Is MySpace’s Shrinking Q4 Revenue a Warning Sign?

In one word: no.

MySpace, owned by News Corp (NWS), is not a startup, it’s a behemoth already and its sales cycles and patterns become quite normal.

Wednesday night when I commented on News Corp.’s recent quarter (and on missing Rupert Murdoch’s $1B target figure), the following slipped my mind. News Corp.’s fiscal year ends in June, so technically, the reduced quarterly revenues are from the Oct-Nov-Dec quarter (what I call Q4) to the Jan-Feb-Mar (what I call Q1) quarter.

99% of the time, most media companies see their strongest quarter in Q4, for a few reasons:

• In Q4, ad agencies scramble to spend all of the money marketers want to spend so they can earn their agency commission.
• In Q1, ad agencies are talking to their clients trying to fine-tune and finalize ad spends… so money always start to be spent in February and grow afterwards.

So if and only if we see a continued decline in Apr-May-Jun is it a sign of concern, otherwise, it’s business as usual… and while yes, it’s very hard to monetize social networking sites, News Corp.’s did clock in $900M and that is a very impressive sign nonetheless.

Disclaimer: News Corp was my former employer; WatchMojo.com is distributed via MySpace TV.