Can Social Networking be a real business?

by oneafrikan on July 4, 2008

Martin sent this around the office this morning, pretty interesting reading…
_ Technology Review: Social Networking Is Not a Business*

Social Networking Is Not a Business*
Web 2.0–the dream of the user-built, user-centered, user-run Internet–has delivered on just about every promise except profit. Will its most prominent example, social networking, ever make any money?

I keep going back to this with what we’re doing – you have to offer real value to your users over and above the quick thrill, social pull, or fleeting curiosity that most social stuff offers. Why do people go back to Starbucks? It’s convenient and the coffee is mostly good. Why should people come back to your site? Cos it’s easy to use, and there’s something there that they want/need/desire, that you can give them now. Advertising is not a silver bullet for scaling a business.

10 comments

See, right there is the problem (assuming my research is correct).

Social networking is not something new — humans have been doing it for years, thousands of years — it’s not about making profit out of ‘social networking’ directly, but generating a profit indirectly.

An analogy if you will: a cellular company is not making money out of each every word spoken, but makes out out the fact that people speak.

and I think we need to rethink the model of ‘making money out ‘socialising’, but make money because people socialise.

*I hope I makes sense. (my research is still yet to be formalised and concluded).

by lebogang nkoane on July 4, 2008 at 12:36 pm. Reply #

*so for the grammatical errors, english not my first language, ;-)

by lebogang nkoane on July 4, 2008 at 12:38 pm. Reply #

I’m not sure I agree with you, because no-one charges us online to “speak”, and if they do, we go somewhere else where it is free. Would people still use FB if it was not free? I think not for at least 60 to 70%, or more, of users.

So, my thinking is that if the user is expecting a free experience, then there has to be something else that can offered, that is not free… see what I mean?

by Gareth Knight on July 4, 2008 at 12:44 pm. Reply #

I see what you mean — but, I’m not arguing against that.

(hmm, my analogy is not good, huh?)

by lebogang nkoane on July 4, 2008 at 12:58 pm. Reply #

;-) Maybe it needs some more illustration?

by Gareth Knight on July 4, 2008 at 1:12 pm. Reply #

You are right — i think it’s a need a mathematical function to map it to — I argue better through that.

Let me mull over it for a bit — and I’ll come back, ja — you when you have the argument but, can’t find the words — i’ve been like that for quite some time ‘about social networking sites.

by lebogang nkoane on July 4, 2008 at 1:19 pm. Reply #

dayam! my English sucks! LOL!

*sorry for that!

by lebogang nkoane on July 4, 2008 at 1:23 pm. Reply #

Hi Lebogang (and Gareth)

Advertising is not the silver bullet – A rather shiny bullet might be the creating of a captive target audience who others are happy to pay to have access to. Simple affiliate revenue models start to appear when users see offers that extend the positive experience yuo are giving them(as I’m sure Kindo has with Moo et al).
The best summary of this argument I’ve seen is Chris Anderson’s talk here:
http://www.netvision.de/uk/dispatching/?event_id=5bb1b5e95afabb2e62d2b148ded47706&portal_id=369401748e8249f142a700d8098a3473

by matt on July 4, 2008 at 4:33 pm. Reply #

Yup, that is the silver bullet – the challengs is not the BD or the affiliate models, but in the creation of the captive target audience big enough to make it worthwhike… ;-)

by Gareth Knight on July 7, 2008 at 12:17 pm. Reply #

Great blog, I’ve searched the internet for new and exciting social networking sites, and have found Casuals Online to be one of the most interesting sites around, they offer 3d chats. http://www.CasualsOnline.com.au

by 3d Chat on August 15, 2008 at 11:33 am. Reply #

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