Online economics
Category Archives: Advertising

Google joins the SOS party

So now Google is jumping on the Social Operating System (SOS) bandwagon with Google Friend Connect.

One way this will work is sites like mine, for example, will be able to add a widget so that site visitors can “friend” the site itself (like a fanclub), and can also access their own social networking friends in some way (perhaps to recommend the site), without having to go back to the parent Facebook/MySpace/Orkut website. For a website like mine, this should be very useful — I’d love to know who my readers are. A 26econ Facebook group would do basically the same thing, but I doubt that many people would bother to go to Facebook and join it. A widget-based version directly on a third-party website would be much more convenient for users.

From Google’s point of view, supporting social features on third-party sites should help with targeted advertising. Currently their Adsense ads are targeted towards the site’s content. Having a network of site-specific friends would allow Google to use both site and user characteristics to target ads, which should be more effective. For Facebook and MySpace, generating revenues is more problematic, because they are geared towards selling advertising on their own sites. The most logical thing for them to do is to build their own advertising networks for third-party sites to compete with Adsense.

The other interesting thing is that this adds an additional ’side’ to social networks. The formerly two-sided platforms (users; advertisers) just became three-sided (users; websites; advertisers). Previously, the basic metric for a social network’s success was pretty much the number of users that it had. Now the number of websites counts as well. It’ll be interesting to see how the SOSs compete in these two dimensions.

by aaron. Permalink. Comments (0). Comments RSS.

Google the corporate borg

From Felix Salmon, upon getting a dull email from Google’s customer support:

I guess it’s inevitable that when a company grows to be as big as Google now is, it will revert to this kind of overlawyered corporate-speak. Is that evil? Maybe not, but it’s a step in the wrong direction.

I agree. Their customer support is the weakest part of their business, in my experience. Today I got an email telling me that I must accept some new terms and conditions for Adsense. They concluded with this:

Unfortunately, we’re not able to further interpret the meaning of the Terms and Conditions for you. If you have additional questions, you may wish to contact an attorney.

Contact an attorney? Come on … Adsense is aimed at small websites who don’t have the budget for that sort of thing. Google can surely do better.

by aaron. Permalink. Comments (0). Comments RSS.

The mysteries of spam

Having just deleted a ton of spam emails, I wondered why are they always about body part enlargements, other sexual performance enhancers and financial scams? Why don’t people try to sell normal less dubious products or services this way?

I think this says something about the economics of spam and the type of people who respond to spam, but I’m not quite sure what.

Costs of waiting

I just spent a considerable amount of time on hold on the phone to a major airline. The usual hold music was interrupted every 20 seconds or so by a voice announcing various special offers etc. This is extremely annoying as every time the voice came on I had to pay attention to make sure that it wasn’t actually someone finally answering my call. With just music, I can keep working or doing something else while holding. Voice ads during holding significantly increase the opportunity cost of holding. Please think about the costs you are imposing on your customers …

Google is an advertising agency that happens to do search

From Bits:

This year Morgan Stanley estimates Google’s total advertising revenue will be $21.9 billion. Excluding the payments it makes to companies that display its ads, Google’s total ad revenue will be $15.7 billion.

Time Warner, the largest media company in the world, earned $8.8 billion in advertising revenue last year. Viacom had $4.7 billion in ad revenue last year. I’m still working through the numbers at the other big conglomerates, but it seems clear that none of them sold more than $16 billion in advertising.

by aaron. Permalink. Comments (0). Comments RSS.
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