Comment by ashishgandhi | Hacker News Reader

Comment by ashishgandhi | Hacker News Reader

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Yes, people spend a lot of time on FB but how much of it converts to revenue? Google could be converting visitors to revenue faster than what FB could be. Say, I search for a .is domain registrar, I click on the ad which seems to be selling it the cheapest and I leave Google. My short visit was converted to revenue and converted quick. On the other hand, I go to FB not to look for anything specific but only checkout what other people are sharing or share something myself. I think the way I use FB, since I'm not looking for anything specific, I have a lesser inclination towards clicking on a link which is trying to sell me something. Google could show me links to stuff I was looking for making it more likely for me to click on them. (Yes, there are gamers who buy credit but I'm not one of them and not suitable to comment there. But from what I remember, it's not a significant share of FB revenue - but I may remember very old stuff and I would be wrong today.)

What you explained is a very well known problem in marketing and advertising. It's not enough to be the "thing" the customer is looking for, you have to be there at the time they want to purchase. That is Google's greatest advantage: when you're looking to purchase something, you turn to search, not to social.

I see a couple of things happening though:

* Not all purchases are customer initiated, and based on the time users are spending on Facebook, they're in a much better position to capitalize on impulse and casual purchases.

* I've seen an increase in the number of friends who post "Hey, what phone should I get" and similar questions. This social behavior was commonplace prior to the advent of relevant, usable search. We may see a return to this leveraging of social knowledge for important purchases. Facebook has a significant advantage there.

Even with virtually zero effort, Facebook is going to begin to eat in to Google's territory, simply as a result of the sheer volume of eyes on ads. Right now, Facebook is continuing to focus on engaging users. They're digging deep roots in to our lives, and appear to be focusing on partnerships that aren't ad-related right now. These partnerships are also in markets that are inherently social. Music, for example, is a very social product. It makes perfect sense for Facebook to form strong partnerships there.

It's difficult to say when (or if) Facebook will focus on general advertising as a revenue stream. They certainly have a product, but I don't know how effective it is. I've seen a fair number of anecdotal write-ups that suggest it doesn't work all that well, but for individuals with a rational, causal mindset, advertising frequently "does not compute", so it's hard to say if there isn't significant bias there.

The graph that would be more interesting is a graph of ad sales. Google and Facebook are both fighting for the same marketing budget dollars.

Sort of. Google ads tend to be conversion-oriented and facebook ads tend to be branding-oriented. PPC vs CPM.

100% agreed. also fb has so many hits, they´re selling their ads for quite little money. the average amount of hits to get 1$ revenue would be more interesting

It's true that FB hasn't found a way to convert the time spent on it to revenue the way google has, but facebook will still make a lot of money selling targeted display ads in the short term. They'll do this while stealing market share from content companies like Yahoo, AOL, etc.

The money from display ads will give facebook a lot of money and time to come up with a better way to market using the social data they have.

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