There seems to be a lot of talk lately that the Internet advertising industry is experiencing a bubble that's about to burst.

The sentiment is that online advertisers are spending an awful lot of money buying ads through Google and Yahoo, and are about to make a shift. The idea is that Google is the 800 lbs gorilla in this market, and as Google goes, so goes everybody else with it.

That's a chilling thought for a guy like me, who relies on AdSense income.

I have to agree, that these are very precarious times for businesses who've put a lot of eggs into the contextual advertising basket. There seems to be a paradigm shift taking place, one that Google has just recently recognized.

It's social networking.

In order to understand the online advertising industry, you have to look at where people are congregating. Today, sites like MySpace and Facebook is where the all the people are gravitating to. It makes sense that this is where online advertisers are going to spend their money.

We also still live in a world where we access the Internet through a 17" monitor (or 19" like me), and a PC and a keyboard. This is going to change also, as technology makes devices that can access and present the Internet with as much ease and clarity as you do now.

Leading this change to alternate forms of access will be the social networking sites. Kids will demand that they access MySpace and Facebook through their mobile phones and PDAs, or other dedicated devices.

Don't count out MySpace and Facebook as just entertainment sites for kids. While they are indeed dominated by teens and twenty-somethings, the fact is that social networking is how they perceive the Internet. As they mature into their 30s and 40s, they'll continue with that paradigm.

The question is how are you preparing to change with the trends?  

Labels: Paradigms, Social Networking