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).

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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.

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Online-video company Revver Inc., has been sold to online-entertainment network LiveUniverse for less than $5 million. Revver was one of the first video-sharing sites to tout the fact that it shared ad revenue with video creators. Revver does that by attaching advertising to user-submitted video clips. All ad revenue 50/50 with the creators.

While terms of the acquisition were not disclosed, it was reported earlier this month that the struggling Revver — which had seen the departure of all of its founders, and its staff cut in half — was asking for only $300,000 to $500,000, plus the assumption of about $1 million in debt. Talks had stalled last month over the issue of debt.

The sale is a blow to Revver’s investors, who had sunk $12.7 million into the Los Angeles company. The deal demonstrates the difficulty many online-video start-ups are having competing with Google Inc.’s YouTube.

Revver officials and some of its investors, including Draper Fisher Jurvetson and Bessemer Venture Partners, declined to comment or didn’t respond to requests for comment. LiveUniverse, led by former Intermix Media Inc. Chief Executive Brad Greenspan, who helped start MySpace.com, didn’t return a message seeking comment.

Revver’s Investment History

Revver was founded by Steven Starr, Ian Clarke, and Oliver Luckett in 2004, and is currently based in Los Angeles. The company has raised a total of around $12.7 million in venture capital from Comcast, Turner, Draper Fisher Jurvetson, Bessemer Venture Partners, Draper Richards and William Randolph Hearst III.

Since 2002, venture capitalists have poured more than $282 million into at least 27 video-sharing Web sites, according to VentureSource, a research firm owned by Dow Jones & Co., which publishes this newspaper. Some of the most prominent include Revver, Metacafe Inc. and Veoh Networks Inc.

Revver’s Business Model

The company has tried to pioneer a new business model — aimed at more professional video creators, in addition to amateur artists — through which content creators and distributors share revenue with Revver every time a video is downloaded. The company has technology that can track a video’s movement across the Internet.

The company, offered to share advertising revenue with makers of the most popular clips. The thinking at the company was that if Revver could win over the best creators, audiences would follow. That’s not what happened. Revver has yet to draw an audience big enough to make it one of the leading video-sharing sites. What it has done well is attract a small but talented group of video producers.

Negotiotions for Revver

Negotiations with LiveUinverse began to pick up again after a story about Revver’s troubles appeared. That triggered, according to the employee, a flurry of inquiries from other companies. Among those who called was VideoJug, an online video destination and production company.

Doug Kamin, senior vice president of marketing at VideoJug, said that he contacted executives about the possibility of making a bid after reading about Revver’s woes.

“At those prices, we thought Revver would be a good deal,” Kamin said. “I’m betting lots of others thought the same thing.”

Shortly after that, Revver called Kamin to tell him that Revver’s management had decided to go with the “original bidder.”

For a year, the company had weathered management shake-ups that included the departures of all three founders. Employees had witnessed some of the Web’s best-known video producers, such as Ze Frank and Lonelygirl15, abandon the site. Revver’s audience was dwarfed by YouTube’s and other video-sharing front-runners.

More recently, rumors circulated the Web that the company was running short of cash, according to the Revver employees.

Revver’s Future

Revver is expected to operate independently as part of LiveUniverse, with about 25 employees, one person familiar with the deal said. Revver was nominated for a technical Emmy award in 2006 and gained some notoriety for running a quirky video that showed people creating geysers by dropping Mentos candy into soda bottles.

Revver’s Competition

“YouTube is by far the gorilla” in the market. No online-video start-up has managed to attract the number of viewers and amass the content YouTube has. YouTube, which was bought by Google for $1.65 billion in 2006, quickly became a cultural touchstone for its easy-to-use site, which lets people upload videos. In December 2007, YouTube hosted 2.6 billion total video streams, more than seven times the number hosted by the second-biggest video site, run by Yahoo Inc., according to Nielsen Online. The only start-up to make Nielsen’s top-ten list was Veoh, which hosted nearly 58 million. Many advertisers have also balked at running ads on online-video sites for fear of being associated with offensive content.

About LiveUniverse

LiveUniverse was launched by former MySpace parent company Intermix Media’s founder Brad Greenspan. Purchaser LiveUniverse operates multiple sites, including video-sharing service LiveVideo, which about a year ago instigated a scandal on YouTube when it reportedly paid top YouTube users to come to its platform. LiveUniverse founder Brad Greenspan, who was involved with MySpace early on, is perhaps best known for his lawsuits protesting the company’s sale to News Corp.

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• Ease of use
• Robust interface
• Ability to target ads by state and locality
• Improvements on removing several legacy quirks

Yahoo! had to revise it’s ad system so that it could compete better against market leader Google and it spent two years developing the new platform. Still, Yahoo! does not expect the new system to have any impact on financials at least for a few more months. Yahoo! shares went up after these news reached the market, despite the internal management problems, outlined in the “Peanut Butter Manifesto” memo, that leaked earlier this week.

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