Yesterday Google reported an unexpectedly sharp slowdown in the number of “clicks” people make on its online adverts on social networks, leaving Google out of pocket thanks to the guaranteed minimum payments it makes to a number of social networks that carry its advertising, principally MySpace.
This was despite a number of initiative pursued by Google to reverse the decline, all of which had failed according to Sergey Brin, but they remained hopeful they could turn things around.
This pushed shares down by 9%, which have fallen by 25% since January 1, contributing to the nervousness on the markets about its core revenue engine – advertising services.
To date the only people making money from social networking are the owners of the platform – not quite the commercial eco-system hoped for by many. Seems that people just use them for socialising.