November 16, 2012

Facebook is Not So Quietly Ramping Up a Major Ad Product


You hang around the tech headlines long enough on any given day and you will always come up with something that may or may not have truth to it, but that otherwise might generate an extra page view or two (possibly with six zeroes following the one or the two if done right). More often than not – by a hugely and unseemly amount sometimes – the headlines simply cheat and create the illusion of something interesting.

Take this quote (and picture along with it the requisite head shot of Yahoo CEO Marissa Meyer) from a certain tech news website that appeared today from an unnamed Yahoo insider about Facebook: "There's a story brewing about a next very big business it's building – one that competes with one of Yahoo's flagship ad products and would kill us." The website goes on to note the following: It's the result of a partnership with an upstart Nielsen competitor out of Denver called Datalogix. Facebook has been ramping it up over the past several weeks.

“It” is the supposedly next big thing Facebook is cooking up that may – or may not – kill off Yahoo.

There is an excellent perspective on the entire Datalogix-Facebook relationship, which first became common knowledge back in September 2012, which is provided by the Electronic Frontier Foundation that is well worth reading. In any case, there is no particular secret behind Facebook and Datalogix – Facebook acknowledges the relationship and also points out similar work it does with Nielson and comScore.

The Yahoo source also goes on to say that this new Facebook product "closes the loop" on brand advertising in a way that no site besides Facebook is able. And finally, the source notes that Facebook has, as a part of its massive deal with Datalogix, secured the right to be notified should any suitors come by, looking to acquire.

Well, that last line is certainly interesting, though of course there is absolutely no way to confirm it. Considering how Facebook went about acquiring Instagram, the question emerges – why wait for any such thing to happen? Offer up the billion dollars to Datalogix and be done with it.

Not surprisingly, the website notes in closing that Facebook declined to comment on the story. Duh!

Facebook’s struggle to monetize the mobile side of its business is well documented and well known. During its most recent earnings call CEO Mark Zuckerberg did strike us as being far more upbeat about where Facebook is headed on this, and suggested that the mobile monetization of Facebook is non-trivial and hard to pull off immediately. Zuckerberg means: be patient, its coming. Certainly Marc Andreeson seems to think there is something in it since his VC firm is holding on to most of its Facebook shares (a smart thing to do we might add).

In any case, all of this is the usual much ado about nothing. What we believe is highly likely to be something much more than nothing on the Facebook ad front we’ve already covered previously. We’ll stick with that for now as being real enough. Is it something that will knock Yahoo out? No. The only thing that will do that is if Marissa Meyer proves to be nothing more than a flash in the pan (which is certainly a possibility, though we surely doubt that is how it will turn out).

Enough said.




Edited by Brooke Neuman



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