I think the problem might be that google has completely ignored advertising. I do not think it has changed much in the past perhaps five years, much less than s

I think the problem might be that google has completely ignored advertising. I do not think it has changed much in the past perhaps five years, much less than search. They looking to copy facebook, or twitter, or everything else and to tell me what I want to eat, but focus on their core products which is search and advertising. So, there is a real opportunity for someone to come up with a much better algorithm than Google's in regard to targeting ads. But then, if you do not have much inventory, you can not really target, and a website owner would rather have an untargeted ad than nothing. So I think the problem of targeted advertising is quite complex. For example, link adsense are targeted well, images not so well because perhaps they are more expensive to make and thus there isn't much of an inventory. Why would an advertiser, but the very few, design an image ad when a one hour to set up link ad might work just as well or better. In any event, people like an image advert when they see it the first time, they might the second, maybe third, but soon they bored of it and start hating it. So changing the ads often is important too. I suppose, to conclude, the issue is much more complex than simply saying that the problem is targeting the ads due to the many variables - which the ad network or publisher can or can not control - that go into targeting the ads well. That might perhaps be why there is not much progress in this area. The internet has basically just copied the model from the traditional world and tried to automate it. It is an undervalued area though. Not many other things could make one a billionaire on par with google than solving the advertising problem.