MySpace lets app developers buy ads to reach users

MySpace is the first social network company to let third party applications pay in order receive prominent placement in front of the site’s users. Sources tell social network blogger Nick O’Neill that they have been pitched between $50,000 and $100,000 by MySpace to appear for one week as a featured application on MySpace’s application gallery. Applications can also buy space on a category application page, so if you have a new music app you could have it be featured on the music app category page.

See the screenshot, above, of widget-maker Slide’s “SuperPoke! Pets” application, featured in the “Animals & Pets” category.

O’Neill thinks this is bad news for application ad networks — and that’s true as far as the pyramid scheme-like “cost per install” model goes, where one application will advertise another application within their own application (got all that?). But as we’ve covered, Social Media, Lookery and other ad networks are also working with brand advertisers and with new targeting practices to to reach social networking users. For many, the CPI model isn’t as relevant as it was last fall. Whether MySpace will compete more broadly against these companies seems to be an open question.

Of course, this slightly hurts any application that can’t afford to be featured, and benefits the better-funded apps that can grow through buying ads. Excerpt of the presentation, below, the rest of it on The Social Times.