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Article

Title: Hanging with the in-crowd

Author: Staff Article Type: Product Analysis
Source: The Economist, v380 n8495 p69(2) Publication Date: Sep 16, 2006
  ISSN: 0013-0613
URL of Publication: http://www.economist.com

Large media companies have become increasingly interested in social-networking Web sites. The most popular site, MySpace, was acquired by News Corp. in 2005. Other media groups and investors are flocking to similar social-networking sites. These sites allow users to create their own pages and connect to other people through showing photographs or writing blogs. Even Wal-Mart, the large American retail firm, has started its own social-networking Web site call The Hub. After initial skepticism, investors are now convinced that sites like MySpace can make substantial amounts of money by selling advertising space. In the beginning, advertisers hesitated to put ads on the home pages of individuals, since these pages provided unpredictable content. They have come to realize, however, that they cannot ignore the millions of users that view these pages. In August 2006, MySpace made a deal with Google Inc., the Internet search company, to sell a large amount of advertising space on the MySpace site and on other News Corp. sites over the next three years. As social networking becomes more attractive as a business, the more competition will arise. All the largest Internet companies have launched their own social-networking services, but the most popular sites continue to be the independents. Facebook, which has about nine million registered users, has made a move to take on MySpace. Facebook is based on separate, closed networks at universities and colleges, rather than being completely open as MySpace is.

Companies:
Facebook Inc Google Inc
MySpace Inc News Corp

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