I came across this interesting post on alternate ways social networks are monetizing. Of course there is Facebook and the big frenzy they are trying to jumpstart into what is essentially still a purposeless network (come on now). Are there mainstream monetizers for social networks? What about vertical social networks unlike LinkedIn for example? I wonder.
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I have seen a lot of social networks while working at a venture capital firm. Most are all set to be doomed. There is a very distinct advantage of first movers. Whoever has given the first in its niche has succeeded. We have LinkedIn, Youtube, MySpace as examples. Facebook started as a Student social network. This is also a niche.
Certain obvious ways by which social netwroks make money are known to all. These are advertising, affiliate programs and selling physical equivalents of virtual gifts. The less known are:
1. Selling non-confidential information; viz age, sex and geographic location
2. Promotion of “same kind” of items. MySpace promoting an ad from Warner Bros.
3. Micro-payments and Virtual asset monetization. This is done in MMOGs and similar business models.
Its too difficult to retain people for longer term in a single Social Network.
There are too many “niche” social networks coming in, including Ning’s create your own social network.
People join multiple social networks as and when they get invitation from friends, creating user base and initial traffic on social network giving an impression of “Success” of that network.
But euphoria dies down sooner or later. Also you can create a niche network within facebook, so why do you need a social network for each niche.
What real value Bharatstudent offers to a student over what facebook is offering?
SN and community sites have a large potential to make a lot of money. The long tail principle applies, and if the concept is good, and has the ability to keep people together (after the seeding is done), there’s no question, why the money would’nt follow.
targeted ads is one way. ads-by-choice is another way. p2p promotions is one