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Gaming the Adsense Game
Published October 8th, 2008 in Daily News, Internet, Technology and Telecoms. 0 CommentsIf you develop or publish web-based games you can become a beta user of AdSense for Games, by displaying video ads, image ads, or text ads within your online games to earn revenue. You’ll be able to show these ads in placements you define.
Google will sell in-game ad placements directly to top brand advertisers as contextually targeted text and image ads based on content and demographic information.
Adsense for Games: The history
AdSense comes to online games and ultimately will dominate the game-related advertising business although many expected this for the last year, since November 2007. Google first started talking about AdSense for Games at industry events last summer. Throughout last year it was reported that Google acquired an in-game ad provider called AdScape in a moved that was described as Google’s attempt to “cram as many ads into the world as possible.”
Google game partners
Google has partnered with Konami, Playfish, Zynga and Demand Media and advertisers are Esurance, Sprint and Sony Pictures.
Google Adsense Estimates
Google, using comScore estimates, in a press release said that every week, over 25% of Internet users worldwide play online games, which amounts to over 200 million people. This number is growing at a rate of almost 17% each year. Given the partners and the reach of Google, this will become a major profit center for Google and a game changer for monetizing online games.
Making money from ads while gaming: The Technology
At online games most of the monetization is done through one the side bars, away from where most people are focusing their attention. That explains the low ad conversion rates on gaming sites.
The new AdSense units look more or less the same, but they show up in game instead of off to the side. Because the user is already acclimated to bells, whistles, lasers and other noisy what-not, the video ads are allowed to auto play. This turns the gaming experience into something a little closer to television viewing. The ads are likely going to have lower conversion rates than standard AdSense units on a content site because of folks not wanting to leave the experience, but will probably function quite effectively as a sort of brand impression unit, similar to how standard TV works (of course with the added benefit of being clickable).
yahoo financial news
Yahoo! ad revolution is the most important new from a financial aspect in the internet sector for today.
Yahoo upgraded its online advertising system today with extra help from its newspaper partners in an effort to survive in a very competitive market. Yahoo Chief Executive Jerry Yang introduced the new advertising platform for publishers claiming that this is a “game-changer” that can help Yahoo! speed up its revenue growth.
Yahoo! this year rejected a buyout offer from Microsoft and has lost market share to Google and MySpace. The plan is to sell this technology to a few hundred newspapers by the end of the year and then to media publishers and advertising agencies as a self managed system.
Many financial analysts were cautious to the news as they don’t believe that Yahoo! will see any cash benefits or market share increase based on just that. The Newspaper Consortium, the Yahoo! partner on this project believes that they will be able to manage more advertising and increase their profits from that.
Yahoo! might announce an agreement to display search ads from Google.
Yahoo! has been pursuing a broad agreement to carry search ads from Google, which it views as a way to boost its cash flow and bolster its claim to shareholders that it is worth more than Microsoft has offered. Such an agreement could still go forward even if Microsoft announced a hostile takeover effort.
While a broad search-ad pact would likely attract intense antitrust scrutiny, the options Google and Yahoo are discussing include a nonexclusive arrangement that they believe could satisfy regulators, say the people familiar with the matter.
The basis of such an arrangement would be a real-time auction system that would choose the most lucrative ads for any given consumer query from among those sold by Yahoo, Google and any of their competitors, the people say.
Such a system would be designed to allay concerns among regulators that Yahoo’s relying on Google Adwords would be anticompetitive.
Yahoo reported that the recent two-week limited test of carrying Google Adwords was successful, but provided no further details. Fully outsourcing search advertising to Google could increase Yahoo’s cash flow by more than $1 billion a year, according to Citigroup Global Markets analyst Mark Mahaney. The reason is that Google’s system generates significantly more revenue for each search query than Yahoo’s does.
There has been debate at Google about the wisdom of such an arrangement. Some top Google executives have pushed for a Yahoo ads deal as a way to strengthen Yahoo’s hand in the face of its pursuit by Microsoft, Google’s biggest rival, according to people familiar with the matter. But others at Google have questioned the strategy, fearing the potential for negative fallout for its business and consumer image from any regulatory scrutiny of such an arrangement, the people say.
Recent comments by Yahoo executives suggest that it would continue to sell some search advertising on its own, even if it were to carry ads from Google.
Second Life profitable?
Linden Lab is a privatelly held company and this makes it difficult to answer if they succeeded to make Second Life profitable yet. We explored in the past the Second Life economics but it’s time to have an update on Linden Lab and Second Life 2008 financial situation.
Linden Lab original funding
Linden Lab is almost 10 years old, being funded in 1999 by Philip Rosedale. Second Life opened to the public in 2003. It had 4 rounds of funding with the most recent one being $19m USD in March 2006, while the current syndicate consists of 6 investors. Linden Lab has Amazon.com’s founder and CEO, Jeff Bezos, as a secondround investor.
Second Life Issues
ginko financial – Second Life’s best-known bank Ginko has received so much press lately, the bank, as well as others, will inevitably become an issue that Linden Lab will have to tackle. That either means self-regulation or more federal intervention.
In the virtual world as much as the real one, the past months have been filled with bleak economic news. Following a federal investigation, Second Life’s parent company, Linden Lab, banned all gambling in the virtual world–a major source of its business. A month later, the collapse of an in-world bank led to a crackdown on all of Second Life’s unregulated financial institutions. Most worryingly, Linden Lab’s sales of Linden Dollars–the world’s currency–trickled off during the second half of 2007, and in February 2008 still stood just below where it did the same time a year before, about $720,000 a month, compared with $800,000 in February 2007.
Employees are leaving, too. Last December, Linden Lab’ chief technology officer and one of its first hires, Cory Ondrejka, walked away from the company. So when Philip Rosedale, the company’s chief executive, announced in mid-March that he’d also be stepping down, a Second Lifer could be forgiven for thinking it was time to pack up and move on.
Not long ago all the world wanted in on virtual worlds – particularly the industry leader Second Life. Firms were piling in to the 3-D universe, setting up stores, opening hotels and offering “free” cars to promote brands. Now, not so much. In reality, Second Life doesn’t work. As the firm itself admits, the system crashes constantly and the steep learning curve for anyone entering Second Life puts off all but the hardcore.
Linden Lab Profitable
Have the 250 Linden Lab employees managed to make Second Life profitable? Well, yes! Linden Labs managed to make Second Life profitable in 2008, something that couldn’t be predicted even in 2006.
We saw a bubble in early 2007. Part of it was an enormous amount of media: We’d routinely have hundreds articles written about us around the world every day.
People were trying to do things that aren’t yet possible in a virtual world, and one was marketing products. In Second Life, it’s not usually possible to pull together a very significant body of eyeballs in any one place.
the number of unique users and the size of the economy continue to grow by between 5% and 10% a month.
Linden Lab future?
The next step for Linden Lab is rather obvious. The venture capitals that supported the business all this years are probably looking for an exit strategy and the change of CEO is a good indication of the intention to take Linden Lab public. The Financial Times agree as well. The paper reported that Linden Lab “is moving closer towards a listing and life as a public company with the replacement of its founder with a new chief executive.” . During an interview, Philip Rosedale said that while there was ”no particular rush” to go for an IPO in the next year, he cited Bill Gurley, venture capitalist and board member, as saying the company would be able to go public on its current financial numbers
The founder denies this.
Virtual Worlds future
Cockrill and Morrison are working with the University of Wales on a 3-D world that will mirror the real one and, they believe, offer scope for distance learning, virtual meetings and other services that could bring a fourth dimension to the internet – touch.
They seem to be on to something. Companies are increasingly turning to virtual worlds not just for brand building, but also to hold meetings and train staff.
Rosedale is stepping down as chief executive of Linden Labs. Competition for Second Life is increasing as media and tech firm rivals build more structured 3-D worlds – so a new chief will have to get more people past those 8ft trannies. If he doesn’t, somebody else will.
Disney CEO Bob Iger is predicting that the company will see $1 billion in online revenue from Virtual worlds this coming year, up from a predicted $700 million for fiscal 2007. The sources include ads, downloads and subscriptions to online games and e-commerce that’s unrelated to the physical parks. Disney has a host of virtual worlds and online games supported by advertising or subscriptions, and it’s looking for more, while Hasbro, considers a site as non revenue generating if it only drives the purchase of toys.
Executive Management
Philip Rosedale | Founder and CEO
Robin Harper | VP Marketing & Community Development
Joe Miller | VP Platform & Technology Development
Marty Roberts | General Counsel
Cyn Skyberg | VP Customer Relations
Ginsu Yoon | VP Business Affairs
John Zdanowski | Chief Financial Officer
Board of Directors
Mitch Kapor | Kapor Enterprises, Inc.
Jed Smith | Managing Partner, Catamount Ventures
Bill Gurley | Partner, Benchmark Capital
James Currier | Founder and President, Tickle, Inc.
Investors of Note:
* Venture Capital: Benchmark Capital; Globespan Capital Partners; Catamount Ventrues
* Individuals: Jeff Bezos; Mitch Kapor
* Corporate: Omidyar Network
* Known Other Equity Holders: Rosedale Phillip, Harper Robin, Miller Joe, Zdanowski John, Yoon Ginsu, Ondrejka Cory, Fleck David, Currier James, Jacobsen Bruce, Yi Gideon, Smith Jed, Laskey Mitch, Lanier Jaron, Traeger Don, Gurley Bill