

Why Yahoo is Good (But May Get Worse) (1998) - JacobAldridge
http://www.useit.com/alertbox/981101.html

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BonoboBoner
"But Yahoo's financial reports show that Web advertising is a very poor
revenue generator"

And then there was Google.

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jasonlotito
While I understand what you are saying (and doing =)), I do not think Google
disproves his entire argument. Basically, he asserts this based on the
following: "revenues of 0.4 cents per page view" and "Less than half a cent
per page view from an advertising-based service is fine if the service has as
much traffic as Yahoo. But most other sites will not be able to survive on
such low income."

So Google makes money off of advertising because of its reach.

~~~
BonoboBoner
But that is true of advertising in general, I think. Whenever you deal with
ads, it is about how many people you can reach with it. Nobody is willing to
put a big ad in the middle of the desert, right? Are freeway billboards bad
revenue generators just because thousands of cars have to pass by them?

~~~
jasonlotito
Not necessarily. On the web, few people can afford to succeed based on
advertising. Compare that to the real world, and this is simply not the case.
Location plays an important role. Take radio advertising. It makes wonderful
sense for local businesses to advertise on the radio. They hit a targeted
market, and usually they can reach a specific demographic depending on the
radio station. (My father is in radio, so I've learned quite a bit about it
=)).

Of course radio, like TV, have the advantage that advertising replaces
content.

Billboards don't. However, they are informational rather than strictly
advertising. Either they are promoting an idea/brand, or they are informing
you to get off at the next exit for a particular service (or encouraging you
to wait 15 minutes before taking a break at their place).

What this all means is that advertising in other formats serve a different
purpose. Take the yellow pages back in the day. Having a larger ad usually
meant people would call you first. Sure, you may not have thousands of eyes
looking at your ad, you might only get 50-100 new customers, but that business
easily pays for your ad.

This is what the web is struggling with, even now with targeted advertising.

Sure, you can target people's interests and locations and give them focused
ads, but can you do that at an international scale? Very few can.

