Social Networking's "Naked" Truth

http://www.cnbc.com/id/31849843

by vincentchan • 17 years ago

25 8 17 years ago

Periodic• 17 years ago

Reading an article [1] on Facebook and Google gave me some prospective on the value of these social networking sites outside of their own sites.

It mentioned Facebook's idea of using its knowledge of social graphs to power other sites to allow you to connect to friends through them. I'm guessing instead of having apps embedded in Facebook, Facebook would be embedded in the app. It's an interesting idea, which definitely brings a lot of value, but it still lacks a clear revenue stream.

[1] http://www.wired.com/techbiz/it/magazine/17-07/ff_facebookwa...

MicahWedemeyer2• 17 years ago

I think Facebook really could make a crap-ton in any number of ways, just from all the user data they have available for mining. Advertisers would (and already do) pay through the nose for that. I think ad revenue is generally an awful money source for a web app, but Facebook is big and addictive enough to command some crazy rates.

And that makes me scratch my head when they talk about "building the userbase" and "not focusing on revenue yet" Maybe I'm just short sighted, but I think it's time for FB to start cashing in. Just like anything else, it's best to launch your revenue model early and iterate, rather than waiting until the timing is perfect.

blacktastic• 17 years ago

I would think that selling access to the user data would alienate a large portion of users.

MicahWedemeyer2• 17 years ago

If they are overly crass or stupid about it (like Beacon), then yes, users will get pissed. But, if they just got rid of those awful sidebar ads and replaced them with high quality, highly expensive ads for major brands, then I think users would be quite happy. Especially if the ads were highly targeted (based on user data) and the users found the ads useful or entertaining.

They really need to ditch those "click here to learn the secrets to being a billionaire" ads. They're just awful and they cheapen that ad space. The longer those ads run, the harder it will be for FB to get real advertisers to put anything worthwhile in there.

knuton• 17 years ago

I don’t think that you are short sighted.

I think Facebook et al. think they are “long sighted”, when in fact they are overly optimistic as to their longterm success. All this talking about how they will worry about making money later presupposes that they will be around later. I think there are more and more signs (e.g. myspace) that this will not be the case for a large percentage of these “successful” startups.

sbt• 17 years ago

I also think it's time for them to cash in. It could be that FB is a fad that will phase out in a year or two, just like a popular night club has a half-life of about 6 years. However, it may be one of those things that will be around until it's displaced by something disruptive.

Concerning the revenue stream. Half a billion sounds significant, but maybe not even enough to break even.

andrewljohnson• 17 years ago

This article is pretty lacking in substance for a 15 pointer, and I would expect no better from tech news from CNBC.

pjdavis• 17 years ago

FTA: Yahoo's Carol Bartz doesn't have any interest in Facebook or Twitter either. No money in it, and Yahoo's building its own communities without having to spend huge premiums on unproven, unprofitable assets.

Such as Flickr, or Del.icio.us?