Interesting points, ig. When it comes to revenue, I ask myself "Why do people come to your site". The magic for Google/Yahoo is that you come to their site to leave their site, to find answers to questions like "Where can I find a diamond engagement ring?" and then they get the answers, and some highly relevant, highly lucrative ads.
For eBay, and Amazon, you come specifically with the intent to spend money on their site.
For Facebook, the name of the game is to get you on their site, keep you there, and to bring you back tomorrow to chat with your friends, something like AIM was 10 years ago, but with a better ad network. So far, with all of the businesses that want me to like them on Facebook, none of them have asked me to buy anything on Facebook, just spread their ads -- paid and earned.
Could Facebook be the next ebay or Amazon? Sure, if they want to let every business on their site use their "Pay with Facebook" feature to sell anything. For me, this would justify the current valuation not display ads.
Here's a link to LinkedIn's Q2 revenue (120 Million: http://mashable.com/2011/08/04/linkedin-q2-beats-street/), which again shows that display ads (plus premium membership fees) don't add up to what search ads, or commission fees do. Even for a site like LinkdIn which is more popular than either Amazon (30 Billion in annual revenue) or eBay (8 Billion in annual revenue).
I don't doubt the social utility (pardon the pun) of such networks (I am a founder of one myself), but I question just how much revenue these kind of peripheral ads can really generate.
On your Facebook profile set your relationship status to "engaged" and you'll start getting a lot of wedding related adverts. Sure it's not the same as advertising when a user is searching Google for "diamond ring". But a lot of people will never search online for a diamond ring, but they may see an advert on their Facebook for a diamond ring and click on it.
Google strength is that advertising is based upon search intent, it's also their weakness.
Imagine you were De Beers and you wanted to target people on Google who were engaged but weren't googling for "diamond ring", you might think you could buy ads on related keywords like "wedding invites" - but it turns out Google make it very hard to do this. Unless your ad directly relates to the search term you get a major quality score penalty which means you have to pay a huge premium to advertise.
Daily deal sites have been spending a lot on display ads (on Facebook and elsewhere), precisely because of this, because their customers didn't actively search for "daily deal sites" so the only way to reach them is through display ads. And who has the most display ad page views in the world ? - Facebook.
Do you have a source for LinkedIn's popularity being greater than Amazon or eBay? compete.com (not always the most reliable source, I'll admit) lists both sites as being more than 3 times as popular.
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Interesting points, ig. When it comes to revenue, I ask myself "Why do people come to your site". The magic for Google/Yahoo is that you come to their site to leave their site, to find answers to questions like "Where can I find a diamond engagement ring?" and then they get the answers, and some highly relevant, highly lucrative ads.
For eBay, and Amazon, you come specifically with the intent to spend money on their site.
For Facebook, the name of the game is to get you on their site, keep you there, and to bring you back tomorrow to chat with your friends, something like AIM was 10 years ago, but with a better ad network. So far, with all of the businesses that want me to like them on Facebook, none of them have asked me to buy anything on Facebook, just spread their ads -- paid and earned.
Could Facebook be the next ebay or Amazon? Sure, if they want to let every business on their site use their "Pay with Facebook" feature to sell anything. For me, this would justify the current valuation not display ads.
Here's a link to LinkedIn's Q2 revenue (120 Million: http://mashable.com/2011/08/04/linkedin-q2-beats-street/), which again shows that display ads (plus premium membership fees) don't add up to what search ads, or commission fees do. Even for a site like LinkdIn which is more popular than either Amazon (30 Billion in annual revenue) or eBay (8 Billion in annual revenue).
I don't doubt the social utility (pardon the pun) of such networks (I am a founder of one myself), but I question just how much revenue these kind of peripheral ads can really generate.
On your Facebook profile set your relationship status to "engaged" and you'll start getting a lot of wedding related adverts. Sure it's not the same as advertising when a user is searching Google for "diamond ring". But a lot of people will never search online for a diamond ring, but they may see an advert on their Facebook for a diamond ring and click on it.
Google strength is that advertising is based upon search intent, it's also their weakness.
Imagine you were De Beers and you wanted to target people on Google who were engaged but weren't googling for "diamond ring", you might think you could buy ads on related keywords like "wedding invites" - but it turns out Google make it very hard to do this. Unless your ad directly relates to the search term you get a major quality score penalty which means you have to pay a huge premium to advertise.
Daily deal sites have been spending a lot on display ads (on Facebook and elsewhere), precisely because of this, because their customers didn't actively search for "daily deal sites" so the only way to reach them is through display ads. And who has the most display ad page views in the world ? - Facebook.
Do you have a source for LinkedIn's popularity being greater than Amazon or eBay? compete.com (not always the most reliable source, I'll admit) lists both sites as being more than 3 times as popular.
Alexa.com has LinkdIn @ 13, Amazon @ 15, and ebay @ 21 globally.