The social media has opened up the alternative channel for consumer product marketing based on user-generated testimonials. Product review sites like epinions, service review sites like Yelp, and shopping sites like Amazon all qualify consumer purchase decisions. Just like polling data, these review sites have reached critical mass of users to make their wisdom of crowds’ “judgments” statistically credible. Consumers also use Facebook, Linkedin and Twitter to ask their networks for recommendations. Advertising is now viewed as obviously biased, even a form of propaganda.

The New York Times Bits blog today illustrates two types of online advertising markets – Google’s dominant search advertising business and Yahoo’s display ad business – and explains how Yahoo’s business is deteriorating with the fall of the economy. The simple reason? Search advertising is still perceived as a means for a user to find resources or products they want, a banner ad that pops up in front of reader ad hoc is a nuisance.