News Corp’s social-networking website MySpace failed to hit its revenue target this year as advertisers struggle to judge the commercial value of making on-line friends.

News Corp revealed that its Fox Interactive Media arm, which includes MySpace, will miss its goal of an 80 per cent increase in revenue by “about 10 per cent”. The division had been predicted to generate up to $1 billion.

News Corp’s chief operating officer, Peter Chernin, said earlier growth projections had been “very aggressive” and that the group remained satisfied: “Despite the obstacles we’re facing, what we’re accomplishing is extraordinary.” Chernin said one of the reasons for the shortfall was the tricky task of evaluating the commercial potential of contacts in cyberspace: “It’s still difficult to quantify the economic value of a friend in the social networking space.” He said advertisers were accustomed to basing their thinking on long-established measures.

In spite of this, News Corp maintains that MySpace is the strongest social networking offering on the net. In the key US market, it boasts 73 million regular users compared to Facebook’s 36 million, each of whom spends an average of 44 per cent more time on the site than Facebook users.

The news didn't deflect News Corp’s global profits as they jumped by $1.8 billion to $2.7 billion, largely due to a gain of $1.7 billion from the transfer of its stake in DirecTV to Liberty Media.

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