The online video network YouTube has added a new feature that allows users to download music, movies, TV shows, games, and other products from the website. The ''click to buy'' offer on the site takes users to Amazon.com or Apple’s iTunes store, where they can pay for and download various products. YouTube’s new e-commerce ad feature gets a share of the revenue from every transaction. At present, the ''click to buy'' option is offered by Universal Music Group and EMI only. Additionally, Electronic Arts’ Spore video game also forms part of the program through Amazon.com. Google Inc. acquired YouTube in 2006 for $1.65 billion. Since then, the popular video sharing website has not established a strong revenue model. The new feature, however, is expected to increase its revenues.
IAB Reports 15.2% Growth in Internet Advertising
US online ad spending grew 15.2% in the first half of 2008 as compared to the first half of 2007, according to the latest survey by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers. The survey revealed that online advertising revenues hit a record high ($11.5 billion) in the first six months of 2008, but slowed down in the second quarter. In fact, the second quarter figures suggested a relatively flat growth of 12.8% from last year, a sign that the weakening economy has affected online ad spending. Of the constituents, revenues generated by search advertising saw the biggest gains, with a 24% increase from last year up $5.1 billion, followed by revenues from display advertising (banners, digital video, rich media), which increased 19% to $3.8 billion.
Google Launches ''AdSense for Games''
Google Inc. has announced the launch of the beta version of its new ''AdSense for Games'' program, which is viewed by many analysts as a much-needed stimulus for the in-game advertising industry. The program, which was in the works for nearly a year, aims to make the current Flash game market at least as profitable as the rest of the Internet’s content. Among the advertisers who have already participated in the program are eSurance, Sprint, and Sony Pictures Entertainment. According to ComScore, flash games are one of the hottest trends at the moment, with an estimated 25% of Internet users playing at least once a week. Hence, many analysts believe that there is great profit potential from this business. Microsoft first acquired the in-game advertising company Massive in early 2006, a move which was followed by Yahoo!’s foray into the market when it bought Adscape Media for $23 million. Double Fusion and NeoEdge, both of which mainly specialize in video-based advertising, are the other competitors to Google in the field.