Microsoft’s head of U.S. sales Keith Lorizio blames Facebook and other social network sites for low online ad prices. You can’t really fault him for that, of course. Facebook and MySpace gets about $0.56 CPM on average, while the Internet at large gets an average of $2.43.
The problem, though, is that most of these social network sites are still struggling to come up with an effective and efficient way of turning a profit.
Let’s just imagine for a moment that one of those sites has all of the sudden decided that selling advertisement isn’t way to go. Instead, they have figured out another method of generating income from all the attention and time on site that they receive. Furthermore, they have decided to give away all these ads for free.
What would Microsoft do then?
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