Google CEO extols $800 billion advertising opportunity

Google CEO extols $800 billion advertising opportunity

Summary: Google CEO Eric Schhmidt extols $800 billion global advertising market.

TOPICS: Google

 UPDATE: YouTube: What Google CEO Eric Schmidt really thinks


Google CEO Eric Schmidt reinforced his profound belief in a “new,” Google-centric paradigm, ‘cloud computing and advertising go hand-in-hand’, speaking at the Morgan Stanley Technology Conference in San Francisco this afternoon. 

Schmidt’s high-level Google vision expressed today mirrored his commentary at the Search Engine Strategies conference last August, where I personally heard him extol that “the two, cloud computing and advertising, go hand-in-hand.”: 

There is a new business model that’s funding all of the software innovation to allow people to have platform choice, client choice, data architectures that are interesting, solutions that are new – and that’s being driven by advertising.

Schmidt views Google as spearheading universal business model transitioning to the “new paradigm.” 

I heard Schmidt tell the audience of analysts today that “cloud computing,” “targeted advertising” and “search” represent new monetization trends that serve as “metaphors for investing opportunities.”

Schmidt on cloud computing: Why would a rational person put personal information anywhere else but the (Google) cloud, given risks of losing and/or damaging a mobile device or PC? 

Schmidt on targeted advertising: Very targeted ads are very valuable. With highly targetable devices and highly targeted ads, fewer ads may be necessary to make even more money. Out of the current $600-$800 billion global advertising market, close to 95% is untargeted. Even a small improvement in targeting could have a very large impact on revenues. 

Schmidt on search: The rate of production of new media is compounding and search answers all the consumer problems in information, health and entertainment. 

What does the “new paradigm” mean on a tactical level for Google and prospective Google partners? 

Schmidt used YouTube as an example of how Google is helping others “business model transition” to benefit from the “new paradigm” that he extolled and Google enables.

Just as search answers consumers’ problems, YouTube and Google Video answers fan’s needs, according to Schmidt. 

Google’s stance to video content owners: “We will work with you to help you get to the new model.” Schmidt indicated that “after the initial conversation,” content owners are generally on board with the new, “iconic” Google model. 

What is the model that is being transitioned to exactly? Schmidt said that the new Internet video content model is monetized on a “per view” basis. What is the method of monetization? Schmidt said that is still “unclear.” 

For Schmidt, the YouTube and Google Video priority is to first get “as much licensed content as possible” and then to develop monetization and advertising formulas around it. 

Google’s notion of video content licensing, as conveyed by Schmidt, apparently does not necessarily involve licensing fees, monetization commitments and/or guarantees. 

Schmidt underscored the Google position that the YouTuber fan base is “very valuable” to content owners from promotional perspectives. 

Nevertheless, Schmidt put forth “monetization” of video content is a “big project” for us this year.

UPDATE: YouTube: What Google CEO Eric Schmidt really thinks

ALSO: Google warns of Microsoft, Yahoo competition and Google Search: Is PageRank reliable?

Topic: Google

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  • Cloud computing and Slowness go hand and hand

    ?iPhone is not an iPod?
    Google's mobile Ads mostly depend on iPhone's success. I don't think it can easily get success due to various factors like battery life, cost, 2 yrs contract etc. and it would be slow adoption.

    ?YouTube life long battle?
    As for as the youtube is concerned, it?s unreliable, it has to face copyright issues life long. Secondly, youtube is a challenging product for media companies, I guess Google has hard time to monetize on this.

    ?Google office has to proof lot?
    Google Aps also hard to adopted by Enterprises, Companies who already have MS platform would give much preference to Office live. Google has to strengthen their office product quality and has to purchase few more.

    ?wait and see Ad models?
    Google may follow New Ad model & technology such as widgets, per view, embedding Ads in media content, etc.

    ?Demand for transparency?
    Adding Ad pitch in each and every byte of others data and hosting in Google cloud means, everyone would expect at least 50% transparency from Google.

    Hence, I think Google cloud will be very slow adoption.

    Kind rgrds
  • Hit again

    My opininion, there's lot's of moneey and plan a win to win is quite easy ...

    Informations like videos, sounds need to be shared.

    Google already buy youtube, the only think they need is a the a real support from the music/film industry.

    Where they can be really paid for their services.

    Myspace already host lot's of artists, but I hate them ... Don't ask why ;)
    Alexandre Jaquet
  • Re:Hit again
    johny boy