Social networks: advertising euphoria cools down

 In recent months, social networks have been seen as the big future cash cows when it comes to online advertising. Now it seems that they are backtracking: According to the Frankfurter Allgemeine Zeitung, Microsoft advertising strategist Yusuf Mehdi has not yet found an advertising strategy for Facebook that works. The software company has held a stake in Facebook since last year. However, it remains to be seen whether the deal has paid off: "Perhaps Facebook will never be the big revenue generator," said Mehdi. Google also seems to have become disillusioned with its stake in Myspace: "Myspace is not making us as much money as we thought," Google CEO Eric Schmidt told the FAZ. Two years ago, the search engine giant paid 900 million dollars to be allowed to market advertising on the social network. Google also has a stake in YouTube. According to Schmidt, it is more difficult than expected to get the advertising networks on Myspace & Co. up and running. "People who are on their social network are not thinking about buying a washing machine," said Schmidt. Advertising needs to be optimized and be more entertaining, interesting and engaging than what is available today.
The user figures continue to give cause for hope: According to Cash Daily, Facebook has 70 million members worldwide, while Myspace has over 100 million. In comparison, turnover is still modest: Facebook is expected to generate around 350 million dollars this year. According to estimates, Myspace will turn over around 900 million dollars.