There are over 300 ad networks
It seems every man and his dog is becoming an ad network these days. The latest to join this rather crowded party is Disney subsidiary SOAPnet.com. In the words of the Wall Street Journal (no link due to paywall):
The business of brokering ads across clusters of Web sites has become one of the most popular — and overcrowded — niches on the Web. The result is a glut of networks competing with each other, confusing media buyers and guaranteeing that some sort of shakeout is inevitable.
This tells me now might be a good time for a roll up play (e.g. Index’s recent Adconian), but unless there is some very special secret sauce this is no space for an early stage venture backed company. It is far too mature and competitive - by the Wall Street Journal’s estimate there are around 300 companies calling themselves ad networks.
The fact that Google’s biggest strategic move right now is to enter this market (through Doubleclick) says something about how they see search, which in turn says something about the prospects for a Microsoft-Yahoo! combination.
The current phase of internet advertising definitely feels like it is entering the endgame, where success is all about scale and squeezing the pips.
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