the buzz and the biz of social networking

The buzz… of course there’s a buzz around it and it’s been there for a while. Last year of undergrad I worked on a group project setting up a business plan. We pitched our web 2.0 WikiGlobe idea (to be honest, very similar to Mark Evan and co.s’ PlanetEye I was excited to see that). I remember pitching it to VCs (this was all for fun) in Nov 06 and then again in March 07 at the Wes Nicol National comp. – I actually rigged the Nov. one by first asking the people in my class who was on Facebook – only a handful at the time, but I told them to all lift their hands up when I asked the crowd (sneaky, i know;) Anyways, when we pitched the idea, of course, none of the VCs in the room had any idea what Facebook was and were shocked when they saw everyone’s hand go up (hahaha.. so clever of me!) Anyways, point being. I’d never have to explain anything about that now. It’s the rage.

But, the business. Oh right… money! How often have you ever clicked on an ad on Facebook. Exactly. Even with all that information on each of us, it’s a tough business out there selling advertisements, simply because it’s annoying for the users.

MIT Technology Review has a great (albeit long) read on the business behind it with interesting figures on online ad spending etc. Their point – we still haven’t cracked the code yet on how this business will exactly turn a profit, but we can’t stop. The people won’t stop moving into the web 2.0 world, so the advertisers will be there. The time to get creative on money making business models is now.

And maybe this is just the eco nut coming out but I’m fed up with the BUY BUY BUY!!! advertising. But I know the reality is our economy runs on me buying crap. But instead of meaningless, in your face ads, my personal view would be something similar to this:

Marc Canter has a few ideas. Canter, who cofounded ­MacroMedia, is now CEO of the company that produces the social-networking tool PeopleAggregator, which aims to allow communities, tools, search engines, and the rest of Web 2.0 to interconnect in one giant open mesh. He imagines ads of all kinds making up only about a third of revenue, with profits coming from a “long tail” of sources–from Craig’s List-style marketplaces to on-demand music downloads to branded apparel to ad-free premium services.

At least i get something out of it.

This was an interesting part of it though. Look at this graph. The black line in particular…

Hmm… you’re complaining that you’re not making any money and you’re investing in probably the most saturated of all markets in the world. Take a look outside! The balance of power will one day shift to the emerging economies and we’re playing a very egocentric game. Social networking is not just for the rich. It’s becoming a phenomenon around the world and no doubt, picking up speed..

But, then again.. do I really want our BUY BUY BUY! attitude crossing over to the emerging? Well, it already has I guess and there’ll be little stopping it.

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3 thoughts on “the buzz and the biz of social networking

  1. Fantastic post, and thanks for the link to the Technology Review article. Social networking and especially the environment that supports it is a very interesting one… I’ve written about this too on my blog, I really don’t like the options available for advertisers in this space at the moment, the crux of it for me is that the person in a social network is not in the market for anything -they are not looking for information about anything. The social advertiser is not selling to potential customers, but is putting its offerings infront of an unengaged audience… its almost a step back to tv type advertising where the hook is just cast out… sure its targeted, but a lot of this targeting is speculative, even behavioural, rather than the information need of that customer at that point in time.

    Cheers again, will be interseting to watch this one unfold.

    (my blog is here if you are intersted: http://blog.firstlightera.com/blog/default.aspx)

  2. katia says:

    Inspiring ideas and wish it would happen in the nearest future, but so far it seems a long way to go(unfortunatelly) as Google is going to monetisize on youtube (damn, wouldn’t like to see adds where) and developers are working on behavioral targeting advertising, so more and more adds that in turn will not fully solve wanamaker era problem of adverising… well, internet offers incredible opportunities for advertising industry to get in efficiency and hopefully not just size.

  3. […] 18, 2008 · No Comments A while back I wrote about the buzz & the biz of social networking based on an article in the MIT Tech […]

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