• London Telegraph, Thursday, January 17, 2008 1 PM

Google and other search engines may cede ad revenue to Facebook and Bebo as marketers devote more of their budgets to social networking, says a new study from the UK. The "Impact of Social Networking in the UK" report from Web measurement firm Hitwise claims that 2008 will see social networks improve their monetization, particularly with regard to search.

It makes sense: social networks know more about their users than traditional search engines, which rely on user history to target ads. The information, which is served up by the users themselves, could command higher ad rates than those charged by Google and Yahoo.

However, Hitwise Director of Research Robin Goad, who co-authored the report, points out that overall, search engines within social networks are "pretty appalling." If they can substantially improve their search technology, Goad says Facebook could "threaten Google"--at least in terms of ad revenue. In the long run, as more companies open groups and profiles on social networks, information about them could become much easier to find. Social networks are an important source of traffic for other Web sites, particularly music, film and TV websites, which would pay a pretty penny to generate even more traffic.

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