Google CEO Eric Schmidt says the rise of social networking marks the development of the online lifestyle, calling it "a phenomenon on scale with the rapid-fire adoption of instant messaging," which
makes it a really "big deal." These words, of course, are backed by his company's recent announcement that it would pay $900 million to be the exclusive search provider of News Corp.'s online
properties, which include MySpace, IGN, Rottentomatoes, Askmen, and Scout. The deal presents an opportunity for News Corp. to marry two of the most important indicators of user behavior: search
history and personal data. "Sure, there may be some privacy issues," MarketWatch columnist Bambi Francisco says. "But is that all? After all, we've become such a transparent society with high
expectations about service (and that means better targeted ads)." Couldn't Google do the same thing? Sure, but it doesn't, because the company thinks the incremental value of marrying the two isn't
worth the privacy risk. Yahoo, however, does combine search history with targeted ads, and so does Microsoft, but you haven't heard any 'eureka!'-ing from advertisers. Why--because context is proving
to be more valuable than personal behavior anyway. So perhaps Google, Ask.com, and others stay away because the economics aren't worth it any more than the privacy risk.
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