News Corp revealed that its Fox Interactive Media arm, which includes MySpace, would fall short of its $1bn revenue target this year by about 10%.
Peter Chernin, News Corp's chief operating officer, said that earlier growth projections had been "very aggressive", but the group remained satisfied: "Despite the obstacles we're facing, what we're accomplishing is extraordinary."
Chernin said that one of the reasons for the shortfall was the problems involved in generating advertising revenue from MySpace's vast online audience. He said: "It's still difficult to quantify the economic value of a friend in the social networking space."
The news is a setback for News Corp's chairman and chief executive, Rupert Murdoch, who has made MySpace the centrepiece of his media empire's digital strategy.
It could also raise questions over the soaring valuations of competitors such as Facebook.
News Corp added that it was no longer in active negotiations about a possible divestment of MySpace, in the same week that Microsoft said it was abandoning its pursuit of Yahoo!
It was reported that News Corp had held talks with Microsoft and Yahoo! about alternative deals that would have seen the media group plug its social networking website into a larger internet company.
The figures emerged as News Corp's global profits jumped by $1.8bn to $2.7bn, largely due to a gain of $1.7bn from the transfer of its stake in to Liberty Media.
The results included a $21m profit from newly-acquired Dow Jones, which includes the Wall Street Journal.
In the UK, earnings grew in double-digit terms at News Corp's stable of newspapers -- the Sun, the News of the World, the Times and the Sunday Times -- partly because of the decommissioning of older printing presses as the papers move to new colour facilities.
During the quarter, advertising and circulation revenues were in line with the prior year.