The Web Masters

Hulu was originally heralded as a "YouTube killer," but what has emerged is that even though both are video sites, they're so different in focus they can barely be considered competitors. YouTube is far and away the more popular of the two, streaming 5 billion videos in October—Hulu showed less than 1/20th as many—but YouTube has found its niche as a distribution arm for outlets like CBS News and the Associated Press that want their videos on the channel and incorporated in amateur, user-generated content. All of Hulu's shows are professionally made.

Advertisers prefer the latter, and though neither company reports its earnings, analysts think Hulu could surpass YouTube in revenues this year. YouTube, which is owned by Google, has struggled to profit from the ad strategy that made its parent company rich, where relatively unobtrusive text and banner ads are placed next to relevant content. Hulu's videos, on the other hand, attract audiences already accustomed to watching full-length commercials and other annoying-yet-lucrative forms of advertising. That puts Hulu at the forefront of the online advertising world, which is still experiencing growing pains. Kilar wants online advertising to be less of a punishment, so Hulu is continuously testing new formats. Already, viewers can vote on ads they love or hate, choose to watch a movie trailer instead of a traditional commercial, or opt for a single long ad instead of several shorter ones. Hulu's in-house creative team is even working with advertisers to create entertaining commercials that tell stories over several breaks. After making the Internet acceptable to media barons, Kilar might accomplish the truly impossible: making advertisements acceptable to audiences.

Sheryl Sandberg
Facebook
Facebook's chief operating officer is used to success. After earning top honors at Harvard Business School, Sandberg became a close confidante of Larry Summers while he served as Treasury secretary under President Bill Clinton. She went on to make millions as a top executive at Google, where she built up the search giant's global advertising operations. Her arrival at Facebook in March of this year was heralded as a coup—Google's stock price fell nearly five percent upon the announcement, and it was seen as a sign that Facebook was finally "growing up."

Will success follow her to Facebook? Before her arrival, the company experienced some well-publicized disasters, most notably the backlash against Beacon, an advertising innovation that shared your activities on sites like Fandango or Digg with your Facebook friends. Users considered it a privacy nightmare, and Facebook quickly killed it.

The company's latest feature, Facebook Connect, is even more ambitious. It hopes to make your Facebook profile the nucleus of your online existence. With Facebook Connect, you can log onto sites like Hulu, Digg, and popular blogs using your Facebook credentials. Users can adjust their privacy settings at Facebook and have the changes ripple across the Web, or at least to all the parts of it using Facebook Connect.

Partner sites like Facebook Connect because they get to take a peek at your profile, giving them more information about who's visiting; they may also have an easier time attracting new users who won't have to go through the onerous step of creating new profiles. But the real winner is Facebook, which now can find out what users are doing across the whole of the Web. As one commentator put it, "Facebook is about to become the Internet." And the more Sandberg & Co. know about you, the better they can target advertising to you. That is ultimately how Sandberg's success or failure will be judged: on whether Facebook becomes an advertising juggernaut on par with her former employer.

© 2008