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It’s official. Internet marketing as you know it died today. One of the internet’s largest social network sites finally killed one of the internet’s largest search engines as the “eyeball attractor” for display ad views. Although it got little news, this mighty accomplishment may be the herald of a major shakeup for online commerce.

Consider yourself forewarned: Everything you thought about internet marketing to-date is now old news.

According to Reuters, MySpace officially overtook Yahoo as the leader in online ad displays in June. Here’s their scoop:

SAN FRANCISCO (Reuters) – Yahoo Inc has lost its lead of the U.S. market for online display advertising to MySpace and its parent company News Corp’s Fox Interactive Media and MySpace, new industry data shows.

Fox Interactive’s collection of sites, led by MySpace, drew 56.8 million advertising views in June, compared with Yahoo’s group of sites which had 53.1 million, according to data from Web audience measurement firm comScore this week.

Ironically, the article can be found on Yahoo’s network, but no matter. Perhaps that will be Yahoo’s new role – pushing articles and text; it certainly isn’t the first sign of struggles at the “granddaddy” web portal.

The larger point, however, is that social networking has finally reached a benchmark that allows itself to assert, with economic validity (not just sophistry), that it’s a serious force for e-commerce. To date, MySpace still doesn’t get the high-dollar advertisers that Yahoo or Google pulls in, but that may all be changing. Even as YouTube struggles to monetize it’s network through high-cost display ads, the MySpace accomplishment creates new momentum for an entirely different mode of future internet success. One which just may challenge “leaders” like Google, Yahoo and others.

For example, if social networking starts to out-sell search advertising consistently, then say good-bye to all the SEO optimization strategies. And it’s about time – since it’s all mostly hocus-pocus anyway. Nobody really knows how it all works, so any money you spend on it is only one-step removed from roulette. Who cares if you come up first on Google, when you may be more likely to be found through a “referral” link from a friend-of-a-friend on a MySpace or LinkedIn? Why spend millions on pay-per-click when a few (free) kind words on Facebook can send lots of relevant traffic – from one person who already likes your service to all of their friends to try your service – for pennies or less. Internet marketing suddenly becomes less about who is searching for you, and more about who is talking about you.

And that’s something that the search engines really can’t control. So it will be harder for them to make money off of it. If blogs and social network recommendations – from friend-links to outright referrals – become strong sources of new business, there is no longer any point to fighting for keywords or placements on search portals. In fact, being “first” becomes almost irrelevant in a social-network-dominated marketing game. More important will be the status of being “most” – such as most linked, most distributed, most referred.

This has dramatic implications for the entire internet commerce structure. Marketing dollars may actually shift back from “search relevancy” to “CPM” display. Rather than paying Google or Yahoo for ad placement, companies may pay bloggers and well connected social network profiles to feature their display ads; or simply to blog about them. Paid sponsorship comes back – and not just from Ed McMahon or sports celebrities. Everybody has the potential to be a paid endorser for products and services they believe in – and are willing to tell their friends all about.

For many companies, new marketing opportunities will be unleashed. For example, a company with 50 employees can suddenly create 50 new marketing channels – through 50 profiles on one social networking site alone. And with display ad monetization, it can be both a new business and direct revenue channel for almost any organization. Bloggers are already doing this with relevant ads on their sites. But it’s going to get even harder for that model to work, as Safari and Internet Explorer 8 continue to make “private surfing” a new catch phrase for browser features. No longer can Google simply scan your cookies and serve up the right display ads. When browsers go dark, and surfing becomes secret, the ad-relevancy model becomes extinct. Domination of keywords and relevancy-placements by companies with huge budgets to out-bid smaller competitors on Yahoo or Google will also diminish, if not disappear.

For some industries, it’s a marketing dream come true. Take real estate, for example: Most sellers choose their agent through a personal referral or using their last agent again. Not from websites or direct email or newspaper ads. Referral networking offline has always been the number one source of new business for most brokerages; now it will have the opportunity to be so online as well. Imagine the millions to be saved by companies pouring pay-per-click dollars into cyberspace when they can monetize their existing customers already support them through “word of mouth.”

A watershed moment has occurred in the e-commerce world. We may not even realize it right at this moment. But as the generations of consumers continue to shift slowly, inexorably from Seniors and Boomers to Xers and Yers, the mode of marketing will continue to move. It went from newspaper to radio, then to television and finally online. Now, online, it’s moving from “where do you want to go” to “where do you live online.” Get ready for socal advertising to explode the online marketing concepts as you know it. Today’s Googles may be little more than giggles when the online consumers decide they’d rather ask their friends for recommendations than some get the opinion of some local-yokel Yahoo.

– Matthew