September 28, 2006, 12:00 AM

The growing retail presence of is emerging as a major driver of traffic to retail web sites as well as joining the ranks of e-retailers. It accounted for 2.5% of "upstream visits" to shopping sites for the week ended Aug. 26, up from 1.28% six months earlier. It`s also building a presence as an online store for digital music.

Anyone trying to pigeonhole as an online gathering place for young people who want to stay in touch with the latest trends and happenings may be in for a surprise. The social networking site is becoming increasingly visible in web retailing, both as a driver of traffic to online shopping sites and as a web retailer itself.

MySpace accounted for 2.53% of “upstream visits” to shopping sites in the U.S. for the week ending Aug. 26, nearly double the percentage (1.28%) that MySpace drove six months earlier, web site traffic analysts Hitwise says.

During the same period, Google was responsible for 14.93% of all upstream visits to shopping sites, Yahoo for 4.69% and MSN for 2.33%, Hitwise says.

Upstream visits occur when a consumer performs an activity at one site that leads to a visit to another site, such as searching at Google or Yahoo or reading a MySpace user’s profile that mentions a site or a product.

“Search is a proven method of acquiring traffic and Google is the leader in driving online retail site traffic,” says Bill Tancer, general manager of global research at Hitwise. “With the growth of MySpace and others, online retailers should expand their focus beyond search to consider social networking sites as a source of additional traffic.”

And MySpace’s role in online retail is no longer limited to being just a generator of traffic to online shopping sites. Under a new arrangement with SNOCAP, a digital music services provider and licensing company, MySpace will offer independent musicians the chance to build online storefronts and sell their music to the community.

The SNOCAP services will enable artists and labels with registered content to set pricing, create stores and sell their music in an MP3 format. “MySpace has become one of the largest promotional tools for artists and labels to distribute their music to fans,” says MySpace CEO Chris DeWolfe. “By introducing a powerful commercial tool set into the industry, we expect to see artists translate their community reach into sales, ultimately allowing more bands to make a living and connect with fans.”

MySpace and SNOCAP, will collect an undisclosed percentage of each transaction.

MySpace, which has more than 90 million member profiles, also sees the digital music business as a means to evaluate other web retailing opportunities. “We are talking about web retailing and e-commerce all the time and it is definitely on the horizon,” a spokeswoman says.

The MySpace digital music store, now in the pilot phase, is expected to roll out by the end of the year.


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