Reading List: Twitter Ads Click With Users

Each day we provide a roundup of five stories from around the Web that our editors read and found noteworthy. Follow us on Twitter for updates throughout the day @digiday.

The Twitter Ad Paradox: Twitter has gone its own way on the ad front, deciding against banners in favor of promoted tweets, promoted trends and promoted accounts. The move is smart, if it can scale, since Twitter wants to create the type of advertising that will work best in its environment. If early results are any indication, Twitter is succeeding in just the way Internet display ads are failing. On the Web, those spending the most time online (the savviest users) click the fewest ads. On Twitter, it’s just the opposite: the more you use Twitter, the more likely you are to click ads. That’s quite a differentiator, but again, only if Twitter can prove it can run large-scale ad campaigns for national marketers. eMarketer — Brian Morrissey @bmorrissey

Yahoo in Play, Again: So Google and Microsoft are once again kicking the tires on Yahoo, though this time they may just lend some cash to private equity buyers, not actually do the buying themselves. While we’ve seen Microsoft getting pretty serious about Yahoo in the past, why Google? Looking far into the future – one would guess Google doesn’t want Yahoo’s content business, since it’s not really their game. And portals are quickly losing their relevance in the digital ad market. Therefore, Google must be looking at Yahoo as a means to ultimately lock down search in the U.S.: a future deal could result in Google landing an ultra-dominant 80 percent of the market, putting Bing in a precarious position. One other possible motivation for Google: with all of Yahoo’s inventory, suddenly Google’s ad exchange becomes a whole lot richer and more brand-friendly. NY Times — Mike Shields @digitalshields

Gut Check Time for Netflix: It seems like Netflix went from a Harvard Business School case study in innovation to a HBS case study in corporate mismanagement pretty much overnight. The move to shift its business to streaming movies digitally is sound, but the way it was handled was ham-handed, to be kind. Silicon Valley might still be in love with Reed Hastings for his Steve Jobs-like insistence on what’s right for customers, but the customers are voting in an opposite direction. Ever since the Qwickster fiasco (since reversed), Netflix has lost a whopping 800,000 customers. Think about that: nearly a million customers disappeared in the third quarter. Netflix is scrambling to get its footing after ditching the separate brand plan but sticking to its raised rates manuever that’s at the heart of customer defections. Maybe it can lure the lost souls back by actually securing top-notch content for its streaming service. Because content is still king, and Netflix has too much crappy content still for streaming-only customers. GigaOm — Brian Morrissey @bmorrissey

Kindle Fire Shows Promise as iPad Competitor: Since it’s release in 2010 Apple’s iPad has driven the tablet market, and accounted for the vast majority of sales in the category. Efforts from a range of rival manufacturers including RIM and Samsung have failed to gain any serious traction, but it appears Kindle’s Fire tablet might have the best shot yet at curtailing the iPad’s dominance of the space. J.P. Morgan has upped its assessment of the device to reflect that potential, and now says it expects the online retailer shift 5 million units in the fourth quarter, representing almost half the number of iPads sold in the quarter ending September 24th. GigaOM — Jack Marshall @JackMarshall

Partying like it’s 1999: While the rest of us take what certainly feels like a second dip in the recession pool, in Silicon Valley, the Lexus dealers and real estate agents are slouching toward November 21, the day the the LinkedIn stock lockup period expires. On that day, LinkedIn employees can begin selling the stock they acquired as a result of that social network’s IPO. Pandora Media and Zynga’s lockup periods will also expire by the end of the year. Although the news is good if you happen to be a Lamborghini dealers, it also recalls the feast before the famine the last time dot com company employees had this much money to throw around. Is the tech industry once again flying too close to the sun? WSJ –Anne Sherber @annesherber
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