Old-School Network Tries New Ad Model

As new social network giants MySpace and Facebook look for ad models that keep up with their sharp growth trajectories, they might cast their eyes to one of the old kids on the block, Classmates.com.

The decade-old site, which was a social network before they were cool, is about to relaunch with a cleaner look and a novel twist on contextual advertising. Its new “My Favorites” page will let its 40 million members create profiles of their interests in music, movies, books and travel—much like those on other sites. The ad innovation is technology that automatically turns those lists into advertiser links, which direct users to participating merchant sites.

For example, a visitor to a profile listing Shakira as a favorite artist could click on the listing to hear a song for free, courtesy of RealNetworks’ Rhapsody, which sponsors the section. The visitor would have the option to buy the song or subscribe to Rhapsody’s Internet music service. Similar integrations link books to Amazon.com’s purchase page, celebrities to articles about them in People, and movies to Netflix. Each advertiser will appear as a sponsor, with a graphical ad, for their respective sections in “My Favorites.”

“The idea here is to try to give advertisers the opportunity to have their ads seamlessly and thematically alongside user-generated content to maximize its impact,” said Mark Goldston, CEO of United Online, the Web-services firm that bought Classmates.com for $100 million in October 2004. “Typically, in a social networking community, advertising really looks like an interloper.”

This problem bedevils social networking sites, which despite their wide reach are not yet seen by advertisers as prime space for Web ads, particularly because users tend not to click on the banner ads there, according to agency executives.

“It makes a lot more sense than traditional offers in banners that you see in some other social networks,” said Andy Terentjev, gm of business development at RealNetworks.