Merrill Lynch Conference: Levinsohn Touts MySpace As Facebook Rises; Google Contract Will Be Signed

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During the Q&A portion of his presentation at Merrill Lynch’s Media & Entertainment conference in Marina Del Rey, CA, Peter Levinsohn, president at Fox Interactive, part of News Corp. (NYSE: NWS), expressed a degree of weariness at being asked (yet again) about the status of the $900 million search/ad pact with Google (NSDQ: GOOG). He repeatedly insisted that everything is fine between the two and they will eventually get around to signing the “long form” version of their contract:

“The Google deal is a signed deal, it’s not something that was done on the back of a napkin. It is a signed, 20-plus page document. I say that not in a defensive way, just to be clear. The relationship is actually pretty good. We have completely integrated Google into our site. We have our own guarantees that we have to meet for Google, which we’ve been way more than exceeding. Google’s been obligated to pay us for months now, as they have been. As to why the document is not signed, there’s a lot of opportunities to explore. And every time we get into a conversation about something new that we can do together, that stalls the process. We’re very close to a long-form, but frankly, the bigger priority is that the working relationship is going well.”

In general, armed with slides and stats, Levinsohn’s appearance served to offer a vigorous defense of MySpace’s continued dominance as it contends with increased competition with Facebook:

MySpace vs. Facebook: Engagement numbers dipped slightly in August, though MySpace still gets three times more visitors than Facebook. “Of course, there’s lots of smart people in this room and you’ll tell me that doesn’t mean anything – of course you’re going to have those numbers because you have over two times the audience that Facebook has. I obviously understand that, which is why we prepared the next slide, which breaks it down to a per-user basis. The slide tells us that the MySpace user visits the site substantially more frequently than the facebook users. Facebook average visits have declined when they opened up their platform in April. But in any event, MySpace users visit the site 30 percent more frequently than the Facebook users. There’s a simple reason for this. MySpace is a true social media platform and there’s simply more to do there.” He also pointed to stats that show MySpace user spent an average of 28 minutes more a month on the site compared to Facebook members.

Key Engagement, Revenue Drivers: Media is an engagement driver. The launch of a MySpace IM – has already exceeded 20m million downloads and 8 million active users, the fourth larges IM tool in terms of reach. The introduction of MySpaceTV and the debut of its first mobile application with Cingular, also contributed to its growth, “How did we do in our first full fiscal year as a company? We generated more than a half a billion dollars in revenue and we have big, achievable goals for the year.”

Global Expansion: Local MySpace sites were launched in 18 countries over the past year. Plans call for 10 more launches over the next year.

MySpaceTV: MySpaceTV, which debuted in June, is the number two online video site, with 635 million streams a month. Partnerships with Fox, Hulu, Sony (NYSE: SNE), NBA, MTV and others. New content from Photobucket also will be integrated into MySpaceTV over the next few months. Pre- and post-roll will play a major role in monetizing the site over the next year. “Just as a side note, three of the past four weeks, the top 20 videos on MySpaceTV actually out-performed the top 20 videos on YouTube.”

Taking Advantage Of Mobile’s Rise: “The U.S. mobile advertising market is expected to grow from $421 million in ’06 to nearly $5 billion in 2011, with worldwide expected to reach $2.7 billion alone. To take advantage of these opportunities, we’re in the process of launching a completely new website to provide our users with free, ad-supported content and services on their mobile devices. So stay tuned for an announcement very shortly.”

Targeting Initiatives: “What I’m most excited about is our targeting initiatives at FIM.” Interest targeting, which is designed to leverage registration data and data from profile pages, was rolled out in July as part of the system’s first phase. Divided users into 10 enthusiast segments, including music, electronics, movies, finance, auto, gaming, health. “Out enthusiast channels exceed the reach of many popular channels both online and off. For instance, we have greater concentrated reach in the auto category than Auto-By-Tel and more in sports than ESPN the magazine. The same is true in the fashion category when compared with Cosmopolitan and Glamour Magazine.”

FIM’s Hiring: The unit currently employs 1,800 people. Levinsohn said he expects it to grow to roughly 2,700 by next June. Webcast

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