Google Great at Monetizing Crap

I had lunch with the co-founders of an ad network startup on Thursday. I will keep their identities anonymous, but I cannot help quoting one of them, as he put his finger on one of the biggest problems plaguing Google AdSense: It is great at monetizing crap, but offers absolutely no premium for high quality traffic.

I have said before, that I am giving up on AdSense, and suggested how Yahoo could kill AdSense. The problem, however, is that the rest of the eco-system isn’t ready yet, and no one has yet come up with a compelling, scalable, vertically-oriented ad network that does justice to high quality traffic and superior content, by tapping into the brand advertising budgets available from major advertisers.

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* First Quarter U.S. Internet Display Ad spending hit $2.7 billion–a 16.7% increase over the same period last year, acc. to TNS Media Intelligence.

* Financial services was the leading category, with spending of $488.7 million on Internet advertising for the period–up 51.2% over 2006.

* The top 10 Internet display advertisers are IAC, Verizon, Experian, eTrade, Apollo Group, Netflix, Scottrade, AT&T, FMR Corp. and National Amusements.

* Top 10 segments are Financial Services, Retail, Internet, Misc. Services, Media, Telecom, Computer Products, Travel & Tourism, Education, and Auto.

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So where is the scalable vertical ad network for Business and Finance? For Travel & Tourism? For Consumer Electronics? For Lifestyle Products? For Auto?

No prizes for guessing which company is the most strongly positioned to pull this one off. Yahoo, the slumbering Yahoo. But ofcourse, as it takes its own sweet time, even old media giants like Time Warner may get their acts together ahead of the sleeping beauty!