Many web masters frequently state that Yahoo can’t make money from their traffic because only search gives you a way to effectively target advertising. Michael at TechCrunch recently got sucked into this idea too.
It’s a nice theory – just a pity it’s totally wrong. Yahoo (and other portals) don’t make much money from their traffic because they are obsessed with copying Google’s search-based advertising model. What they should have done was build a advertising system based around personalization – so they it shows ads to people based on the links they had previously clicked and emails they had previously read. That would play to their strengths rather than meaning they have to try & catch Google in search traffic.
Personalized advertising systems aren’t new. Amazon Omakase is probably the most widely deployed, but Amazon doesn’t really have the traffic base to make this super-effective, and Omakase is just used to advertise Amazon products. Personalization guru Greg Linden also built his own, similar system for Findory, also based on Amazon advertising inventory.
