The most interesting part (for me) of an interview with Mahesh Murthy on MicroHoo day was about ads on Facebook in particular and social networks in general. From the (rough) transcript of the interview is Mahesh's response to my question on whether the page view economics of Web 2.0 will scale infinitely:
"I really do not think so. Facebook is the kind of environment, which is very immersive for the viewer. The viewer does not want to click on an ad and get away somewhere else. In Google, as a search engine, you have to go and click on an ad and leave the website. So, as a result the predominant paradigm in the business is click on the ad and get away from the site.
We have run lots of ads in Facebook for a dozen of clients. We find that they work on a branding level. They give you impressions and eyeballs. But you don’t get those clicks through rates. You get that by doing the regular contextual advertising on Google."
This observation from basically the head of India's biggest search marketing firm, seems totally in line with these observations (published a day prior to the interview). Money quote: "Fuck, this is a pyramid scheme. There is no money input into this system except venture capital. I remember a time, long long ago, when tech companies spent their own venture capital on each other, so revenues were all booked from the same small pool of money. Yeah, as I recall, it didn't end well."
But before you start humming to the brilliant Bu-bu-bu, Bu-bu, Bubble video below, do read this rather spirited defence from SuperCIO.
[youtube dr3qPRAAnOg]
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