Google grappling with social advertising
Friday, February 1st, 2008
Interesting to see that Google is having trouble monetizing social media:
‘We have found that social networks are not monetising as well as we were expecting,’ said George Reyes, chief financial officer, as Google reported its earnings for the final quarter of last year.
Since Google has guaranteed to make minimum payments to a number of social networks that carry its advertising, principally MySpace, the slow growth of the business had left the company out of pocket and contributed to falling profit margins in the quarter, he added.
Sergey Brin, co-founder, said a number of initiatives in the final months of last year to boost social networking advertising had failed, but that he remained confident that Google would find ways to build a successful business around the growing traffic on these sites.
Other Google executives said that the difficulties arose from creating an appropriate ‘look and feel’ for adverts, so that they matched the content on social networks.