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MySpace, Facebook add advertising value

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Back in August, The Wall Street Journal wrote about the problems that Facebook and News Corp (NYSE: NWS)'s MySpace may have providing value to advertisers:

... Advertisers say the addictive quality of social networking means users are so busy reading about their friends that they hardly notice display ads and, even if they do, are loath to navigate away to an advertiser's site. Advertisers say the percentage of people that click on display ads is lower on Facebook, News Corp.'s MySpace and other similar sites than on other popular Web sites like Yahoo Finance and CNET Networks Inc.'s News.com site.

Well now the sites have new plans to better attract surfers to the ads. MySpace is setting up a plan for smaller advertisers to use the site through some kind of self-service system.

Meanwhile Facebook plans to give users the option of letting the site track their internet browsing on advertisers' sites and share it with their friends. According (subscription required) to The Wall Street Journal, "Facebook also plans to begin allowing marketers to place more highly targeted ads on Facebook, based on information such as people's interests and favorite movies."

These changes show that the social networking sites are still a way's off from monetizing their sites to the extent that they will need to to justify the big valuations the market is affording them.

I'm a little bit skeptical, for just the reason The Wall Street Journal mentioned back in August, about whether social networking will ever be the profit bonanza the companies investing in the sites hope they'll be.
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Last updated: November 10, 2009: 08:43 PM

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