I have tested your code, It works fine... I have modified some portion. See this :-
<form id="form1" runat="server">
<div style="font-family: 'Arial Narrow'; color: #FF0000; background-color: #FFFF00">My new web site
<asp:Menu ID="Menu1" runat="server" Orientation="Horizontal" StaticSubMenuIndent="10px">
<Items>
<asp:MenuItem Text="Menu1" Value="Menu1"></asp:MenuItem>
<asp:MenuItem Text="Menu2" Value="Menu2"></asp:MenuItem>
<asp:MenuItem Text="Menu3" Value="Menu3">
<asp:MenuItem Text="SubMenu3-1" Value="SubMenu3-1"></asp:MenuItem>
<asp:MenuItem Text="SubMenu3-2" Value="SubMenu3-2"></asp:MenuItem>
</asp:MenuItem>
</Items>
</asp:Menu>
<asp:ContentPlaceHolder id="ContentPlaceHolder1" runat="server" />
</div>
</form>