MySpace to cash in on profiles

The website started the first phase of its "interest targeting" experiment in July, culling likes and dislikes from its users' pages to sell ads in 10 broad categories such as finance, autos, fashion and music.

MySpace advertisers can now get much more than the basic demographic data contained in site registration forms, Peter Levinsohn, who heads Fox Interactive Media, told an investor conference.

The site has more than 3 million users in each category and can place ads based on responses to questions about users' likes and dislikes, favourite movies and music. Data is even extracted from blog entries, where users write at length about their lives.

Targeting ads can be lucrative for MySpace and its corporate parent, but it can also backfire if users believe their personal expressions are being misused.

When MySpace rival Facebook last year introduced a feature that allows users to more easily track changes their friends make to profiles, many users denounced it as stalking and threatened protests and boycotts. Facebook had to quickly apologise and agree to let users turn off the feature so that others cannot easily see what they do.

Young people don't have privacy

Levinsohn said MySpace would only use information users have freely expressed on their pages.

MySpace should inform users it is using their profile information to sell more targeted ads, Beth Givens, director of the Privacy Rights Clearinghouse, a California-based nonprofit, said.

"Many young people don't seem to have privacy protection instincts," Givens said.

Levinsohn used the example of a user named "Jill" who identifies herself as a fashionista and wrote in her blog about the new fashion line-up.

"She even goes so far as telling us she needs new boots for the fall," Levinsohn said. "How would you like to be an advertiser selling boots to her?"

Broaden categories

Next, MySpace plans to broaden its categories so it can market ads for a movie such as "Fantastic Four," for instance, to people who said they have an interest in comics, action films and even the film's star, Jessica Alba.

"This is really just the beginning for us," he said. "No one else in the marketplace can offer this kind of concentrated reach."

At a conference in New York, News Corp CEO Rupert Murdoch remarked on the importance of creating categories for advertisers to buy on MySpace and vowed "to build it better than anybody."

Sales of targeted ads could help websites earn more per ad sold. Earlier this year, Yahoo launched SmartAds, a platform for delivering customised display ads, while Time Warner's AOL bought the behavioural-targeting company Tacoda.

The research company eMarketer projects that spending on behavioural targeting will nearly double to $1bn next year and hit $3.8bn by 2011.

- AP