Losing Their Promise

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By Douglas A. McIntyre Published

A look at News Corp (NWS) earnings shows that the "other" revenue and profit line, which is mostly its online service MySpace, only had an operating profit of $23 million. MySpace is one of the largest websites in the world. That can’t be good for the value of social networks. So far, there is not a lot of evidence that the universe’s largest video-sharing site, YouTube, is bringing in much money for Google (GOOG).

According to The Wall Street Journal an "issue is advertiser comfort with having their ads displayed alongside less-predictable content."

Predictability is not the entire problem. Social networks and video-sharing sites are a maze of unrelated content of questionable quality. Sites like MySpace have a large portion of their members who are weirdos and agoraphobics. Advertisers who spend any times on these sites know that.

Video sharing sites tend to have very poor picture resolution. Among the most popular videos on YouTube this week is one of a man on foot racing an Aston Martin. Heady stuff.

Part of the reason that AOL, Yahoo! (YHOO), and MSN have some value is that Web 2.0 has much less value than the markets wanted to believe. At least at portals, the content is categorized.

Web 2.0 content is a bust. But, no one wants to admit it.

Douglas A. McIntyre

Contact [email protected] for any questions or corrections.

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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