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Brij Singh's Blog About Entrepreneurship

May 28, 2008

Google CEO: Next big reality in web2.0 is that it doesn’t monetize well

Well actual Netzökonom interview with Google CEO has headline as "The next big wave in advertising is the mobile internet". It's been nearly 9 years since we  have been waiting, with baited breath, the arrival of mobile web. One that can support garage startups, not just telecom behemoths. With the arrival of iPhone, it looks like we finally have something radical.

This interview has other interesting tidbits. Google execs are consistent in beating down the economics of social networks. They never fail to cite Myspace experience as the one which is not efficiently generating results. At the same time they see something on the horizon.

MySpace did not monetize as well as we thought. We have a lot of traffic, a lot of page views, but it is harder than we thought to get our ad network to work with social networks. When you are in social network, it is not likely that you´ll buy a washing machine. It is not a long term problem but it is taking us longer than we thought. We are trying new ways, new approaches all the time.

It is obvious that people spend a lot of time in social networks. I believe there will be some new advertising products, that will work, but I don't think they are invented yet. We and others are working on social advertising products.

That last sentence is for Facebook. There are lot of social ad prototypes in the fire but none that can give Adsense run for its money. Google's Open Social will eventually evolve AdSense for social advertisement and will rely on Open Social's API to give distribution power to marketers. Probably now is the time to lay pipes (read Open Social APIs), it's still need to be sorted out what type of social ads we will finally see.

He gave some hints on how video and engagement metric driven ad formats will appeal in this context:

The advertising has to be more entertaining, more interesting, more immersive compared to what we have today. That is my opinion. We are not there yet but I am optimistic that it could work very well. What it needs to get there – trial and error. That´s the way we do it at Google.

Also his vision of fragmented social network engagement can throw some light on why Open Social APIs will be used for linking long tail social networks:

we will see some big and many specialty networks which are no different from the communities of interests that exist in society. The tail of interests is very, very long. So I don't think there is a collapse down to one or two networks

Overall interesting interview. I would recommend you read the complete interview.

One side observation. He downplayed cloud computing business model by saying "our servers all all busy". If that's really the case then why all the fuss about Google App Engine?

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