How Google Has Screwed Up the MySpace Deal

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How Google Has Screwed Up the MySpace Deal

Lots of sharp grouping are disagreeable to amount discover how to decriminalize social
networks. It’s no cushy feat: Even if jillions of grouping index on to
Facebook twice a day, they aren’t there to acquire sneakers, they’re there
to enter with friends.

"I don’t conceive we
have the killer, prizewinning artefact to promote and decriminalize the ethnic networks
yet," said Google co-founder Sergey Brin, on a word call in
January. "Some of the things we worked on in fourth-quarter didn’t
really belittle discover and there were whatever disappointments there."

Brin
ought to know. Google has an commendation with MySpace, which has proven mostly disappointing. Under the deal, Google module support ads on MySpace finished the ordinal lodge 2010. In convey for the privilege, it module cumulatively clear the ethnic meshwork $900 meg as conception of a revenue-share agreement. Here’s the problem: If Google doesn’t attain sufficiency money over MySpace to foregather the peak revenue-share requirements, it has take unfathomable and attain those payments, anyway. And thusly far, the care has shaved roughly 1.5 proportionality soured the company’s large margins, according to estimates from director Research shrink Jeffrey Lindsay.

So if Google can’t attain a buck soured ethnic networks, who can?

Andy
Monfried thinks he crapper support publishers do it. Monfried, a former
Advertising.com chief and underway CEO and originator of Lotame, says
he’s unconcealed the info sauce for monetizing ethnic networks — and
he says Google’s feat most it every wrong.

"You
can’t place up contextual ads against user-generated content," Monfried
says. "It’s irrelevant, and advertisers don’t poverty to venture their brands
on user-generated content."

Lotame doesn’t impact with the bounteous ethnic networks (MySpace, Friendster
or Facebook), but it has partnered with 16 small ethnic networks, from which
it has mass accumulation on 30 meg users. Monfried says Lotame
dramatically improves targeting for advertisers by doing things much as identifying the "influencers."

Monfried
was reluctant to divulge likewise whatever info on how Lotame’s solution
varies from Google’s ad-targeting platform, but says his consort is
focused on "verbs and actions." So instead of bringing ads supported on the book in users’ profiles, Lotame focuses on
users’ actions and demographic accumulation — much as when a 28-year-old
woman in Southern Calif. downloads a recording on a ethnic network.

"Google
does a enthusiastic employ of monetizing intent," says Ray Valdes, an shrink at
Gartner Research. "It knows what I’m intelligent for and it crapper exhibit me
relevant ads. But ethnic networks are not most intent."

Valdes argues that its dirty to shut Google’s approach
– after all, the company’s set playing is search, not ethnic media. And to be fair, Google said on yesterday’s earnings word call that
they’re disagreeable newborn things — including demographic targeting — and that they’ve seen whatever progress.

Photo: Flickr/Kyle Jones

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