04.19.08
Can Google Find The Money In Social Networks?
If Google Can’t Who Can?
That’s the question being asked lately referring to Google’s attempts at monetizing social networks.
Google has a deal with MySpace through the 2nd quarter of 2010 worth $900 million to place advertising throughout the network on over 100 million users pages. It’s a revenue sharing agreement made with the giant social network that is supposed to tap into the behaviors of MySpace users.
So far, Google is losing the battle. It has cost them 1.5% off their gross profit margins and that is totally unacceptable to Google according to estimates from Bernstein Research analyst Jeffrey Lindsay.
No one has been able to crack into the social networks advertising nut, primarily because social networks don’t work off of searches and intent, they work on actions.
Users in social network communities search for like minded individuals and groups, not specific content, as in traditional search methods all of which Google is famous for. But, one advertising specialist says he knows how to monetize the networks and claims Google is doing it wrong.
Andy Monfried thinks he can help publishers do it. Monfried, a former Advertising.com executive and current CEO and founder of Lotame, says he’s discovered the secret sauce for monetizing social networks…
“You can’t put up contextual ads against user-generated content,” Monfried says. “It’s irrelevant, and advertisers don’t want to risk their brands on user-generated content.”
In essence, expect to see more attempts at ads popping up in social networks. Primarily because they mean money for the owners of such networks and everyone needs to earn a living. Or maybe Google will just go ahead and purchase Yahoo, call it Yahoogle and tap into some of the social networks Yahoo owns — like Flickr.
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Posted by Teasa’s Tips
