MySpace driving more retail traffic than MSN search

New Hitwise findings indicate that MySpace sent more US traffic to online retail sites last week than MSN search, the third largest search engine on the web. That’s big news, as it’s tangible evidence that youth oriented online social networking is a market driver of serious proportions.

The Hitwise report puts Yahoo! as the source of 4.69 percent of traffic to online retail sites, MySpace as 2.53 percent and MSN search at 2.33 percent for the week ending August 26th. Google leads the pack at 14.93 percent.

Search related advertising last year was a $5 billion market, still small compared to $22 billion in magazines and $74 billion for TV advertising - but the landscape is changing. The Financial Times ran an article on Tuesday about the belief that the shortage of marketers skilled in negotiating sites like MySpace and YouTube is one of the biggest barriers to the growth of advertising online.

Even in the short term, it’s still up in the air between the big players. Google’s advertising, which is generally believed to be more effective than that of competitors, hasn’t kicked in at MySpace yet. If Google can make MySpace search more bearable when it takes over in the fourth quarter of this year, then you can expect MySpace to drive more traffic to retail sites than ever. At the same time, IE 6 doesn’t have a native search box in the chrome of the browser and IE 7 will - to search either MSN or Live.com. We’ll have to compare these numbers with Live.com in the future.

Perhaps more important to our readers, the numbers go some distance towards proving that young people using social networking sites are interested in shopping through links on those sites. In fact, they’re more of a force to reckon with than MSN searchers apparently. And social networking sites can profit from on site advertising just like search engines can. All those startup social networking sites hoping to monetize their traffic with AdSense? Maybe it’s more realistic than we thought. There certainly are a lot of contenders launching - we haven’t posted the MySpace logo here in more than a month.

If any number of these new sites survive, if perhaps a large number of MySpace users grow dissatisfied with the Fox influence, then the financial impact of that traffic will of course be diffused - but there are a lot of startups out there who would be interested in getting slices of a pie larger than the MSN search ad pie. They’ll be able to command a far smaller cut of the revenue, but the news that the market leader in the social networking space is demonstrating its impact on online retail will make a nice feather in the cap of all the little aspiring networks coming online.