Yesterday’s NY Times has a very interesting article about MySpace’s attempt to expand its advertising business. The problem: MySpace serves more pages than anyone but Yahoo! but only has 1/20th of Yahoo’s revenue, and no one knows how to target enough ads to all those diverse pages.
The most intriguing bit describes how MySpace is starting to think of advertisers as members: “The bigger opportunity, however, is not so much selling banner ads, but finding ways to integrate advertisers into the site’s web of relationships. Wendy’s Old Fashioned Hamburgers, for example, created a profile for the animated square hamburger character from its television campaign. About 100,000 people signed up to be “friends” with the square.”
This new model of social-network advertising could be as disruptive and powerful as Overture’s introduction of relevancy-based search advertising, which was then exploited by Google to turn the industry on its head. The exploration of new business models for Web 2.0 is really just beginning. Keep your eyes out for transformative business model innovations. (Let us know any new ones that you see.)