From a piece in the NYTimes:

…social networking inventory is not monetizing as well as we would like,” said George Reyes, Google’s chief financial officer… In 2006, Google agreed to a three-year deal to sell ads on MySpace, committing to pay a minimum of $900 million. People involved in that deal said that Google never assumed that it would earn its $900 million back from that deal, but it appears to be losing even more than it had expected.

Three things come to mind:

1. Social networks like MySpace are among the most visited sites on the Internet. That’s a lot of page views.

2. Ad inventory at MySpace isn’t working out. That’s a fact according to a quote of Sergey Brin within the article where he acknowledges a failure to monetize.

3. Has the flood of inventory at MySpace and other social networks negatively affected the supply and demand ratio of average-joe publishers, resulting in lower earnings?

Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Facebook
  • Reddit
  • Technorati