The Ad Model is Wrong But Facebook is and will be a monetization machine

This post today says that advertising isn’t working on Facebook. Well the post missed the point. So did John Battelle. Ad products and standards haven’t yet evolved for the real value of Facebook – the communities. You can run a poll, give a gift, look at a banner…bla bla bla… The users of Facebook are savvy. So are the top advertisers. Look for a major ad buy on Facebook by a big player – no doubt it will happen soon.

Facebook will soon be a monetiztion machine. When the ad units evolve to match the social nature of the communities and communications then the money will flow big. John Battelle says that Google pagerank was the reason for their potential rise but he can’t see it now. Hey CNBC Facebook has the community model nailed. Yahoo groups is dying and a new generation of users will move to the facebook approach (imeem just announced music deal with Warner). More will come. Btw: pagerank wasn’t what made Google it was Adwords and Adsense that drove off of Googles search. Here with Facebook you have the user communities growing rapidly (like pagerank for search) and a yet to be developed ad model. That will come in the form of virtual goods which they are already doing and a new adsense like community ad model.

What is the ad model? If your looking in page view land (like all the VCs hunting page view elephants) then you won’t see it. Look elsewhere.

Pagerank is to Google as Community is to Facebook

Adwords/Adsense is to Google as ????? is to Facebook.

Facebook will be a monster in monetization in the next 18 months.

Updated Title: I typed to fast on making the title – Old Title: “This Post is Wrong” – Luke corrects it below. I agree it isn’t working in the current form so his post isn’t wrong. New Title: The Ad Model is Wrong … Sorry Luke

Author: John

Entrepreneur living in Palo Alto California and the Founder of SiliconANGLE Media

7 thoughts on “The Ad Model is Wrong But Facebook is and will be a monetization machine”

  1. Hey John – not sure how the post missed the point. It MADE the point! The point is simply that Facebook ad clickthroughs are really bad.

    I have no doubt that Facebook will monetise its community. That’s a different subject though. I was just scratching my head wondering why CTR on Facebook don’t stack up.


  2. John (Furrier), John (Battelle) is right. It’s PageRank that made Google. Without the efficiency of their search engine, they’d be toast (well, at least not a significant player). True, they had to figure out a way to make money from search. But without a sustainable competitive advantage in search, Google would have become a me-too search engine.

    And this is John Battelle’s point about Facebook that is dead-on. What does Facebook have that is a sustainable competitive advantage? At this point, nothing. Might happen. I like their team, a mix of young and bright “kids”, and seasoned execs. I wouldn’t put it past them to come up with a sustainable competitive advantage. But this point, it’s pure speculation.

    PageRank gave Google time to figure out a strategy. What does Facebook have that will do the same? Also, isn’t Facebook a bit elitist relative to MySpace? Discounting MySpace so soon seems a bit premature, drinking way too much Facebook Kool-Aid.

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