Week of October 22, 2007

More On Facebook's $$$

Friday, October 26, 2007

We mentioned yesterday that Microsoft invested $250 million in Facebook. Now comes word that two hedge funds also invested in the company to the tune of an additional $500 million. That gives Facebook a war chest of $750 million. The company is in an envious position: It is still privately held, the three capital investments amount to a small percentage of ownership for the company, and it now has the funds to finance out its future for years to come.

What's A Net Worth?

Thursday, October 25, 2007

In July of 2005, News Corp. won a battle with other media giants to purchase MySpace for the record sum of $580 million. Now, less than 2 1/2 years later, Microsoft is paying $240 million for a stake in Facebook. The kicker, that stake is only 1.1% of the company. Also, as part of the deal, Microsoft will get to sell advertising outside of the US. Earlier, Microsoft had a cut a deal to sell the ads in the US through 2011.

Facebook has a little over 40 million users today, while MySpace has about 110 million. Doing the math on this deal, that means the value of a major social network has increased by roughly 9000% in just 27 months.

Ratings Discrepanices

Wednesday, October 24, 2007

"They're undercounting upscale customers," "Students and minorities are underrepresented in the sample." These are a few of the complaints being used about the ratings system. But they're not talking about radio and TV numbers, but rather website visitors. Those who thought that the Internet means exact counts for advertisers have been in for a nasty surprise. The problem is that the numbers from the 2 main ratings services, ComScore and Neilsen/NetRatings, don't agree with one another or with the raw web server numbers.

ComScore and Neilsen/NetRatings use panels of Internet servers to count web visitors, just as broadcast ratings systems use panels of viewers/listeners. Websites have their numbers, raw data obtained from their servers. But there are problems with those numbers, too, including the fact that servers over count users who delete cookies and often include international visitors.

The bottom line is that online advertising has surpassed radio in the US. Radio advertising is expected to be $20 billion this year, while online ad spending will top $22 billion. With that kind of money at stake, agencies and advertisers are expecting an accurate count.

Coalition of Media Companies Establish Online Video Standards

Tuesday, October 23, 2007

A group of the largest media and Internet companies have gotten together to establish rules for copyrighted video on the Internet. This coalition has agreed that user-generated web sites that feature video must use filtering technology to block copyrighted video from being posted online without permission.

Notably absent from this group is Google, which announced its own filtering system last week for YouTube. The difference is that while the coalition wants copyrighted material filtered before it's posted, the YouTube/Google technology will filter it afterwards.

Facebook Behavioral Advertising Is Here, And You Can Try It Now

Monday, October 22, 2007

Over the past few months, we've written quite a bit about Facebook's efforts at moving into behavioral advertising. We also mentioned how to use Facebook's own products for some highly targeted and inexpensive advertising. Now comes the combination of the two as Facebook has integrated "interests" into their "Facebook Flyers" ad and poll program.

One of the great things about the service is that Facebook shows you how many people will potentially see the ad among Facebook members. This provides an extraordinary way to target an audience. For example, I created an ad that targeted 18-34 year old men in a top five market who like Metallica, Nickelback, or Pearl Jam. You could pick any montage of artists you want, but those three resulted in 2,920 men in my test city between the ages of 18-34 and who LOVE those three bands. Add more bands, and you'd get more results.

While 2,920 isn't a lot of people, these people are highly qualified for your station, and the cost would be cheap for the ad. By adding more keywords of appropriate bands, you could come up with a much higher number of potential ad viewers.