MySpace U.S. Ad Sales Expected to Fall While Facebook's Rise

MySpace logo The folks over at MySpace (s nws) sure have a lot on their plate, and the pressure is mounting. It’s no secret that the News Corp.-owned social network is playing catch-up with Facebook‘s rising traffic, and the expiration date on its advertising deal with Google (s goog) is looming. Now, in addition, U.S. advertising spending on MySpace is expected to fall 15 percent in 2009 to $495 million, The Wall Street Journal reports, citing a study from research firm eMarketer.

News Corp. chief Rupert Murdoch, MySpace CEO Owen Van Natta, and the rest of the MySpace team better start making headway with their turnaround strategy for the social network — and fast, or falling behind in traffic won’t be its only Facebook-related worry. U.S. ad spending on Facebook is expected to rise 9 percent to $230 million in 2009, and the Palo Alto, Calif.-based company is on track to exceed MySpace in advertising dollars by 2011, according to the Journal. Though Van Natta has been shaking things up at MySpace with a series of layoffs in the U.S. and abroad, it’s going to take more than downsizing to help the floundering social network regain the status it once held — if it can at all.

But MySpace isn’t the only one in trouble. Online advertising on social networks is expected to be down sharply from previous estimates in December. According to the Journal:

EMarketer predicts that U.S. ad spending on social networks will drop 3 percent to $1.1 billion this year. In December, it projected growth of 10.2 percent for 2009 to $1.3 billion.

A lot can happen before 2011, and MySpace will need to work something out with Google before that funnel of advertising revenue is cut off. MySpace still leads the social networks in U.S. advertising dollars, according to the Journal, and Murdoch has expressed that News Corp. is working hard to improve MySpace. It will be interesting to see how and when these changes on MySpace will happen, especially as Facebook keeps chugging ahead with over 200 million users and counting.