The holy grail of online advertising is contextual ads that speak to your needs as an individual, at the time you're most ready to buy. Getting an offer for cut-price flights when I'm ready to book my ticket home from Orlando should be a win for both of us. But the baby steps along that road tend to be annoying (Gmail gets like Clippy: "I see you're breaking up with your girlfriend - would you like help with relationship counselling?"). And AOL had no contextual information about the user; they put wedding-related ads in the Wedding area and PC ads in the technology channel - it was just themed advertising.
Google can probably do a little better because it can mine your searches and your history and your email and all that information you publish about yourself in those memes you do. And you should get used to advertising 24x7 everywhere you look online courtesy of Google, and be thankful. Because Eric Schmidt is reminding me of that content comment. As he said to an interviewer from CNBC at the Milken Conference: "Google believes that advertising itself has value. The ads literally are valuable to consumers. Not just to the advertisers, but the consumers."
He goes on to admit that yes, they've already made the classic AOL blunder about monetising social networks. AOL made very little money from the most popular areas of the service: chat. You see, when you're talking to your friends, you don't interrupt the conversation to take a sales cold call, you don't click through to an advert. Social networks are the same; you care that your friend has a new car; you don't necessarily want to go look at the slick video of how a professional driver made it look good on TV, still less see a deal to buy one yourself. Who's buying all those ads on Facebook applications? Other Facebook application developers.
Other Schmidt nuggets
On not buying back stock: We love watching that cash sit in a well-managed bank and not get lost.
The new consumerism: Everybody wants the same thing. They want fashion, they want information, they want products, they want e-commerce, they want it now.
On discovering that running a big company means having a Microsoft-style formal process rather than spontaneous startup energy, even when you're a small fraction of Microsoft's size: [the biggest challenge today is] the ability to manage the creative process, deal with the complexity in what is a relatively large company, in terms of people, who's doing what. We have 50 development centers all around the world, people in different time zones, `Are you doing that? Are you doing that? Do I work with you? How do I check in my code?'...The systems in the company, literally who's doing what, what are they doing, seemed to lag our ability to hire these great people.
I did wonder if even after all this time it would be unprofessional to mention why I left AOL or to discuss the public record of someone I worked with; on consideration I thought it would only be unprofessional to snark about it*. I think ethics in journalism matter. That's why I thought this comment in the CNBC interview at a conference last week was pretty low.
CNBC's Maria Bartiromo: Yeah, you can bet, I guess, who tipped off the DOJ about the phone call that was made, Steve Ballmer or somebody from that side."
Not only it is a very soft-pedal interview, that refrains from asking any difficult questions (like if the Google tenet is do no evil, are they doing the right thing in China, if the Google tenet is don't trap user data, why are they complaining about being told 18 months is too long to keep it for?), but an unsubstantiated presumption about Microsoft behaving badly shouldn't go out at all, let alone be given authority because it's said by a journalist.
*I don't think I'm snarking by saying that Bull's departure from AOL was also three years before his prosecution as part of Operation Ore so probably not connected to the actions that led to his conviction and jail sentence (and for clarity, he's not the Guardian sports writer Andy Bull), which you can read his take on; that doesn't mention his time at AOL, which was during those four years, and it doesn't say whether he was paid for writing that article. I'm processing my own reaction to finding out that he was one of the few people caught by Ore who hadn't had their credit cards stolen but was looking at dubious content. I find it a little disquieting, but I'm far more offended by his suggestion that ISPs and search engines share his guilt by not have censored the sites or otherwise taken over the responsibility for his actions he should have taken himself.