Doc Searls says this in a blog post about some Flickr user losing all her pics:
Regardless of whether or not you think the online advertising business is a bubble
He does say he’s a voice in the wilderness, but my issue is that he says it so easily as to make it sound like others have voiced similar concerns. A bubble in early stage tech valuations is one thing but let’s not conflate that with the notion of an online ad bubble.
An early stage tech bubble implies high valuations on early stage companies. Surprisingly big VC rounds, lots of strategic acquisitions, eye opening IPOs, ridiculous share prices on SecondMarket.
On the other hand, an ad bubble implies that ad rates– CPCs and CPMs, are higher than they should be and will implode. That’s not what the popular media blogs are talking about. In fact, they are saying the problem is that online ad CPMs are too low for the industry.
Reading through the rest of the post, it’s clear that Doc’s fallen behind on the online ad industry so I’ll wrap the rest of this up in a few bullets:
- Facebook shares are valued in a completely different way than Google shares. Analysts have enough ad revenue data to build models for Google but not for Facebook
- Wall Street is not upbeat at all about Yahoo. In fact, the last time I checked, the stock was valued for only the cash and Asian properties
- Paid content and services has it’s place online but it’ll take a lot for it to become bigger than ad-supported content. I’ll bet everything on online advertising growth over paid content growth
- If you have enough experience trying to coax users to take an online action, you know how hard that is (users are lazy!). Good luck getting those people to self host anything.
To reiterate– let’s not conflate an early stage bubble for an online advertising bubble. Tech blogs are complaining about high startup valuations not high CPM rates. Heh, I’m sure a lot of us right now would love to see bubble-like ad rates in this medium.