The difference between the online ad bubble in 2000 and the one you suggest today is the transition of offline ad spending and offline consumer spending online.
1. 4% of total commerce is now ecommerce, according to the US Dept of Commerce. Ecommerce penetration in certain categories like travel exceeds 20%.
2. 11% of all ad dollars are now online ($26B on $210B) according to SNL Kagan.
3. $13.7B of local online spending is by regional or smaller businesses, according to Borrell. The average local business has $1200 per month in marketing spend, which is finally beginning to move online.
In short, consumer dollars and non-venture backed businesses need/want to be advertising online and Facebook is great solution: They offer access to the 2nd largest audience on the web and presumably mobile.
You could argue that Zynga and other venture backed gaming companies are driving short term revenues, but this advertising base is profitable, generating revenues from consumers who pay for virtual goods.
The flows of money governing this boom are consumers and enterprises, not a litany of unprofitable venture backed startups.
1. 4% of total commerce is now ecommerce, according to the US Dept of Commerce. Ecommerce penetration in certain categories like travel exceeds 20%. 2. 11% of all ad dollars are now online ($26B on $210B) according to SNL Kagan. 3. $13.7B of local online spending is by regional or smaller businesses, according to Borrell. The average local business has $1200 per month in marketing spend, which is finally beginning to move online.
In short, consumer dollars and non-venture backed businesses need/want to be advertising online and Facebook is great solution: They offer access to the 2nd largest audience on the web and presumably mobile.
You could argue that Zynga and other venture backed gaming companies are driving short term revenues, but this advertising base is profitable, generating revenues from consumers who pay for virtual goods.
The flows of money governing this boom are consumers and enterprises, not a litany of unprofitable venture backed startups.