Maybe owning Yahoo! (NASDAQ: YHOO) would not be so bad after all. It looks like the "hot" properties of Web 2.0, especially social networks and video-sharing sites, are not doing as well as expected.
According to The Wall Street Journal, Google (NASDAQ: GOOG) co-founder Sergey Brin told 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." In other words, ad sales are not living up to expectations.
When News Corp (NYSE: NWS) announced earnings, its "other" revenue category, which is mostly its internet properties, grew well, but operating income was only $23 million. Not much to show for owning MySpace, one of the most visited internet sites in the world.
Why should anyone be surprised? A look at social network sites and video sharing services shows that they are a warren of personal posts from members and grainy videos that are short and hard to put into categories.
Social networks and video-sharing sites will never bring in a lot of revenue because they are a maze of confusion for users and marketers alike.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
2-05-2008 @ 7:49AM
Devo said...
I think the one thing people will soon realize is that anything but search is tough to monetize. Sure you can slap a reasonably targetted display ad on many pages. But to really make a profit is going to require a search query. Only then do you really know what people are interested in.