Michael Dolan, chief financial officer at Viacom, said today at The Deal's Convergence 2.0 conference that massively multiplayer online gaming companies are easier to monetize than social networking companies such as MySpace and Facebook. He added that many of the social characteristics of MMOGs such as IMing are similar to the characteristics of traditional social networking sites.

Dolan said that Viacom's top ad sales exec told him during deal due diligence that there would be a bottomless demand for advertising on the company's recently acquired MMOG site, Xfire. However, when he asked him about the prospective advertising demand for MySpace, the top ad sales exec told Dolan, "I'm not sure who I would call." Dolan said that left him with a chill

It should also leave all the venture capitalists pouring millions into social networking companies with a chill as well. If more traditional media companies adopt Dolan's viewpoint, exit prices will decline as fewer buyers bid for their social networking startups.

For more on Convergence 2.0, see:
Convergence 2.0 conference web site
Tech Confidential blog
Tech Effect blog

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