In a recent post entitled, What do Abercrombie, The Gap, YouTube, and MySpace all Have in Common?, I pointed out the current trend of online companies such as MySpace, YouTube, Facebook, Digg, and Twitter in using their customers to build and promote their brands for them. I compared this trend to how the designer clothing companies have been marketing their clothing lines for years.
In response to this post I received some emails with questions on how internet companies stack up against the clothing companies in regards to revenue. In general the question has been, “Sure they are getting millions of visitors a day, but are they making any money?”
Many have been skeptical of the ability of internet based companies such as MySpace, which receives a majority of it’s revenues from ads, to generate profits. Yesterday, Pali Research analyst Richard Greenfield answered that question for us. Greenfield states that MySpace is now generating in excess of $30 million a month in revenue. He also estimates that in 12 months that monthly revenue will double. Compare that number to Abercrombie’s reported $300 million in monthly revenues last year. The Gap reported a stifling $1113 million in monthly revenues. YouTube barely makes the chart with their reported approximate 1.25 million dollars in monthly revenue for 2006. So to answer the question, yes internet companies are capable of generating revenue, but still come out well below the popular clothing lines. 
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