So great is the hype surrounding MySpace that people are starting to hallucinate, seeing operating income where there are only registered users and page views. This is from a Motley Fool article on News Corp’s recent earnings release, which I cited in a previous post:

It bears noting that MySpace is only a small part of the News Corp. empire, yet the company’s television, movie, and other media properties aren’t doing too shabbily, either. The other sectors may not have the sex appeal of MySpace, but they are generating gobs of cash — more than $2 billion so far this year — and that inflow is no doubt funding numerous initiatives that aim to meld the content platforms together.

This is from a summary of the Motley Fool article that appeared in a Media Post email newsletter:

To be sure, MySpace is still a tiny part of News Corp, though it represents most of the company’s opportunity for growth: it’s already generated $2 billion in cash this financial year, about four times what News Corp paid for it nearly a year ago [bold is mine]; it also averaged 30 billion page views in April, placing it second among all Web sites, according to Nielsen/NetRatings.

Now here’s News Corp’s consolidated income statement:

And here’s the only mention of MySpace in News Corp’s earnings release:
“

This quarter also saw accelerated progress in our new media evolution. MySpace expanded to over 70 million registered users, solidifying its prominence as one of the fastest growing sites on the Internet.

Note to MediaPost: OOPS! It’s actually the OLD MEDIA businesses thatare kicking off all that cash, NOT MySpace. And all News Corp currently has to show for its MySpace bet is users and page views, NOT operating income.

I wouldn’t normal go out of my way to embarrass a group like MediaPost, because I like their stuff, but this is so representative of the hype in the market. The way people talk about MySpace you’d think that it’s ALREADY generating $2 billion in operating income.

But it’s NOT. And the truth is that they have NOT figured it how to do it yet — which doesn’t mean they won’t. If they do, more power to them.

In the meantime, let’s be careful not to drink too much of that spiked Kool-Aid, lest we start to party like it’s 1999 again and see profits where there are only “eyeballs.”