Previously I played with the idea that the fact Google's (GOOG) stock was down was correlated with their Reader's privacy scandal and their lack of understanding of social software. Now it is official:
CFO George Reyes said the company has found that “social networking inventory is not monetizing as well as expected,” leading to higher than expected traffic acquisition costs.
http://blogs.barrons.com/.../-not-monetizing-as-well-as-expected/
Google on Thursday blamed the difficulty of making money from placing adverts on social networking sites for holding back its growth in the latest quarter, contributing to a 9 per cent slump in its shares in after-hours trading.
http://www.ft.com/.../-0000779fd2ac.html
Brin noted some things were tried that didn’t pan out. While Brin won’t talk about partners it’s fairly obvious that MySpace is an issue. Google is obligated to pay at least $900 million in minimum revenue guarantees to MySpace through 2010. Later, the question was revisited again. He noted that Google also has Orkut and other social networking partners. “We have an incredible amount of this inventory,” said Brin. “I don’t think we have the killer best way to monetize social networks yet. We have had a lot of experiments (and some disappointments).”
http://blogs.zdnet.com/BTL/?p=7835
One of the failed "experiments" Sergey Brin might be referring to is the US$900 million deal they made with MySpace in August, 2006. Maybe they were happy then, but just as they were inking the deal, Facebook was preparing their surprising growth in the shadows. The final blow came when Microsoft, and not Google, bought a portion of Facebook on October, 2007. A big difference on these deals: Microsoft bought Facebook, Google only the right to place ads in MySpace for a lot of money.Now Google has a bigger threat to worry about: Microsoft is going to buy Yahoo. Google even wrote an official plea at their blog. But I'm not sure who the good guys are anymore. Historically Microsoft has done a lot of wrong, but at least they have never misused my personal data. Not the same with Google. I really trusted Google until they started pushing my shared data to all my GMail's contacts. Almost two months have passed since that day, and they still haven't done anything to correct their wrong. So who should I worry more now? The desktop monopolist, or the personal data one?
More at Techmeme: Google not monetizing social network inventory and their anti MSyahoo plea.
