A Favorite Hobby for Financial Analysts
Once a week it seems that a new financial analyst comes out with astronomical projections about Myspace’s monetization of traffic. Last week I wrote about an analyst that’s projecting in excess of $30 million a month for Myspace. Then today, Business Week published an article referencing a Merrill Lynch analyst who believes Myspace will generate $271 million this year. While these projections differ greatly, they are both fairly significant. If Myspace can generate anywhere near these numbers, I have to believe that Facebook is on path to become a highly profitable company. The real challenge that will face these companies is not whether or not they can attract visitors, since they have already proven their performance. Instead, the challenge will be forging long-term relationships with advertisers and custom advertising campaigns. As Google has embraced their role as a leader in online advertising, so too must the social networking juggernauts.