MySpace Implications for the Consumer Technology Industry

A few weeks back, THQ was visited by sales reps for the Fox Interactive Media properties. The primary focus of the presentation was how MySpace plans to leverage its audience for consumer product companies. Essentially MySpace is moving towards being able to create detailed segments of their audience. It is mining every piece of content on an individual's MySpace page to categorize him or her for companies like THQ. Now, this kind of segmentation is happening throughout the internet, not just on MySpace. I am sure Facebook is doing the exact same thing.
At first glance, that kind of segmentation sounds awesome for consumer product companies, but, upon further thought, it also poses some grave consequences. The obvious benefit of this segmentation is that companies will be able to reach highly targeted groups of individuals. As a example, think about a TV ad - it will reach an broad audience of a particular show. The MySpace segmentation would effectively allow a company to send its TV ad to only males, 20-24 yrs old, who drive Honda civics that they have customized. That is very powerful.
On the consequence side, it means that these product companies need to know their customer. You can probably see I am building on the theme of my last post. You may say that I am over-reacting - "Trevor, video game companies can still just advertise to all males, 18-30 yrs old, video gamers and hit their target market". Maybe so, but don't forget the video game market is shifting with the rise of casual games. More importantly, this new level of data presents opportunity to those companies who learn how to leverage it.
One of the big teachings of an MBA program is how to strategically take advantage of technology by creating business structures that leverage it. The company that figures out how to identify their potential customers at the level of MySpace segmentations for each video game title (or any other product for that matter) will create a competitive advantage over other their competitors. I am not sure many B2C technology companies are ready to do this. If they don't a competitor will and they will be playing catch-up.

The implication of the movement to higher segmentation on social media sites like MySpace and Facebook is that companies need to better understand who are their potential customers.