As Myspace enters advance talks with an investor group, here’s a look at the social network’s advertising revenues.

eMarketer estimates that ad spending on Myspace was $288 million in 2010, down 17% from our August 2010 estimate of $347 million. 2011 and 2012 will be even more diminished, with ad spending estimated at just $184 million this year and $156 million next year.

Here are some of the top stories in which eMarketer data and analysis were featured this week:

3/31: The Wall Street Journal: Search for High-Growth Media Leads to Google

It may be time for investors to take a blind taste test.

Consider two stocks. One derives 96% of its revenue from advertising, the other 65%. The first nearly doubled revenue since 2007 and is expected to increase the top line 24% this year. The second’s revenue has been flat over that period and is expected to rise 3% in 2011. Read more.

3/30: CNBC.com: TV Ads Rule Thanks to Social Media: Internet Ads Promising

The 30 second spot is anything but dead – in fact advertisers are spending more than ever on ads on broadcast and cable TV. And TV ads are expected to grow even more this year, to 39.1 percent of all ad spending, around $60.5 billion, according to eMarketer. The other fast-growing ad area is online, which has managed to steal from newspapers, magazines and radio, though not TV. Read more.

3/29: Bloomberg Businessweek: Twitter Chairman Dorsey Sees ‘More Approachable’ Service

Twitter Inc. co-founder Jack Dorsey will become executive chairman and head of product development as the company aims to narrow Facebook Inc.’s lead in online advertising and get users to be more active on its site. Read more.

3/29: Ad Age: Among Media, TV Is Still on Top

The internet is consuming ever more of our waking moments, not to mention ever more ad spending, but that doesn’t mean that traditional media is the loser. At least not when “traditional media” means TV. Read more.

3/29: CNNMoney.com: How Amazon beat Google and Apple to the music cloud

Amazon on Tuesday launched the Amazon Cloud Drive, an Internet service that lets customers store music and other digital files on the company’s servers and access them on computers, smartphones and other devices. Read more.

3/28: The Wall Street Journal: Advertisers Wary of Myspace

With its traffic plummeting and its future uncertain, social-media and entertainment site Myspace is having an increasingly hard time drawing advertisers, especially for long-term deals. Read more.

3/27: The New York Times: Digital Strategy Paying Off for Publicis

When Microsoft this month awarded a big chunk of its North American advertising account to Publicis Groupe, the Paris-based marketing company, the news felt like vindication for the chief executive of Publicis, Maurice Lévy. Read more.

For more of eMarketer’s recent news coverage, click here.

I understand why entertainment giant Disney bought social game developer Playdom. I also understand that sometimes it’s better to buy than build, and this is probably one of those times for Disney. Disney president and CEO Robert Iger stated it clearly when he told BusinessWeek: “You don’t get the kind of growth we want by building from the inside.”

What I’m wondering is whether Playdom was worth the $563 million price tag that Disney plunked down — which will swell to $762 million if Playdom meets predetermined performance benchmarks.

Now, you might say that a few hundred million is a drop in the bucket for Disney. After all, this is a company that had $36 billion in revenues and almost $6 billion in profits in FY 2009. And Disney paid $8.1 billion for Pixar in 2006 and $4.2 billion for Marvel last year, so nosebleed acquisitions are nothing new for Mickey’s team.

Perhaps more to the point, Disney just unloaded Miramax for $660 million, so you could say it “swapped” an aging art-house film unit for an up-and-coming social game developer. Disney made a handsome profit on Miramax, which it bought for $80 million in 1993.

But the fact that Disney can afford this hefty price for Playdom doesn’t mean it makes good fiscal sense. Electronic Arts snapped up Playfish for a comparatively reasonable $275 last year — and Playfish is bigger than Playdom.

Disney is gambling on Playdom’s ability to outmatch its competition, which includes Playfish and the grandaddy of social game makers, Zynga. But Disney is also betting that social gaming won’t die off as a passing fad, and that Facebook and other social venues will continue to support these games. (If it weren’t for Facebook’s massive scale, Zynga would not be anywhere near where it is today). These are some pretty aggressive gambles.

The price tag of this deal reminds me of other notorious acquisitions of the past decade, some of which crippled their buyers: Time Warner/AOL, AOL/Bebo, News Corp./MySpace.

The latter deal didn’t seem so overblown while MySpace was riding the crest of a popularity wave during its acquisition in 2005. Of course, that was before Facebook blew it out of the water, both in user growth and advertising sales. Facebook is expected to top at least $600 million (though recent estimates put the number closer to a billion) in advertising revenue this year, while ad revenue to MySpace is expected to decline 21% to $385 million, according to eMarketer estimates. At this point, MySpace seems like an albatross for News Corp., which on multiple occasions has had to fend off rumors of a fire sale for the flagging unit.

This underscores the risks of paying top-dollar for flavor-of-the-moment properties. It’s all fine and good if those properties can retain their cool and appreciate over time. But very few do. Remember Bebo? It pioneered many of the same concepts that made Facebook successful today, and look where it ended up.

Or take Disney’s own purchase of Club Penguin for $350 million in 2007. The kids-oriented virtual world failed to meet performance benchmarks that would have sweetened the deal, and traffic to the site has been declining. Barring a stunning turnaround, it’s not looking like Club Penguin will go down in history as one of Disney’s corporate coups. Given the steep price Disney is paying, we may be saying the same thing about Playdom—another company who makes its money selling virtual goods—a few years from now.

Image courtesy of Facebook.

There were three big news stories last week in the social network business: AOL sold Bebo for a reported $10 million to an investment group; MySpace co-president Jason Hirschhorn left the company to return to New York; and Reuters reported that Facebook generated revenue of $700 million to $800 million in 2009—a higher figure than had previously been estimated.

The timing of the Facebook news—appearing in the same week that two of its competitors had negative news—surely wasn’t an accident. I’ve been hearing whispers about Facebook’s strong ad sales performance, particularly its self-serve product, in the past few months. I think this slightly more public statement about its revenues (which was attributed to “two sources familiar with the situation”) is a sign that Facebook is getting closer to filing for an initial public offering.

It also means that Facebook is asserting itself not only as a social-networking giant but also as a real rival to Google, Yahoo! and Microsoft. In May, Facebook was the number 4 property on the Web, according to comScore. It reached 130.3 million unique visitors in the US, trailing only Microsoft (160.1 million), Yahoo! (167.2 million) and Google (179.2 million).

In December 2009, I projected total social network ad spending would reach $1.3 billion in the US this year, up 7.1% over 2009. I am starting work on a revision to that forecast, and Facebook’s strong performance will be a key component.

Thus far, Facebook has significantly trailed its portal rivals in ad revenue. My eMarketer colleague David Hallerman forecasts that Google will have net US advertising revenues of $9.55 billion this year, Yahoo! will garner $3 billion in the US and Microsoft will net $1.2 billion. The figures all exclude traffic acquisition costs, or fees paid to partners to send traffic back to the portals.

Back in December I predicted marketers would spend $450 million on Facebook advertising in the US and $155 million outside the US, for a total of $605 million worldwide.

Since last December, it has become apparent that Facebook’s self-serve ad product has performed much better than I expected. USA Today reported last week that self-serve ads brought in $300 to $400 million in revenue in 2009. The self-serve system allows advertisers to create small ads that appear on the right-hand side of Facebook pages and then target the ads to segments of the Facebook audience. Facebook’s other revenue streams are branded ads (sold by its in-house sales team), virtual gifts and virtual currency. The latter is only now starting to be rolled out.

Media reports have estimated Facebook’s total revenue at anywhere between $1 billion and $2 billion this year. In an interview with Inside Facebook this week, Facebook CEO Mark Zuckerberg said “the [revenue] estimates are not so far off in either direction that it’s causing us any pain.” Facebook currently derives the majority of its revenue from advertising, but some reports have said that virtual currency could bring in significant new funds. The terms of Facebook Credits mean that it gets a 30% cut of any transactions done using Credits.

I’m several weeks away from publishing our own revised social network ad spending forecast, but I believe this will be the year that Facebook will start to close the revenue gap between it and its larger competitors. It has already passed AOL in US traffic, according to comScore, and it is not out of the realm of possibility that it could pass AOL’s $890 million in net US advertising revenue.

Image courtesy of Facebook.

The Pew Internet and American Life Project released their latest study about Twitter this afternoon, and there’s some interesting stuff there. We’ll be back later with more on this, but for now, a teaser:

Some 19% of internet users now say they use Twitter or another service to share updates about themselves, or to see updates about others. This represents a significant increase over previous surveys in December 2008 and April 2009, when 11% of internet users said they use a status-update service.

Three groups of internet users are mainly responsible for driving the growth of this activity: social network website users, those who connect to the internet via mobile devices, and younger internet users – those under age 44.

In addition, the more devices someone owns, the more likely they are to use Twitter or another service to update their status. Fully 39% of internet users with four or more internet-connected devices (such as a laptop, cell phone, game console, or Kindle) use Twitter, compared to 28% of internet users with three devices, 19% of internet users with two devices, and 10% of internet users with one device.

The median age of a Twitter user is 31, which has remained stable over the past year. The median age for MySpace is now 26, down from 27 in May 2008, and the median age for LinkedIn is now 39, down from 40. Facebook, however, is graying a bit: the median age for this social network site is now 33, up from 26 in May 2008.

Read the whole thing here