Kara Swisher

Recent Posts by Kara Swisher

Facebook: The What-chu-talkin-bout-Willis Ad Conundrum

The one truly interesting factoid in The Wall Street Journal’s piece about the efficacy (or lack thereof) of Facebook’s engagement ads today was this one about its results in the graphical ad business versus rival MySpace:

The company says 70 of the U.S.’s 100 largest advertisers have advertised on its site since 2007. But its share of total number of U.S. online display ad views was just 1.1 percent, according to market research firm comScore Inc., in its most recent report in June.

News Corp.’s Fox Interactive Media Unit, which includes rival MySpace.com, is the market leader with 15.9 percent of display-ad spending, according to comScore.”

This is what is known in the BoomTown lexicon as a classic What-chu-talkin-bout-Willis? moment.

That’s an especially astonishing number, because MySpace has been steadily losing audience leadership and, more importantly, the growth race to Facebook over the last year (see the Journal graph here).

Nonetheless, MySpace, the unit of News Corp. (NWS) that makes up much of FIM, seems to be making up for it in actually selling the ads needed to make social networking profitable.

And, while Facebook has been beefing up its ad sales force on Madison Avenue–it turns out that it is a media company, after all, and not a utility!–so has MySpace, mostly from ex-employees of Yahoo (YHOO), which still dominates the category, despite its numerous missteps.

Both Facebook and MySpace will, as will everyone in the graphical ad space, get hit hard by the econalypse in the advertising space online, of course.

But, given these stats, Facebook clearly has to start seriously upping its ad performance to at least match MySpace.

(This site, as well as The Wall Street Journal, are also owned by News Corp.)