Wednesday, June 15, 2005

Google ads are dumb

As everyone knows, Google ads are pretty dumb. Keyword-driven ads are too simplistic, especially for third party, niche sites. They don't care about context or propriety. This is a huge inefficiency. And even with this inefficiency, Google's revenues are what they are, and growing at the rates they are growing. Now think about this: Google's engineers are experts in artificial intelligence. They are innovative. They will eventually figure out how to get context into the picture. Think about getting 50% click-through ratio instead of 5%. It is a fundamental change in the scale and scope of Google's operation. One reason to be bullish.

(I'm not necessarily bullish on GOOG. Click fraud remains a big threat to Google's revenues from small ad network partners.)