Red Herring has reported on a comScore report stating that Fox Interactive, largely through Myspace, has surpassed Yahoo as the top dog for monthly page views:
Fox Interactive Media’s total U.S. page views increased to 39.5 million from 38.7 million during November. By contrast, Yahoo’s page views declined to 38 million from 41.6 million.
‚ÄúFox Interactive Media passed Yahoo for top property by page views for the first time,‚Ä? UBS analyst Benjamin Schachter wrote on Monday in a report.
The news is further proof that Rupert Murdoch’s News Corp.—which last year paid $580 million for MySpace parent Intermix Media—strategy to acquire a major Internet presence has paid off.
That is impressive, but last time I checked page views don’t necessarily correlate with revenue. For example, which of the following scenarios likely drives the most revenue:
b. 10,000,000 page views worth of search engine results with ads targeted based on the term a person searched for.
c. 10,000,000 page views worth of video downloads with ads served around the videos.
Personally, I’d put my money on “b” because it has the highest CPM. Here’s the math based on a few CPM assumptions:
b. $0.50 per click with clicks generated 5% of the time for a $25 CPM = $250,000
c. $15 CPM = $150,000 MINUS the net difference in bandwidth costs compared to 10 million non-video web pages.
Clearly, Yahoo of MySpace aren’t dependent on only one form of advertising. For example, MySpace generates PPC revenue from searches. Yahoo generates CPM revenue from tons of non-search related page views. Google has the highest percentage of search related click revenues of any company at this point. That’s where the big money and margins is at today. Could it move to other things, like online video advertising in pre or post-roll ads on YouTube or a new form of online advertising that hasn’t been invented yet? Absolutely. But for now, any valuation based on page views without taking revenue into consideration would be a mistake.
Steve Rubel posted a review of Fortune’s cover story on Google that includes this interesting quote:
Fortune magazine has a lengthy cover story on the chaotic way Google runs. What’s clear from the piece is that Google is desperately working hard to find its next hit because it’s really only had one - search. Even Eric Schmidt notes that Google’s most die-hard fans can’t remember all of their products. Most folks I know use one, Google.com.
Is search Google’s only success to date? Absolutely not. Search was Google’s first success, and continues to be their primary offering. However, Google Adwords and Google AdSense are clearly big hits as well. In fact, AdWords and AdSense are by far the main sources of income for Google, so discounting their value is a major oversight.
Google wasn’t the first company to create a pay per click program. For a while, Goto.com, which became Overture and was later acquired by Yahoo was the dominant player in pay per click search. The day Google launched AdWords it was clear to me and many pay per click marketing colleagues that the game had changed. The more sophisticated matching options gave users more control over when their ads would be shown while at the same time allowing Google to display ads on a larger percentage of searches than Overture’s system allowed. Since acquiring Overture, Yahoo has been in catch-up mode with painful delays in upgrades to their now dated pay per click ad service.
In addition to AdWords, Google AdSense is another hit not to be ignored. Google AdSense has become a major revenue source, and in some cases the primary revenue source, for thousands, if not millions of bloggers, news sites, and other online publishers. Figuring out how to serve ads contextually relevant to the content of million and millions of pages is no easy task. Doing so leads to relatively high click through rates, which drives traffic to advertiser’s sites while driving ad dollars into publisher’s and Google’s pockets.
Maps is an interesting one to consider as well. It hasn’t become the market leader, currently lagging behind MapQuest and Yahoo if my memory serves me right. However, if you count the thousands of sites using the Google Maps API, I imagine Google’s mapping technology is more distributed than people give them credit for at this point. Not a bad position to be in as they start to roll out advertising onto those maps.
Looking ahead, adding additional ad distribution channels to AdWords such as radio and print advertising buys through a single ad buying interface makes like easy for advertisers. Creating new, higher paying, or less costly ad inventory (inventory without a sales team) opportunities for publishers in fields beyond the web is a clear growth strategy for Google based on their experiments with print and their acquisition of radio ad companies.
Yahoo has accounted a partnership with Acer to make Yahoo the default search engine on Microsoft Internet Explorer browsers shipped with new computers.
Yahoo search to run on all PCs of Taiwan’s Acer - Yahoo! News
Yahoo Inc. has signed a multiyear distribution deal to feature its Internet search services on all personal computers from Taiwan’s Acer Inc., the world’s No. 4-ranked computer notebook maker, the companies said on Wednesday. Acer, which is the top supplier of PC notebooks in Europe and the third-ranked manufacturer in Asia, plans to feature Yahoo as the default way users search on the Microsoft Internet Explorer browser.
I assume this means Yahoo will be the default homepage for Acer Computer purchasers. It may also mean that typos typed into the address bar will resolve to Yahoo search results. And Acer computers will come with the Yahoo toolbar preinstalled, so they’ll have easy access to many Yahoo properties including Yahoo Mail and likely Yahoo Chat as well.
The question I have is, “Do preset homepages and toolbars influence the search market?” My guess is that they certainly do in the short term. In fact, default search pages probably help explain why people so often search for search engines. Why would someone search for a search engine if they knew how to change their default homepage?
In the longer run, setting a default homepage will only help you so much. Look at MSN, which has set more default homepages than any other search company in the history of the Internet, yet lags behind Google and Yahoo who’ve only recently started to play in this game.
By the way, do your friends and relatives a favor by asking them what their favorite search engine is. If it’s not their browser’s default homepage, ask them if they’d like help switching to it. Or, if they’re using a browser with a search box, like FireFox or Safari (and I believe IE7), show them how to set the default search engine for that.
Andrew Goodman reports that Yahoo search results are now displaying a PayPal shopping cart icon alongside sponsored search results from retailers using PayPal’s checkout system.
Is this a reaction to Google Checkout’s integration with Adwords?
What does this tell us about Yahoo’s relationship with Ebay? Did it just become closer than we knew?
How are Yahoo advertisers not offering direct sales (thus, no PayPal opportunity) helped or hurt by the selective display of this icon? Does it generate higher clicks for those displaying it?
What is the bar for having the icon displayed? Could I simply set up a donate button on this site to generate the icon next to my ads, or sell technology fortunes for $999?
More importantly, how does this really help consumers? I’m still trying to figure that out.
Andrew Goodman reports that Yahoo search results are now displaying a PayPal shopping cart icon alongside sponsored search results from retailers using PayPal’s checkout system.
Is this a reaction to Google Checkout’s integration with Adwords?
What does this tell us about Yahoo’s relationship with Ebay? Did it just become closer than we knew?
How are Yahoo advertisers not offering direct sales (thus, no PayPal opportunity) helped or hurt by the selective display of this icon? Does it generate higher clicks for those displaying it?
What is the bar for having the icon displayed? Could I simply set up a donate button on this site to generate the icon next to my ads, or sell technology fortunes for $999?
More importantly, how does this really help consumers? I’m still trying to figure that out.
Andrew Goodman reports that Yahoo search results are now displaying a PayPal shopping cart icon alongside sponsored search results from retailers using PayPal’s checkout system.
Is this a reaction to Google Checkout’s integration with Adwords?
What does this tell us about Yahoo’s relationship with Ebay? Did it just become closer than we knew?
How are Yahoo advertisers not offering direct sales (thus, no PayPal opportunity) helped or hurt by the selective display of this icon? Does it generate higher clicks for those displaying it?
What is the bar for having the icon displayed? Could I simply set up a donate button on this site to generate the icon next to my ads, or sell technology fortunes for $999?
More importantly, how does this really help consumers? I’m still trying to figure that out.
Ian Kallen has put together a great post offering an up to date look at the web spam ecosystem and the role Google plays and profits from this trash.
The Google Web Spam Ecosystem - Ian Kallen’s Weblog
“Web spam isn’t new, this has been going on for years and at this point, one must conclude that Google’s not serious about doing anything about their spam problems. There used to be a qualification step for AdSense and they’d reject sites that didn’t meet some basic criteria as legitimate sources of content. But that stopped about a year and a half ago and the spam has been pouring on ever since. The video is a call to action to complain to Google; they have a fidicuary responsibility to move against the abuse. The video shows a search for forklifts to illustrate rampant ad policy violations.”
Kallen included a recent YouTube video by a knowledgable pay per click guru who demonstrates numerous examples of Google failing to uphold their own Terms of Service on landing page quality (nothing but more ads from Google) and multiple AdWords accounts (to place multiple ads on the same terms).
I wonder how much of a hit Google’s earnings would take if they suddenly started enforcing their own TOS. How much are they hurting their long term pay per click revenue potential by profiting from this today? What happens if users become blind to pay per click advertisements after getting burned one time too many by Google’s low quality ads?
Less than a month ago, I mentioned that Technorati had switched from Google Adwords to Yahoo Search Marketing as their ad server of choice on search results pages. At the time, the ads looked like this:
Floyd Landis has been blogged about almost 7,000 times over this period, and apparently it was long enough for Technorati to learn that Google drives more revenue than Yahoo for their site.
Whoever has the most advertisers and ads in their network - assuming the ad network functions properly - will be able to serve more relevant ads at a higher average cost per click than their competitors. And the ads should get clicked more often, since they’re more relevant to searchers. More money generated by the ad network leads to more money to split among the ad network and publishers.
Will FaceBook come to a similar realization about their recently signed ad deal with Microsoft? Only time will tell.
It turns out that Google doesn’t own the advertising rights to the entire social networking world:
Microsoft and Facebook in Web ad deal
Facebook and Microsoft Corp on Wednesday said the world’s largest software maker will become the exclusive provider of banner advertising and sponsored links on the social networking Web site as part of a strategic alliance.
I’ve written previously about how Google (and Microsoft, for that matter) don’t have to out-YouTube YouTube or out-MySpace MySpace or Facebook to reap the benefits of this new type of web platform. Just be the ad platform of choice for every new online venture someone thinks up.
Why would Facebook choose Microsoft over Google for advertising? I don’t know. Google has more advertisers, more ads, and a more mature ad platform that can probably serve more relevant ads than Microsoft’s leading to more clicks. Microsoft could have offered Facebook a larger piece of the pie, but the pie is likely smaller.
Yesterday, I discussed the issues Simon Delivers faces with the natural search results on this page. Today, let’s take a look at the Sponsored Links coming from Google AdWords:
Safeway.com
homebistro.com
Yellowpages.AOL.com
shopping.com
peapod.com
All are relevant to the given search, which is a good start, but things fall apart when I start clicking on them:
- Safeway.com: Safeway Now Delivering in: Arizona, California, Maryland, Oregon, Virginia, Washington and Washington, D.C.
- homebistro.com: Actually is relevant.
- Yellowpages.AOL.com: sent me to a form rather than a page containing what I searched for:
- shopping.com: A shopping.com results page containing nothing but sponsored search results above the fold (I believe they’re served by Google AdWords) followed by a handful of grocery items.
- peapod.com: Offer limited to the following areas: Chicagoland, Milwaukee and SE Wisconsin, Connecticut, Massachusetts, Rhode Island, New York, New Jersey, Washington, DC, Maryland, Virginia.
My biggest gripe with this series of ads is the display of ads from businesses who are not physically capable of serving me. PeaPod and Safeway are wasting their money and my time by serving ads to someone in Minnesota. If they were more AdWords savvy, they would set their ads to only display in markets they served. One exception: If I searched from Minnesota for the term [arizona grocery delivery] my search would be relevant for Safeway, and [maryland grocery delivery] would be relevant for Peapod because I’ve geographically qualified my search.
Should Google better police their advertiser’s ads? Google makes money on those clicks, so do they care if they’re entirely relevant? In the long run, I think Google is better off providing fewer but more relevant sponsored results if they want to keep the clicks coming. Why would people continue to click on ads if there is such a lower chance of finding what they’re trying to buy?
Or is it up to advertisers to use Google’s ad platform however they see fit? Sure, some will waste money advertising to poorly chosen audiences, but that’s not Google’s fault. Who is ultimately responsible for providing truly relevant content to searchers?
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