Recently, because of the press Google, Yahoo, and Microsoft has received, the three companies have been all over the news. The latest article that I have found regarding Google is about their effort to advertise on MySpace pages. The partnership that Google has with MySpace could have been a good move by Google, but the strategies they are employing to advertise on MySpace pages have been nothing if not disastrous. It was said in an understated way by co-founder Sergey Brin that they have not found the “best way to advertise and monetize the social networks yet.” The statement was followed by the fact that Google lost about 1.5 percent of it’s gross margins because the advertising strategies simply aren’t working. 1.5 percent of Google’s gross margin is 900 million dollars, by the way, not a small amount of money to lose.
The reasoning behind why the advertising was not working was explained by Andy Monfried, a fromer Advertising.com executive. He claims that he has figured out a way to be successful when advertising on social networking sites, and why Google’s ideas are not very effective. He says that because people go on sites like Facebook and MySpace to communicate with friends, advertisements based on the data they include in their profiles will not encourage users to go buy products. He suggests that advertising should be based on the demographic of the user and the content that he or she views and downloads. Because Monfried did not want to disclose specific strategies that he employs in advertising, it was not explained very thoroughly but the article was interesting nonetheless.
http://blog.wired.com/business/
