Lately, I have been thinking about advertising – no, not as a business model for Zoho, advertising and work-oriented software don’t mix, in my opinion – but from the point of view as an advertiser ourselves, again not primarily related to Zoho. AdventNet, the parent company of Zoho, uses a variety of marketing channels, ranging from trade shows to search advertising, to popularize our software products. What we have noticed is that the ROI of internet advertising, outside of search, has been dismal and getting worse. I was reminded of this when I read the post by Jason Calacanis on falling advertising rates in social networking sites.

But this trend extends far beyond social networking. As a WSJ Online and NY Times online regular (30 minutes a day), I can safely say that I don’t recall any of the ad impressions on those sites in months. No doubt they have always been there, but I just can’t recall any. In contrast, I have watched CNN perhaps a total of 1 hour in the last 2 weeks and yet, I can recall at least a couple of ads from CNN. What makes TV advertising so effective is that it is so intrusive. In the other end of the spectrum lies search ads on Google, which has access to the most distilled form of user intent available, making it possible for ads on Google to almost become content.

Where in the spectrum do other forms of internet advertising lie? By their nature, intrusive ads on the internet don’t work – the user simply clicks away. Even when the prospect of some form of compelling content forces the user to stay (pre-roll ad on internet video, for example), pretty quickly users figure out they can switch to another browser tab until the ad runs itself out and the content becomes available.

Personalization and micro-targeting are thought to be the answer to this problem, but I am not persuaded. Let me give an example: let’s say I list reading & economics as my interests in my profile somewhere that is available to advertisers. Let me be even be more specific and list Austrian School economics. So could a publisher micro-target me to try to sell me a book? Here is the problem they would face: there are a number of specialized blogs that offer outstanding content on these subjects, and I am very likely to hear about books from these sites organically. People who post on these sites (both authors and commenters) are likely to be far more relevant than any computer algorithm could ever be in targeting my interests. So a prospective book publisher in these topics is better off providing real content to these sites to seed user interest than to run banner ads all over the place. In fact, in at least one case, the publisher of such books runs a fairly active content site, and I end up buying the books because I like the content offered in the site.

So here is what is going on in a nutshell: targeted advertising is competing for attention with targeted content, and content would win that contest every time, as long as intrusion is not possible. The only way for targeted advertising to win is to actually become content itself. That explains why Google search ads are so effective: they are a form of content.

conversion of facebook’s audience to metanotes use will be one of the key touchstones of my strategy.

it’s sort of like these kids are special, but we can make them collaborate like they simply can’t on facebook.

Announcing Facebook Connect Share 12:32pm Friday, May 9 Published by Dave Morin

At Facebook, we’re committed to enabling people to communicate and stay connected wherever they go.

In August 2006, we introduced the first version of the Facebook API, enabling users to share their information with the third party websites and applications they choose. Hundreds of companies have leveraged these APIs, allowing users to dynamically connect their identity information from Facebook, such as basic profile, friends, photos information and more, to third party websites, as well as desktop and mobile applications.

In May 2007, we launched Facebook Platform, which allowed third party developers to build rich social applications within Facebook. More than 350,000 developers and entrepreneurs from 225 countries have signed up, and started developing applications, and have seen significant adoption by Facebook users worldwide.

Today we are announcing Facebook Connect. Facebook Connect is the next iteration of Facebook Platform that allows users to “connect” their Facebook identity, friends and privacy to any site. This will now enable third party websites to implement and offer even more features of Facebook Platform off of Facebook – similar to features available to third party applications today on Facebook.

Here are just a few of the coming features of Facebook Connect:

Trusted Authentication Users will be able to connect their Facebook account with any partner website using a trusted authentication method. Whether at login, or anywhere else a developer would like to add social context, the user will be able to authenticate and connect their account in a trusted environment. The user will have total control of the permissions granted.

Real Identity Facebook users represent themselves with their real names and real identities. With Facebook Connect, users can bring their real identity information with them wherever they go on the Web, including: basic profile information, profile picture, name, friends, photos, events, groups, and more.

Friends Access Users count on Facebook to stay connected to their friends and family. With Facebook Connect, users can take their friends with them wherever they go on the Web. Developers will be able to add rich social context to their websites. Developers will even be able to dynamically show which of their Facebook friends already have accounts on their sites.

Dynamic Privacy As a user moves around the open Web, their privacy settings will follow, ensuring that users’ information and privacy rules are always up-to-date. For example, if a user changes their profile picture, or removes a friend connection, this will be automatically updated in the external website.

These are just a few steps Facebook is taking to make the vision of data portability a reality for users worldwide. We believe the next evolution of data portability is about much more than data. It’s about giving users the ability to take their identity and friends with them around the Web, while being able to trust that their information is always up to date and always protected by their privacy settings.

We look forward to working with other leading identity providers to develop the best policies and standards for enabling the portability and protection of users’ information.

We expect that Facebook Connect will be available publicly within the next several weeks. If you want to learn more about bringing Facebook users to your website, application or device, send us an email at: connect@facebook.com.