in Half Moon Bay, Calif.
Panelists focused their criticism on keyword-based search advertising and on much of the advertising linked to popular social networking sites, such as MySpace and Facebook.
Paul Martino, CEO of Aggregate Knowledge, an online service that helps connect customers to interesting new products, derided most of the advertising on social networking sites as "naive, profile-based matching" that often misses the mark. Lise Buyer, founder of IPO consulting firm
Class V Group, concurred, recalling how she was dogged by car advertisers on the Web for over a year after she had already bought a vehicle.
"There is no question that people who have tried to make money advertising on social networking sites are really struggling," added Benchmark Capital general partner
Bill Gurley.
Samir Arora (right), CEO of Glam Media, explained the challenge this way: "When people are spending this much time on these sites, it becomes really seductive to assume there is a monetization opportunity. I'm not saying there isn't, but it isn't easy."
Panelists said the current Internet environment calls into question the conventional wisdom that traffic guarantees ad dollars, pointing out that it might be a struggle to place ads on some highly popular Web 2.0 destinations, such as the gross-out "pop ur zit" application on Facebook and the homemade "cat riding skateboard" videos on YouTube. As a result, Gurley predicted there would be fewer acquisitions of Web sites with large audiences but soft revenues. "This idea that someone will acquire you and then think about monetization ... it's not even working at MySpace," he said.
- Andrea OrrSee program agenda for AlwaysOn Venture Summit WestSee Dec. 6 post from The Tech Talk Blog
