Social networks not the holy grail of advertising
No doubt, social networking sites are among the hottest items in the venture capital industry and trading floors. Yet, these popular sites failed to meet the targeted ad revenues.
According to WSJ, Google co-founder Sergey Brin has admitted they had overestimated the potential of these sites when he stated to the analysts, “We have had a challenge with social networking inventory as a whole and some of the monetization work we were doing there didn’t pan out as well as we had hoped.”
News Corp, the owner of MySpace, shares the same results. Though MySpace is one of the most visited sites around the world, it ironically managed to deliver only $23 million in operating income.
Some analysts blame contents for these are hard to categorize, in so doing confuse both consumers and marketers. On the other hand, others criticize the lack of permission from the community for this dismal performance.