Monday, January 22, 2007

Algorithmic Musings: Advertising Challenge or Strategic Mergers

Google (NASDAQ:GOOG), Yahoo (NASDAQ:YHOO) and Microsoft (NASDAQ:MSFT) continue to strategize it out in the text search field. Yahoo and Microsoft are protecting notable franchises in the financial and investment worlds. Google still covets the space and is expected to become increasingly important. Real time securities pricing, close to being implemented, should dramatically increase viewer-ship.

Text ads promise a laser focus so as to eliminate unnecessary expenditure. The entire process is supposedly algorithmically controlled. The entire process misses the subtle and intuitive channels that frequently leads to a consumers pocket book.

Watch for algorithmic add ons. Google, Yahoo and Microsoft all want to make money. As certain markets mature and even shrink somewhat the natural imperative is to search out new territory. The new value proposition will connect investor eyeballs to selected lifestyle offerings. Investors should have money so why not offer them cars, travel, high end high margin consumer goods. (The travel leisure gambling stretch will be interesting to observe).

Imagine today’s hot stock also serving text ads for its products and services. Imagine troubled marketing campaigns testing and market researching their way out of a troubled business plan.

The critical construct of business is that your customer must have money to buy your product or service. Mere interest is difficult to monetize. Individuals who spend time on investment sites fit the profile. The challenge will be to convert portions of the savings ethic to spend-able dollars.

The competitive statures contrast sharply. Google is considered to be the text ad leader. Yahoo and Microsoft have strong offerings in the investment space. The question may become who will make strategic alliances with Dow Jones (NYSE:DJ), Reuters (NASDAQ:RTRSY), Bloomberg et al. and establish the dominance. Or more to the point who will make a huge take-over offer and attempt to buy the dominance. Look at who is already making alliances with traditional print media.

Post Script
I am also prepared to argue that independent financial blogs also are incredibly valuable.