Are social networks dragging down CPMs?



My pal Mark Dempster over at Sequoia sent me a study on CPM's dropping.

The key finding here, in my mind, is what I've said all along: social networks are great for traffic but horrible for advertising. Social networking sites are probably not going to figure out a way to insert advertising into people's conversations--just like message boards, chat rooms, and IM didn't.

Again, communication services are amazing for traffic, but they suck for advertising. High CPMs are going to be reserved for vertical content and search, where people are in the cognitive mindset to consume sponsor messages, which when correctly aligned are perceived as content.
  • "Among the verticals, Social Networking led the plunge with monetization dropping 47 percent, from 37 cents in March to 19 cents in April, below January lows of 22 cents. Entertainment monetization dropped 17 percent from 40 cents in March to 33 cents in April. Gaming and Sports were down marginally (4 percent and 5 percent, respectively). Technology remained relatively flat at 83 cents in April vs. 82 cents in March, but is still off January highs of 92 cents."
If I was running a social networking site like MySpace and Facebook I would REMOVE ADVERTISING and drive all the traffic I could from the social network to niche content sites and search where it monetizes really well. This way folks feel like there is no advertising on Facebook/MySpace and they spend more time there.*
JasonNation: What do you think social networking sites should do to monetize their traffic?




* No, I'm not asking to get bought by Facebook or MySpace... I'm just pointing out what I think the right strategy is for social networking sites: build traffic and dump it to places that make money.

Sydney Blogger Breakfast

Tyler here with a new bit of info...

As the regular readers know, when Jason is abroad speaking at conferences, we like to set up blogger meetups in the area.

So with CeBIT Australia quickly approaching we've reserved space at Botanica Brasserie at Sheraton on the Park for an open Blogger Breakfast on Wednesday the 21st from 9-11am.


I personally look forward to these meetups, as they're a great way of meeting fellow webheads from all over.
So if you're in the area and planning on joining us, drop me a line at tyler at mahalo

Also, for those who can't get up in time, there is the Entrepreneur's Dinner the following night on Thursday at Ciel Rouge in Darlinghurst. More info here -- http://www.innovationbay.com/Events

Mahalo Daily host search down to six finalists...

We're down to the final six finalists to be the host of Mahalo Daily and folks are getting very excited!

Leah D'Emilio had 130+ comments on our blog in *one* day for her hosting job with Capoeira Besouro.
http://daily.mahalo.com/2008/05/13/md120-leah-demilios-mahalo-daily-capoeira-besouro/

Michelle Hummel has 30+ comments after a few hours for her electric go-kart racing show.
http://daily.mahalo.com/2008/05/14/md121-michelle-hummels-mahalo-daily-go-kart-racing/

It's important to note we're NOT just looking for a pretty face to replace Veronica. Nope, Veronica was the complete package in terms of being able to produce, write, and host and we expect nothing less from the new host.

Leah and Michelle, and the next four hopefuls you'll see over the next couple of days, each chose the topic of their show, wrote the copy, and helped the editors cut the show. We need a host who has the hustle and brains to produce great shows, not just show and say a few lines.

The entire Mahalo Daily team is really excited about the final six and we can't wait to see where this winds up.

Now, for the big question: what do we do after the six shows air. There are three schools of thought:
  • We pick a winner based on audience and internal feedback.
  • We let go of one contestant and do another round of five shows. Over the next five weeks we drop one contestant until we have our host. This would be the most dramatic way to do it.
  • Somewhere between number one and two (i.e. we go from six contestant to three, to two, and then to one).

I'm going to ask the Mahalo Daily team to put a survey up at Mahalo Daily asking the audience what they would most want to see.

(update: here the survey... which you can do here or over at mahalodaily.com)


Good luck to all the contestants... you're doing an amazing job!

Mahalo Screencast: Longer, wider Guide Notes, plus superfast HTML caching with EdgeCast

Did a quick screen cast about Mahalo's new longer Guide Notes and super fast network. You can watch the Mahalo Screencast here and please do leave comment below.

Special thanks to our friends at EdgeCast for really helping us make the site uberfast.

Heading down under

Tyler here with a shout out to everyone who'll be in the Sydney area during CeBit Australia May 19-22

Feel free to join us for the open breakfast wed morning or the open dinner on thu evening, drop me a line at tyler at mahalo if you're planning on joining either. Also open to do interviews and such during the press meeting times on the schedule.


Monday

5.30pm - 7.30pm CeBIT / NSW Govt Reception
Official welcome to Sydney at the Government House hosted by the NSW Government

7.30 - 8.30 CeBIT VIP Dinner
Altitude Restaurant - Level 36 of the Shangri-La Hotel


Tuesday

10.35am - 10.55am Keynote: The Next Big Success
Mr Jason Calacanis,

11.45am - 12.10pm Panel Discussion: Ready for the World? Australia's R&D Infrastructure
Dr Alex Zelinsky (CSIRO); Dr David Skellern (NICTA); Dr Mark Anderson (DSTO); Mr Jason Calacanis;
Dr Karsten Schulz; Moderated by Ms Fran Kelly

--- Press Meetings ---

7pm - 11.30pm InnovationNation VIP Party
Invititation only


Wednesday

9am - 11am Open Breakfast
Botanica Brasserie at Sheraton on the Park

6pm Dinner at Iceberg

6pm - 11.30pm CeBIT ICT Celebration Dinner - State and Federal Ministers Gala dinnner and awards
Parkside Ballroom, Sydney Convention Center


Thursday

10.15am - 10.40am Keynote Presentation: Entrepreneurial Insanity
Jason Calacanis, CEO, Mahalo.com

--- Press Meetings ---

4pm - 5.30pm Session IV - Six Best Aussie Business 2.0 Startups
Panel - Jason Calacanis, Duncan Riley, Robert Beerworth, Mike Cannon-Brookes, Justin Davies

7pm Open Dinner for Entrepreneurs
Location: Ciel Rouge, Darlinghurst, http://www.innovationbay.com/Events








The "Official" Verdict on Powerset (or what would I do if i was the CEO).

Powerset has received a ton of attention--some say hype--about their "Google-killing" intelligence based search. Google-killing is in quotes there for a reason people: no one is killing Google any time soon, and in fact the best search and navigation companies--i believe--will learn to play in Google's pond. (note the "official" in the title is also a joke, but I'm sure some folks will miss it--the same folks who will miss me explicitly saying it's a joke here--thus is blogging: fire, ready, AIM!).

Anyway, this week Powerset finally, after close to two years of work, released their first product (which I really a demo truth be told): a site-based search engine for Wikipedia. Last year at the TechCrunch40, in September, they showed an earlier version of the product.

How does Powerset stack up?
  • When evaluated on the basis of a site-based search engine for Wikipedia it's fantastic because Wikipedia's native search sucks (like really sucks). Powerset is amazing for *site* search.
  • When evaluated as a search engine to compete with Google or Yahoo, however, Powerset's current offering is a failure. Indexing a couple of million pages of Wikipedia really doesn't do much for end users, and when you compare queries on Powerset head to head with Google or Yahoo it's embarrassing.
Of course, the point of this demo is *NOT* to compare PFW ("Powerset for Wikipedia") to Google or Yahoo today, but rather compare it to two things:
  1. the current search engine at Wikipedia (which is, again, a disaster)
  2. a site specific search on Google or Yahoo (by adding the operator site:wikipedia.org to any search you do on Powerset).
  3. a normal Google or Yahoo search (without the site:wikipedia.org operator).
Let's take a simple question, "who created the ipod," and run it against these three shall we? Now, there is a simple answer to this question, "Apple," which no one would have to search for. Let's assume this question means we want the name of the person, or people, who were responsible for making it.

In the Powerset search we get EPIC FAIL: The first result is for software made to work with the iPod, and the results below it are not helpful.



In the second scenario when we search Google with the site:wikipedia.org operator we get FAIL! Obviously looking for the question in a system filled with statements is not going work.


In example three below we see that a straight up Google result indexes another search engine--the one known as Yahoo Answers--which has the right answer mixed up inside their results. NOT FAIL! Of course, is this victory Google's or Yahoo Answers'? Most would agree it's Yahoo's because they have questions in their database, not keywords.



The most interesting point, for me however, is not Powerset's search feature, which has much to work out, but rather their navigation tool. IT NAILED IT! EPIC SUCCESS!!!


Clearly Powerset has some value, however it is not going to be as a front end for user search. Users do not want something this complex for 90% of their searching. For 90% of their searching they want something very, very simple like Google, Yahoo, Ask, etc.

Folks do NOT want to type a sentence into a box, rather they want to type one or two words into a box and get a huge payoff.

The problem, of course, is that in our business you need to not only make a neat piece of technology but you also have to build a brand and match, or exceed, users expectations. In it's current form Powerset is not going to do that.

If I was the CEO of Powerset I would do one of two things:

  1. Partner up with an existing search company and provide a secondary search option. For example, if you do a search and you come up with a result from Wikipedia you would give an extended abstract (say 2-3x the normal length). So, imagine if you searched on Yahoo or Google for the quesiton above and in the results you had the sentence:
    • As ordered by CEO Steve Jobs, Apple's hardware engineering chief Jon Rubinstein assembled a team of engineers to design the iPod, including hardware engineers Tony Fadell and Michael Dhuey, and design engineer Jonathan Ive.
  2. Become a business to business provider of search solutions. If Wikipedia won't pay for this kind of search, I'm sure the CIA, FBI, IBM, educational institutions, financial shops, etc. will.
Anyway, congratulations to the PowerSet team on burning the midnight oil for so long trying to make search better. As a company we're struggling with similar issues (i.e. the partial data problem: we only have 45,000 guide pages built), and the fact is that search is a huge problem that is not going to be solved by one company. Search is a problem that will take a couple of dozen PowerSet, Hakia, and Mahalo type companies.

I wish PowerSet a lot of luck and can't wait to see what happens when they index ten sites!

Challenge for the JasonNation: Pick your own question to ask PowerSet, Google, and Yahoo, then put your results in a similar fashion (i.e. with the screen shots) on your blog. JasonNation members who experiment with the results and do a post will get one of the sexy new Mahalo mugs (version 2.0).

Facebook lifts 5,000 friend limit.

Oh boy.... I guess I have to confirm the 1,000+ friends of mine in the queue! :-)

Systems Engineer, Los Angeles



We're doubling the size of our technical staff here in Los Angeles to keep up with the growth of Mahalo (see Compete chart comparing **US-only** visitors for Mahalo and two other search startups Hakia and Wikia).

We're looking for a really killer Systems Engineer here in Los Angeles to work at our very cool factory in Santa Monica where they will make their own hours (provided they at least make it in for the free staff lunch every day at noon :-), get whatever equipment they want, soak in stock options in the next big thing, and work with a team of totally kick-ass no BS developers who are KILLING it every day.

It's amazing job, really. Our tech team is lead by Mark Jeffrey, a seasoned 12+ year Internet vet who has been through a number of startups. Our current Iron Man Systems Engineer Dan is looking for a second Iron Man to help scale our service from four million uniques a month to 40 million. Yes, we're going big here at Mahalo. :-)

The basic job description Mark put together can be found below. If you help us find this person you will receive a glorious JCAL pack which includes:
  1. my total and complete love for all time
  2. a ticket the TechCrunch 50 conference and an invite to go to the *VIP* speaker dinner as my date
  3. a $1,000 Amazon or Apple gift card
Please send your deets to jason at mahalo.com and cc mark at mahalo.com with the subject line "I kick ass"

Rock on Jason
Systems Engineer, Los Angeles

Mahalo.com, Inc. is a new human-powered social search service backed by Sequoia Capital (the world's #1 venture firm), Newscorp, CBS, Elon Musk (Paypal founder), and others. This kind of opportunity is extremely rare in LA: these high-profile rewards are usually found only in Silicon Valley.

We're looking for a seasoned Systems Engineer. You should be expert in massively scalable architectures, how MySQL and Linux interact, how MySQL and memcache interact, sharding, replication (including multiple
master replication) and how to tune MySQL based on various schemas for maximum performance and availability. You are a HANDS ON implementor, a get-it-done kind of developer. The right person is a self starter
with the "general get it factor". You work well with a team of like-minded engineers, and have a genuine desire for excellence.

You should be expert with:
Applications: PHP 5.x, MySQL 5.x, memcache 1.2.x
Protocols: HTTP, HTTPS, Unicast and Multicast socket programming
Scripting languages: Unix shell scripting
Other languages: Applicants with C, Java, and Objective-C experience preferred
Bonus: Hadoop / HBase, Lucene, Nutch, Spread

Well rounded candidates such as release engineers with a background in both large corporate environments and small startups have an edge.

Sheyla Hershey

This page is on the way to becoming the most loaded page on Mahalo.... ever.

Sheyla Hershey has had eight breast enlargement surgeries, but is being limited by the state law in Texas which says implants are limited to 1,000 CCs. Once again, the Bush Administration destroying our society and standing in the world!




Help pick the next host of Mahalo Daily

Hey there, Tyler here with a fun little update on the search for the next host of Mahalo Daily.....

Today's episode was MD117 - The Bachelon, Episode 2 and tomorrow will reveal who will be the final group of lovely hosts who will each make their very own episode of Mahalo Daily for you all to judge on.

We started with the American Idol parody, now it's a fun twist on the Bachelon, any guess what fabulous reality game show we'll be spoofing on for the final round? Hint: We're saving the best for last.

In any case, we've decided to open up the voting on the web for the next round starting next week and let everyone out there have their pick in narrowing down the final round to help pick the winner.

If you haven't been following along already, here's each of the episodes leading up to today's....

Enjoy!


MD109 - Mahalo VLOG Idol, Episode 1

MD110 - Mahalo VLOG Idol, Episode 2

MD111 - Mahalo VLOG Idol, Episode 3

MD112 - Mahalo VLOG Idol, Episode 4

MD113 - Mahalo VLOG Idol Teaser 4

MD114 - Mahalo VLOG Idol, Episode 5

MD115 - Mahalo VLOG Idol, Episode 6

MD116 - The Bachelon, Episode 1

MD117 - The Bachelon, Episode 2

Marc Andreessen, Roelof Botha, and Marissa Mayer are back as judges for Techcrunch50



We're really excited to have three of our most popular judges back at TechCrunch50 this year: Marc Andreessen, Roelof Botha, and Marissa Mayer. Last year folks raved about their insightful, honest, and constructive feedback. This year we've grown from 40 companies to 50, and we've grown from two days to three.

The plan is to have six sessions with four judges on each, for a total of 24 judges over the three days. Mike, Heather and I are struggling over each decision. We're looking to rotate in some new judges, while bringing back some crowd favorites. It's really a hard process, but not as hard as selecting the 50.

If you have ideas for judges or if you know companies that are launching a new product in the fall please do let me know!

More on our judges:

Marc Andreessen

Marc Andreessen is the co-founder of Ning, the create-your-own social network platform company that has raised over $100 million in funding. He also serves on the board of Open Media Network. Marc is best known as a co-founder and chief technical mind behind Netscape Communications Corporation and co-author of Mosaic, the first widely- used web browser. Crunchbase profile.

Roelof Botha

Roelof Botha is a partner at Sequoia Capital focused on services and software investments. Prior to joining Sequoia Capital in 2003, Roelof served as the Chief Financial Officer of PayPal (EBAY) and worked as a management consultant with McKinsey & Company. Roelof is a certified actuary (Fellow of the Faculty of Actuaries), has a BS in Actuarial Science, Economics, and Statistics from the University of Cape Town and an MBA from the Stanford Graduate School of Business.

Marissa Mayer

Marissa Mayer is VP, Search Products & User Experience at Google. She joined Google in 1999 as Google's first female engineer. Her efforts have included designing and developing Google's search interface, internationalizing the site to 100+ languages and launching numerous features and products. Several patents have been filed on her work in artificial intelligence and interface design. Before Google, she worked at UBS research lab (Ubilab) and SRI International. Marissa has been featured in various publications, including Newsweek ("10 Tech Leaders of the Future"), Red Herring ("15 Women to Watch"), Business 2.0, BusinessWeek, Fortune and Fast Company.



Special thanks to our amazing sponsors!!


RIP Jimmy

Just found out my Godfather who I haven't seen for six or seven years died. Was told he was suffering from depression after losing his job at the race track and went back to the bottle. He drank himself to death over a couple of a days in his condo in Florida. A bottle of vodka a day was the prescription.

He was the picture of health before that, and for a man in his 60s he looked like he was in his 40s on a good day. He always had a kind word, and after 9/11 he saved up some money to make a trip to "the pit." He was so moved by the events of that day he felt like he needed to see it out of respect he told me.

We were never close, but we had a bond. I still remember him carrying me on his shoulders when I was a kid--doesn't get stronger than that. He left for Florida as many folks from Brooklyn do when they get a taste of the real sun. The grind, gray, and the cold of New York City can get to you once you've tasted the green and blue of Florida--or California for that matter. We were similar in that way I guess.

My mom told me he that Jimmy gave up after losing his job and the condo payments mounted. He tried to sell the Florida condo, but the real estate market down there went bad just as quick as it went good. You hear about the victims of the real estate bust in the Wall Street Journal all the time, but it's odd when it's someone you know. "Just move out and get a smaller place" is common refrain from the pundits on the cable news business channel. However, a man losing his home is left with a hole in their pride, and that hole can suck you in.

For Jimmy losing the place and the job started the spiral. He got back on the sauce, which he was off for decades, and he told his girlfriend "I'm too old to start over." He was in his 60s and had 20 great years left. The sadness and depression took the twenty.

RIP Jimmy, I'll see you at the track on the other side--we'll have a club soda.

All the lonely people.
Where do they all come from?
All the lonely people.
Where do they all belong?

Next Page >

Toro, a bulldog

Hello. My name is Jason.
I'm the CEO of Mahalo.com, a human powered search engine. I was previously the co-founder of Weblogs, Inc. with Brian Alvey, and the GM of Netscape.

I'm currently on the board of social shopping site ThisNext. You might remember me from my days as editor and CEO of the Silicon Alley Reporter magazine.

Mike Arrington and I partnered on the TechCrunch40 event in September. We're going to do it again next year.

This is my blog, this is where I live. You should also listen to my podcast.


Add me on Facebook, Twitter, MySpace, LinkedIn, Delicious, Pownce
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