‘Portalization’ of MySpace

An article in the eMarketer newsletter today predicts that the “four big portals” (Google, Yahoo!, AOL, MSN) are grabbing an increasing share of online ad spending:

Add to that a fifth contestant, MySpace, which is rapidly moving from “social networking” site to a portal play.

The mainstreaming of MySpace is all-but-complete complete with the launch of 2008 US presidential candidate sites. The model for MySpace is Yahoo! as it angles toward further ad revenue growth. Historically major advertisers have been squeamish about social networking sites — although that’s rapidly changing — but MySpace will increasingly seek to “institutionalize” itself as a portal rather than remain something of a novelty as a “social network.”

But as MySpace does so its value as an actual social network becomes thinner and thinner somewhat paradoxically. The size of the site brings diminishing returns for users, except those seeking to market themselves.

However, don’t get me wrong, I applaud what they’re doing generally with Impact.

Greg Sterling is the founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior and the relationship between the Internet and traditional media, with an emphasis on the local marketplace.