Today MySpace, tomorrow Facebook?
Screenshot of Facebook website
TEXT OF STORY
Tess Vigeland: The battle of the social networking sites is heating up. Rupert Murdoch recently complained to the Wall Street Journal — which, by the way, he's trying to buy — that Internet users are flocking not to News Corp's MySpace but to rival Facebook. So is Facebook the next big buyout target? Here's Marketplace's Amy Scott:
Amy Scott: Facebook says it's snapped up three million new users since it launched new features last month.
It started as a virtual place for college students to flirt. Now it offers music sharing, horoscopes even the numbers game Sodoku.
Analyst Jennifer Simpson with the Yankee Group says MySpace is still on top. In April it claimed almost 80 percent of social networking traffic. But Simpson says as Facebook adds more applications, users are connecting with the site in a new way.
Jennifer Simpson: The users come back not necessarily to see what their friends are doing, which is why you would previously go to Facebook. Now people are going back just for the sake of seeing what's happening with their application.
Simpson says the buzz may attract buyers — Facebook rejected a billion-dollar offer from Yahoo last year — but she says the company isn't all that profitable. It's been slower to embrace advertising than MySpace. And she questions whether Facebook can turn buzz into profit.
In New York, I'm Amy Scott for Marketplace.