Search Engine Watch reports that, according to analytics firm Covario, Yahoo ate into some of Google’s share of the paid search market in the second quarter ended June 30, 2008. Meanwhile, spending on paid search as a whole dropped from 52 percent to 43 percent in the same period.

Do we just take Covario’s word for it? Neither the Search Engine Watch article nor Covario actually tell us how much share Yahoo nabbed from Google. However, the finding IS consistent with AdGooroo’s claim that Google’s share of paid search slipped, while Yahoo’s marginally increased last quarter.

Source: Nathania Johnson, “Yahoo Snags Search Ad Marketshare Gain at Google’s Expense”, Search Engine Watch, August 11, 2008

Debra Aho Williamson, senior analyst with eMarketer, has done a little analysis and reckons MySpace is becoming better at monetizing its U.S. website visitors.

Assuming MySpace constitutes 80 percent of Fox Interactive Media (FIM) (the division of which MySpace forms part), and based on FIM’s revenues of $225 million in the June quarter… then MySpace’s revenues were $180 million over the same time period. Further, if you assume - as eMarketer does - that MySpace’s revenues were 23 percent greater than the June 2007 revenues, then based on the fact that its average monthly unique visitors were 82.22 million in the June quarter last year and 87.65 million this year… then MySpace is making more money per visitor.

Dividing the quarterly revenue by three… then while MySpace made $0.59 in revenue per U.S. visitor in the quarter ended June 2007, it made $0.68 per U.S. visitor in the quarter ended June 2008… a 15 percent rise.

Nice (guess) work, eMarketer. I’m not just being facetious - eMarketer’s calculations may be close to the truth. MySpace’s HyperTargeting offering - where display ads are targeted based on user profiles - now accounts for one-half of all MySpace ad buys, and costs more than double its regular ad offerings in terms of CPM (cost per thousand). So if MySpace is selling a similar volume of ad impressions, but earning double the amount of money on half of those insertions, you would expect ad revenues to be higher.

Now that’s all very well for MySpace… but are advertisers getting results from MySpace? I know of at least two major corporates that have had woeful results from advertising on MySpace (i.e. I’ve SEEN their results), but that could be due to a range of factors, including aiming at the wrong demographic.

If anyone is seeing a decent return on investment from advertising in MySpace, get in touch and tell us about it. But please, don’t tell me it’s great for branding… (the common excuse used by marketers who don’t understand direct response marketing).

Source: Debra Aho Williamson, “Monetizing MySpace Traffic”, eMarketer, August 11, 2008

What’s the most profitable industry online? Those in the know will say pornography. But those REALLY in the know will say that porn is not as profitable as everyone thinks.

Just recently, Playboy posted a net loss of $2.1 million - amounting to a 6 cent loss per share - for the second quarter ended June 30, 2008. While much of that was due to decreased ad sales in Playboy’s print and broadcast media properties, the company’s digital business also struggled. Online/mobile revenues were $11.6 million for the quarter, down from $14.8 million earned in Q2, 2007.

The online porn business is still like any other business: it relies on product innovation, customer satisfaction, effective marketing, sound financial management, and so on, to be successful.

Source: Press Release, “Playboy Enterprises, Inc. Reports Second Quarter 2008 Results”, Yahoo Finance, August 6, 2008

Looking at News Corporation’s financial results for the fourth quarter ended June 30, 2008, it appears that the company’s online division – comprising MySpace - has increased revenues, whilst earning less profit.

Given that MySpace forms part – albeit the main part of News Corp’s Fox Interactive Media (FIM) – and its reporting doesn’t distinguish between the results of FIM and those of MySpace, it’s impossible to say precisely how MySpace fared in the last quarter. However, if FIM’s performance does mainly reflect that of MySpace, then it’s indicative that FIM’s fourth quarter revenues were $225 million - up 23 percent from its Q4, 2007 revenues, and up from the $210 million in Q3, but down from the $233 million in Q2.

And while News Corp’s quarterly report doesn’t specify the actual profits achieved by FIM in Q2, the company did reveal, during a conference call, that higher costs had caused FIM’s operating income to decrease for the quarter.

Sources: Peter Kafka, “News Corp. Q4: TV Terrible As Promised; MySpace Revenues Up, Profits Down (NWS)”, Silicon Alley Insider, August 5, 2008