Facebook Does Ad Deal, But Not With Google

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1. Tcruncher2
   

   August 23rd, 2006 at 12:42 am

   Big Deals, Big Money - Microsoft has the cash to handle it and get more exposure in the meantime.

   Note: Noticed the ‘edgeio’ advertising on the side there Mike. You get paid the $10K a month for that one or was it a ‘freebee’

2. Michael Arrington
   

   August 23rd, 2006 at 12:45 am

   nope, they’re paying for that ad.

3. Kessinger
   

   August 23rd, 2006 at 12:48 am

   Nice post!…but interestly I recently noticed the Search2.0 Eurekster is allowing swicki owners that use Google Adsense to upload their Adsense account to their swicki (saw other ad options as well - but Adsense pertinent to this post) which is very interesting as Google doesn’t seem to use CTR yet to rerank their search - but something eurekster does with all thier search feeds from Yahoo, Ask, etc, on blogs like TechCrunch - so would be interesting to test them together…maybe those two click thru rates in verticals may work together? Just a thought.

4. Franck Poisson
   

   August 23rd, 2006 at 1:22 am

   Good analysis…from a former and early Google ad sales insider.

5. Robert Selzer
   

   August 23rd, 2006 at 2:04 am

   As advertiser on Google the information about “the click through rate on individual ads in deciding which go on top” is very helpful.
   Thanks!

6. davak
   

   August 23rd, 2006 at 2:28 am

   We rolled out an advertising campaign on facebook and several other sites. The facebook CTR was several fold lower than anywhere else. Buying ads there is currently a complete waste of money.

   Just fyi.

7. Rishi Khaitan
   

   August 23rd, 2006 at 3:38 am

   If the CTR on social-networking sites like Facebook is as low as many advertisers are claiming, then “the massive number of Facebook pageviews” is not really worth as much as it might seem.

   It seems to me that the reason why Google wanted to lock in the MySpace deal is not simply because of the ad inventory. A big reason is that a huge chunk of the Internet population are on MySpace everyday and when these users enter in a web search on MySpace, Google wants to be the search engine that handles that request. I think that’s where the real ad money is being created. Not on the ads displayed on the pages of MySpace itself but the AdWords ads accompanying the millions of Google searches that are directly originating from users on MySpace.

8. MOose
   

   August 23rd, 2006 at 3:46 am

   Michael:

   I like your suit. You looked all pimpled out.

   http://money.cnn.com/2006/08/2.....ney_latest

9. Danny Sullivan
   

   August 23rd, 2006 at 4:49 am

   > When Google combines their more-effective platform with aggressive revenue sharing and guarantees, there is no room for Yahoo and Microsoft to compete.

   > Until today, that is.

   Not at all. Yaho and Microsoft can and will compete if they decide it makes sense for them to overall. They potentially might even lose money (as Google’s been suggested to do in some deals) if they feel locking out a competitor and other intangibles will pay off.

   But to highlight that “today” is hardly a new era, I’m going to link drop. Feel free to edit as you like, Mike.

   July 2006
   Lycos Powered By Windows Live & Retriever Directory
   http://blog.searchenginewatch......720-074026

   SuperPages Upgrades Maps With Microsoft
   http://blog.searchenginewatch......711-174442

   May 2006
   More On Amazon Dumping Google [For MSN] & Missing Paid Listings
   http://blog.searchenginewatch......502-101548

   March 2006
   Moneyextra.com Partners With MSN Search
   http://blog.searchenginewatch......321-092851

   Nov. 2005
   MSN Powers UK’s Times Online; Ask UK Scales Back Ads
   http://blog.searchenginewatch......121-141547

   So why’d did MySpace go with Google? Maybe the rev deal was better. Or maybe MySpace figured Google was the most money from the least threatening partner (MSN and Yahoo have huge member bases and big social networking plans compared to Google’s poorly performing Orkut).

   And why did Facebook go with Microsoft? Maybe the financial deal was super sweet, or maybe there are other intangibles that factor in as well.

10. Drew Olanoff
    

    August 23rd, 2006 at 4:50 am

    Not surprised by this at all. Google would love to be “The” social network snapon, but when you’re trying to stand out of the crowd, you can’t do what everyone else does.

    Don’t like microsoft’s offerings personally, but good move on Facebook’s part.

11. Andrew
    

    August 23rd, 2006 at 5:19 am

    Both Facebook and MySpace should be sharing the ad revenue with the users; they are the reason they are generating it in the first place.

12. Rickt
    

    August 23rd, 2006 at 5:25 am

    Do your homework…you are assuming MSFT paid more for the deal because they have more cash and are willing to fund a loss…that logic would have meant they would have paid for the mySpace deal…perhaps there is a different way of monetizing the pages than just text links that provided Microsoft an edge in this deal…do your homework.

13. Franck
    

    August 23rd, 2006 at 5:40 am

    Andrew..come on..are you serious? while you may be right in the fact that members are clicking hundred of times per month ( 785.47/month/users on Facebook ) , you have to acknowledge that those websites are offering a free service..I mean..they spent some time programming it and they are paying people to do so..These 7 millions kids are having fun surfing the website …all this because of programmers..
    I have a question for you : Do you believe that your insurance company or even your car dealership could share their revenue with you?

14. SanSum
    

    August 23rd, 2006 at 5:47 am

    Anybody thinking about advertising during the usual task of e-commerce
    like search , find and obtain.

15. Sebastian
    

    August 23rd, 2006 at 5:56 am

    Congrats for the Business 2.0 article Michael!

16. SanSum
    

    August 23rd, 2006 at 6:08 am

    Congratulations on the Business 2.0 article Michael. Do you think search engine advertisement is only to remain as keyword relevancy focused or it can be more focused into verticals and categories.

17. SanSum
    

    August 23rd, 2006 at 6:15 am

    I agree with Franck, we should not expect platforms to share revenue and all, but we might see in the future that content generated by user will get
    revenue far more than the site it is hosting, just like top actors and actresses demand their own fees based on their brand image and recent
    blockbuster hits. Then those branded user content can be moved from one hosting site to another hosting site on the user’s terms.

    But generic social-networking is all because of the platform, so the ad revenues on that activity should and will remain with the platform.

18. Larry
    

    August 23rd, 2006 at 6:32 am

    Wow! More Google hating! “OMG someone didn’t ink a deal with Google!!”

19. Narendra
    

    August 23rd, 2006 at 7:07 am

    Mike,

    On community sites the difference between the ad serving/matching technologies is irrelevant. Again, the MySpace deal has *minimums* which simply means that Google employs a valid (albeit 1999ish) strategy of promising big money but being forced to renegotiate one or two months in because the metrics don’t pan out. Report on that renegotiation and you get major props.

    This has been going on for several years now. MSN may have done some slight deal sweetening, but there were lessons learned during the bubble–unnatural acts don’t pan out. You can pretend like they will (for hype) but there safeguards against it and even a general unwillingness to waste cycles and resources (in the case of Yahoo).

20. Ricardo Tohmé
    

    August 23rd, 2006 at 7:09 am

    Come on… I like Mike, but this is just pure arrogance…

    http://www.valleywag.com/asset.....s-dead.jpg

21. Ron Wilson
    

    August 23rd, 2006 at 7:33 am

    Good to see Facebook is doing business with MSN. This will give MSN some credibility in the space.

22. Becca
    

    August 23rd, 2006 at 8:51 am

    Well if Google has already gotten a hold of Myspace, I don’t blame Microsoft for trying to take Facebook. Poor Microsoft is fighting hard to stay in the race.

23. Andrew
    

    August 23rd, 2006 at 9:45 am

    Of course I’m serious Franck . In order to sustain a UGM community you will have to give back more then programming. You have to give incentive outside of the ability to create a network of friends. You have to give back to the community larger then the way business currently understands revenue sharing.

24. Mike K
    

    August 23rd, 2006 at 10:04 am

    Paying users wouldn’t make sense - first of all, would there be tiered rewards for different levels of users? If that happens, then all of a sudden casual users feel like their contribution isn’t valued. Also, once you are paying your contributors, you’ve monetized their involvement and in a way “poisoned” their participation. Perhaps non-monetary rewards for users - whatever that may look like - would make a bit more sense, but I don’t think the people holding out on joining Facebook are doing so because they’re expecting a reward.

25. Lance Weatherby
    

    August 23rd, 2006 at 11:05 am

    From a users perspective Google no longer has a superior search product. The game is a bit about entrenched usage habits and distribution.

    Microsoft still has the same ability to buy lots of distribution that it had in 1997 when it launched IE. They are going to push Google to give away their core product in order to be competitive, just as Google is working on ways to provide Microsoft’s bread and butter for free.

26. Jeff
    

    August 23rd, 2006 at 11:17 am

    An excellent example of where the company has paid its users is netscapes new ‘digg’ like service. They are paying good contributors a $1000 per month to continue submitting content. I know for one this made me feel like I wasn’t needed in the community and stopped posting content. They seem scared to loss users so paying on a fraction of them was their best choice? I believe if Facebook and Myspace began rewarding its users with cash we would see the down-fall of these services. Instead they have been offering free content since the beginning. (ie: iTunes downloads, free music, concert tickets etc…)

27. Michael Arrington
    

    August 23rd, 2006 at 12:41 pm

    Danny, not sure if you are still on this thread. If you are, do you agree with the core statement that average CPC on Google is significantly higher than Yahoo or MS at this time? If you agree with that statement, then the rest of my argument is valid, IMO.

28. Andrew
    

    August 24th, 2006 at 4:42 pm

    I’m dead on. Netscape’s business model is not a goos example ‘Jeff.’ The new Netscape are “posers” trying to impose a fasle reality of payment onto grow a system of duplication.

29. Andrew
    

    August 24th, 2006 at 4:43 pm

    I’m dead on. Netscape’s business model is not a goos example ‘Jeff.’ The new Netscape are “posers” trying to impose a false reality of payment onto grow a system of duplication.

30. unblock myspace
    

    August 24th, 2006 at 11:37 pm

    what difference it makes to simple people …. we dont care google gets it or msn or even yahoo …. ? to me all this thing is high profile business about which every day user donot even care ….