Ng Khai Portal

Something happened to Facebook in April 2008 – it stopped being the second largest social network in the world. According to Media Trend Report, Facebook garnered over 115 million unique visitors for that month, officially overtaking MySpace.

MySpace is still number 1 in the US with about 72 million members,
while Facebook has only roughly half, about 36 million. But Facebook
garnered many more international accounts, and officially grew by over
75 million members in the last 12 months, while MySpace reportedly grew by less than 10 million members.

One of the things you probably have too much to read the last week was that Yahoo finally decided not to be taken over by Microsoft, and officially have said that they will do search advertising with Google.
Such a waste…. Right now, as I write this, Yahoo stocks is down more than 10 dollars to what Microsoft offered. By saying no, Yahoo has officially seen its market value decline by more than 15 billion dollars!

Why is Microsoft so keen to catch up in Search? Because search is the key to online advertising dollars. You can put ads in the mail, you can put ads in blogs, but it is mostly when people are searching something, and you give them ads relevants to the things that they are searching, that they are more likely to be responsive to the ads.

Why is this important? Because that is contextual advertising, and also responsive advertising. Contextual advertising is the reason why people feel that online ads are better – it actually tries to use some kind of algorithm and intelligence to sense what is the webpage you are reading, and try to put the relevant ads that is associated with it.

For instance, you are reading a blog of a person who talks about his weekend in Boracay. The blog will sense the blog is about travel, and it may advertise to you in the corner beach resorts, hotels, air travel plans etc. So comparably speaking, the advertisements will be more relevant.

However, just because you are reading a travel blog, or an email about a travel to Boracay does not necessarily mean that you really are looking for cheap air tickets or beach resorts. Based on my experience, advertisements of this sort get a click through of even less than 0.1%. That means you can put the ads there over a thousand times, and not once will it be clicked.

However, if you are doing a search for cheap air tickets, then lo and behold! This is the nirvana of marketers. You actually type on the search engine looking for cheap air tickets…. If I put in an ad for these tickets, you would not only have a higher chance of noticing but actually a much higher chance of you clicking on the ad, and actually buying the ticket!

Thus, the holy grail of getting more online advertisements, which incidentally is slated to increase still very strongly is to be the de facto search engine.

What’s at stake. This year, online ads are said to total 40 billion dollars and Microsoft only has about $2 billion on it, while Google may already have at least 4 times as much. It is estimated that Google now earns more from online ads than Microsoft earns from selling Windows! What’s more, in 2010, or less than 2 years away, online ads are slated to double to 80 billion dollars! Go figure!