Is Adsense Going to Die?
October 15th, 2007Google Adsense, affiliates, and their derivatives have encouraged a whole new direction in the monetization of internet sites now, especially blogs. So much so that I sometimes wonder if the entire internet isn’t just a giant group of advertisers struggling for links.
UPDATE: Techcrunch has an interesting article discussing some of the same material.
But there’s just one problem:
People have to buy things to make advertising worthwhile.
With the world economy entering what looks like a severe credit crunch and Americans owing more than 2.4 Trillion Dollars (that’s more than $8,000 of debt per capita), not to mention a loss of wealth due to declining housing prices, many economists are expecting a consumer spending-led recession.
In other words, people won’t be buying as much from internet ads anymore.
On the other hand, advertising is a curious business. In some ways, the less people buy the more companies advertise. Still, I’m expecting the price per ad to do some substantial declining in the next couple of years, which corresponds to a loss of income for all the ad-supported blogs sites out there.
That doesn’t bode well for Adsense supported startups out there either. Though I think Paul Grahams thoughts about the direction of startups in general are pretty spot on, I think the survival rate is going to start doing some plummeting as consumer spending slows.
Survival rates of businesses always decline when we enter recessions, but this one may be particularly bad.
I’d love to see some data on types of organizations that tend to thrive during economic turmoil. I’m betting it isn’t financial institutions (at least not this time) or consumer products. We might see a rise in alternative communities though.
-zot
Support The Decision Strategist.Popularity: 19%
