Google Purchases YouTube for $1.65 Billion

Google grabs YouTube for $1.65 Billion

Google has once again made a clutch offensive move in the Internet advertising world by purchasing the hugely popular video streaming site YouTube. Google is purchasing YouTube for $1.65 billion, making it easily the largest investment the company has ever made. YouTube is a social site which allows members to upload and share personal videos. The site has become immensely popular with now over 70 million online viewers. A surprising outcome from this transaction is the fact that even with Google’s huge bid of $1.65 billion for the company; YouTube is still an unprofitable company. Most of the videos hosted on YouTube are home movies, but there is still a handful of copyrighted material that pops up from time to time. This has caused much criticism on YouTube’s behalf, with many people comparing the company to the original Napster.

However, Google was obviously not worried about the potential lawsuits. Before this purchase, Google has been trying to promote their own video site know as Google Videos, but they have not been nearly as successful as YouTube in this market. Google obviously realized that they could not compete with YouTube, so they turned to the next best option; buying them up. Google is thinking about the future of online advertising with this move. They will once again revolutionize the online advertising market by offering rich streaming media for advertisers, as television advertising looses its appeal.

This spells nothing but trouble for Google’s competitors, like Yahoo, who have relied on many other business models other than advertising to produce profits since Google has been dominating this market for the past couple years. This was a brilliant move for Google in my opinion. With control of a site as popular as YouTube, Google is certainly going to be able to provide an unmatchable advertising product. Google’s stock value may still be over-inflated, but I think that they are moving in the right direction, so their true trade value will probably remain fairly high. As the Internet becomes more of a staple for the advertising world, Google will certainly be in the forefront for a long time to come. I am very interested in finding out what Google has planned next in their quest to conquer the Internet advertising world.

vFlyer to Offer Free Online Flyer Service

Internet Startup offers Free Online Classified Advertisements to Sellers

The brand new Internet startup company known as vFlyer is in the beta phase of offering its new service for creating free online classified advertisements. This company, which is based in San Francisco, is offering a unique and original service for sellers on the Internet. Their service allows advertisers to create a unique single page classified flyer that can be used for selling pretty much any good or service. The obvious products would be automobiles and real estate, but their service has a seemingly unlimited set of uses. The best thing about vFlyer’s classified ads, which you can create from 30 professional designs, is that they are completely free.

When the site goes live, anyone can become a member and start creating these classified flyers. When you have created an ad with vFlyer’s software, you will be able to export the page into raw HTML code that can be embedded into a website, or any online classified marketplace, such as Craigslist. vFlyer will take care of posting your classified advertisement to all the major classified search engines, like eBay, Google Base, and Oodle.

vFlyer is also going to be offering many other ways that you can promote your flyer. Their software will allow you to save the page to your computer, forward it to a friend, or even send to a printing company to print real flyers. Users can also embed the flyers into an email and send mass mails for marketing. The service will initially be offered completely for free, but vFlyer is planning on offering a subscription based service for large marketers. Their paid subscribers, and also online ads embedded into users flyers will generate most of the revenues for the company according to Oliver Muoto, co-founder of vFlyer.

Their philosophy is somewhat different that other marketing services. Instead of providing the hosting of the flyers, they are simply providing a service that will allow sellers to create the flyer. The seller can then use the flyer with whatever service they want, from being hosted by Google to being printed and posted on the streets. I think this business model is original and I am confident that this company will do well. I know for a fact that there is a huge demand for a service just like this, and vFlyer will offer the service that online marketers demand. I believe that this business will take off for vFlyer when they finally go live. I am interested in signing up when this service is eventually offered. I am sure that others will be too.

WildTangent Begins Token System for Free Gaming

WildTangent Offers Free Games through Online Advertising

Placing advertisements within video games is nothing new, but the online game developer, WildTangent is allowing its users to play their Internet games for free through a new advertising system. This new system, tagged WildCoins, is an online token system that allows the users to play the WildTangent games for extended periods of time, while the game dynamically serves paid advertisements. To purchase and play a game developed by WildTangent, the user typically has to pay $19.95 for that right. This new token system allows people to try out a game for free and if they choose to do so, they can purchase a full version of the game without the advertisements.

Coke is offering the tokens as prizes through its MyCoke Rewards website. This website allows users to enter in codes that are marked on Coke bottle caps, and with a number of codes entered, you can claim prizes. WildTangent offers 250 games that appeal to a wide range of demographic groups, including children, mothers, and of course young men. This is a huge market, and the online gaming industry is expected to become a $2.1 billion phenomenon by 2008.

The WildCoins tokens will also be offered at wildtangent.com for $5 to $20 per month for a numbered pack. The tokens can be used in future months to come and they can be used on any of the 250 games that they offer. WildTangent is also offering a share of the revenue generated by the token system to their game developers.

I think that this form of advertising system is a very innovative idea. This offers advertisers a great way to place simple banner-based ads in a system that is sure to get consumers to see them. The member gamers will love the idea of being able to play the games for free and for as long as they want. A simple ad will not disrupt gameplay, but is certain to make a lasting impression on the potential consumer. Of course this type of system cannot offer contextual based advertisements because the number of games offered is limited. The program will rotate through a number of ads, based on the amount of time a member plays a certain game. This form of advertising is certain to reach a huge number of consumers since video games are now popular among many age groups. I think this advertising system will do very well in the future, and I am certain that we will see more advertisements placed within video games in the future.

Windows Live Expo Offers Paid Ads for Classifieds

Microsoft to Offer Paid Spotlight Ads with Free Classifieds

The free classifieds website, know as Craigslist.com, has made it easy for people to buy and sell used items over the internet for free. Microsoft has recently tried to cut into this market by deploying their own version of a free classifieds site known as Windows Live Expo. The idea is similar to Craigslist, where people can list items to sell to other locals, just like newspaper classified listings. However, Microsoft upped the ante once again, by offering paid Spotlight Ads for the members listed items. These Spotlight Ads, provided by AdMission, are a cross between simple banner ads and contextual based ads. The ads will be placed in search results and homepages for similar listed items.

These advertisements come in standard banner, leaderboard, skyscraper and wide skyscraper formats, and will allow the members to place thumbnail photos within the ads. Member ads will be shared with other ads of related categories, so the ad will have more of a chance to reach a potential buyer. Microsoft is expected to charge between $10 and $20 for an item to be listed with the Spotlight Ads. The question remains, however, whether people will be willing to pay for these simple advertisements when they can still list their items for free within the same site. In my opinion, I would much rather sell my item on EBay for a nominal price, and have a much greater chance of selling it, than to list the item with a classifieds site and pay $20 to have simple ads distributed in places where I’m not sure consumers will even see.

In the initial offering, the Spotlight Ads will only be available to automobile and real estate advertisers. Since these items have a much greater monetary value than most items listed in classifieds, the advertiser is more likely to sign up for a pay-based ad than someone just selling a toaster. These advertisers are used to paying to have their cars or houses listed in their local newspaper listings. Microsoft hopes that this advertising model will take off and then allow them to expand the market to other advertisers selling just about anything. However, AdMission has some in-ad features that Microsoft will not be offering in their ads on Live Expo. These features include e-commerce, send-to-a-friend, make-an-offer, and PayPal payment gateways. If this idea really takes off for Microsoft’s Live Expo, then I would believe that they would have to implement these advanced features within their ads. It will be interesting to see how well this advertising plan does, but I still believe that Microsoft will have to fight a lot harder to take over a market that is currently dominated by EBay and Craigslist.

Google Signs Online Advertising Deal with News Corporation

Topic #2: Google Partners with MySpace to Include Contextual Based Advertisements

Last month in August, Google signed a three year $900 million deal with News Corp. to bring contextual based online advertisements to MySpace, IGN, and Fox Interactive Media websites. News Corp., who owns MySpace has definitely received the better end of this deal. Since News Corp. acquired MySpace in 2005 for $580 million, they have not seen the advertisement revenues that they had initially expected. This was due to MySpace’s limited non-target-based banner advertisements. The future of online advertising truly lies with contextual based ads. Currently, Google is the largest site for contextual, search based online advertisements.

Nowadays, anyone who has a website that promotes a product or service wants to know how they can get their site ranked on Google. Back in 2000, when Google noticed the increasing trend of people who demanded their sites be listed on their search engine, they decided to launch Google AdWords. This is Google’s Pay-Per-Click online advertisements that you always see at the top and right sides of any search in Google. People who subscribe to this service pay Google whenever someone clicks on their link that is listed for certain key search words. More recently, in 2003, Google launched its contextual online advertising program known as Google AdSense. This is a program where people can subscribe to have online ads that are similar to the content of their site placed on their websites. Google pays the people that display the ads on their websites based on the number of clicks each ad receives. The AdSense program is similar to what Google is offering MySpace with this deal, except on a much larger scale.

MySpace, which is America’s most popular website, receives 4.46 percent of all Internet traffic. Google obviously saw this as a huge opportunity to place their contextual based advertisements on sites that would generate millions of clicks. Even though MySpace is America’s most visited website, they were not earning anywhere near their maximum potential revenues based on online advertisements. Internet advertising revenues increased by 30 percent in 2005, but MySpace did not follow this trend. This happened because their advertisements were tacky banner based ads that were attached to profiles randomly, not based on the profiles content. Google noticed this and decided to step in to help MySpace in their dilemma, and also make some revenue while doing so.

This is not the first time that Google has partnered with a major company to promote online advertisements. Earlier in August, Google signed a deal with Viacom, who owns MTV, to syndicate video clips from MTV and Nickelodeon over Google’s AdSense program. The reason so many companies choose Google to advertise their services is because Google places the ads where buyers are likely to see them and click on them, which then turns into a potential transaction for the advertiser. Google is certainly the undisputed champion in the online advertising world. Their deal with MySpace to place contextual based ads on user profiles is yet another reason you will want to advertise with Google.

AOL Offers Free Advertisement Based Service

Today every major company has their own business website, and many small businesses also have a website to advertise their services. Not every individual who has Internet access has their own personal website, but with the newest web technology, known as a ‘blog’ anyone who wants a website can host one for free. There are many free blog sites available today, and the most popular by far are Blogger.com and WordPress.org. This blog was created to inform the reader about the current forms of Online Advertising and also where the future of Online Advertising is going. My name is Chris Rubacky and I graduated in 2005 from Washington College with a B.A. in Computer Science and I am currently employed at HostMySite.com as a Web Server Analyst. This blog is also part of a project for a class I am currently enrolled in at the University of Delaware. The class is titled BUAD477: Information Technology Applications in Marketing. I decided to take this class because of my personal interest in Internet Marketing, and also because I am currently developing an Online Advertising portal of my own known as AdverLize.com, which will be deployed sometime in the near future. Online Advertising has gone through many changes in the few years that it has existed. My plan for this blog is to prove to you that it is a crucial part of the Internet and is the future of all forms of advertising.

Topic #1: AOL Offers Its Service for Free to Broadband Users

The first topic I want to discuss is the fact that America Online, also known as AOL, is now offering its services completely free to users that have an Internet connection from another provider. This was speculated on by Forbes Magazine in this online article: Forbes Article

This usually means that the subscribers have some type of broadband access, such as a cable modem or DSL. But how can AOL afford to offer its services for free? The answer is Online Advertising. For many years AOL was the largest ISP in the US, but since their services were based on dialup modem access, they were left in the dust by the broadband revolution. Today cable and phone companies dominate this market because they provide the mediums for broadband access. Subsequently, AOL has completely rewritten their business model so that they are primarily focusing on Online Advertising for revenues. This article questions whether or not AOL’s revenues will increase due to the new free, ad-based online service. My assumption is that this strategy will bring AOL back into the ISP picture, at least for a few years to come. My assumption is based on the fact that AOL still has a large subscriber base that has kept the service for email, despite the fact that they now have broadband Internet access. AOL has always had a large stake in the Online Advertising market because of their large audience. They are now the third-largest online advertising network, and in the second quarter of 2006 their advertising revenues grew by 40 percent, but I believe they had this planned for a while now. In 2004 AOL purchased Advertising.com for $435 million, the largest third-party advertisement network. The Washington Post wrote about this purchase intially in this article: Washington Post Article

AOL’s CEO, Jonathan F. Miller was quoted: “Online advertising is showing very strong growth across the industry, and the acquisition of Advertising.com underscores AOL's determination to strengthen its competitive position. Advertising.com has built a profitable, scalable and highly attractive business. This acquisition is a strategic move that will bolster AOL's advertising business, building on the strides made in the past year.” Advertising.com hosts ads that supposedly reach 70 percent of all US Internet users. AOL’s acquisition of Advertising.com was definitely a strategic step towards their now free, ad-based service. AOL now has a portal that advertisers can go to register to their advertisements and have them hosted by AOL’s service: http://advisor.aol.com/

Their advertisement service allows advertisers to have their ads strategically placed within their system to reach a certain audience. This is known as ‘Target Based Advertising’. They also have many different types of ads that advertisers can choose from. The most common being a banner based ad with both static and dynamic content. However, they now offer some new forms of ads, including AIM based ads and floating ads that ‘float’ in an invisible layer on top of the page.

Will AOL’s new advertisement based business model turn them into the online giant they once were? Probably not, but in my opinion, this is a step in the right direction for AOL’s future. Advertising is everywhere on the Internet, but the tricky part is getting your particular ad seen by a certain audience. For the first time in 13 years, AOL has once again revolutionized the way people view the internet.