Social Networking Sites Still Figuring Out The Money Thing

from the no-wonder-they-all-sell-out dept

Despite the massive popularity of some social-networking sites, it's well known that they've had a hard time monetizing their page views. In the case of MySpace, the company is trying a different approach. Instead of selling site-wide ads, it's allowing advertisers like Disney to buy sponsored profiles that are separate from the normal user pages. Essentially, it's exploiting the fact that MySpace is perceived to be a haven of tawdry teenage high jinks by offering a way for brands to be present on the site without mixing in with the "bad stuff". Whether this makes any sense, or whether users will want to make friends with these officially sponsored profiles remains doubtful. The other powerhouse in the space is, of course, Facebook, which is well known for wanting a $2 billion buyout. They recently announced a new advertising deal that came with one caveat -- they gave the buyer an equity stake in the company. The company is claiming that this wasn't a quid-pro-quo, and that the deal is more strategic than a mere ad sale, but it certainly sounds a lot like some of the deal making behind the last bubble when offering up an equity stake in exchange for a purchase was a common strategy. Given the troubles these companies are having, maybe these companies are a little too good at moving value to the edge of the network.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    thankgoditsthursday, Jun 21st, 2006 @ 9:04am

    backlash

    is a social netorking backlash immenent? havent we seen it already with friendster? isnt socializing suppossed to be socializing and not sitting in front of your computer?

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    anonymous coward, Jun 21st, 2006 @ 9:20am

    if i get eyeballs i automatically make money. hmmmm, where and when have i heard that before????

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    BillyBob, Jun 21st, 2006 @ 9:45am

    "if i get eyeballs i automatically make money."
    And that's different from techdirt.com, how?

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    Avner Ronen, Jun 21st, 2006 @ 9:53am

    value of eyeballs and the business model

    users will not pay for the MySpace service. NEVER. so yes the business mode needs to be based on generating a critical mass of eyeballs, and finding ways to monetize it. - sponsored profiles - banners - keyword advertising - selling music, tv shows, movies different today from bubble 1.0 is the fact that there are more advertising/sponsorship dollars flowing to the web from non-internet players. and more monitization opportunities (e.g. selling content, video ads) not different crazy, crazy, crazy valuations.. and stupid internet ideas getting money

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Denfro Licious, Jun 21st, 2006 @ 10:52am

    Not eyeballs

    It's not eyeballs... Every advertiser is in it for one purpose, C2C (Convert 2 Customer)

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    what social networking site keeps them coming back, Jun 21st, 2006 @ 11:57pm

    There's no argument that MySpace comes out on top as far as getting eyeballs on the sign in page.. and ads on your home page.

    Frankly, friendster dropped the ball with not keeping up with traffic demands.. People just don't have patience for slow moving web sites.

    When my MySpace log-in page turns into an elaborite full screen Superman advertisement, I have to say that has a lasting impression.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Steve Bryant, Jun 22nd, 2006 @ 6:22am

    BillyBob, techdirt makes the lion's share of their money writing custom market analysis for private clients. This web site is a value ad for users and advertisement for companies.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    PJ Brunet, Jun 22nd, 2006 @ 7:40am

    Did Facebook ever win the "ConnectU" lawsuit, or is that still ongoing?

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Philip Michael, Jul 10th, 2006 @ 1:52pm

    have you seen FusnpotPals?

    Speaking of social networking sites, have you checked out www.FunspotPals.com? It's modeled on meeting people to share acitivities like diving, skiing, gol, etc. on trips.

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    Mr. K, May 21st, 2007 @ 10:20pm

    Re: have you seen FusnpotPals?

    yeah!the site looks kool...im playing around with it...

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    Philip Michael, Jun 26th, 2007 @ 12:12am

    Re: Re: have you seen FusnpotPals?

    The FSP.com site (FunspotPals.com) is now into it's "Phase Two" which looks intense! They've basically produced a My Space for sports (essentially).

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Crystal, Jul 15th, 2007 @ 9:39pm

    Wow. I always thought these sites were making bank. I never thought they would have trouble advertising. I think they already sold out though.

    "When my MySpace log-in page turns into an elaborite full screen Superman advertisement, I have to say that has a lasting impression."

    This is exactly what I thought. I saw that, and my jaw dropped. They must have made a pretty penny on that deal

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    brain, Nov 20th, 2007 @ 7:00am

    how do social networking site make money withou ad

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    NYK007, Feb 3rd, 2009 @ 11:24pm

    Hello

    Hi guys,

    As a newly registered user I like to say hi to everyone who uses this forum. I am a newbie to this forum.I need help applying and tweaking a new theme but I dont want to loose any of my current content and banners. I have the theme installed and almost ready to go. Thanks

    NYK
    MLS

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    NYK007, Feb 3rd, 2009 @ 11:27pm

    Re:

    Hi guys,

    As a newly registered user I like to say hi to everyone who uses this forum. I am a newbie to this forum.I need help applying and tweaking a new theme but I dont want to loose any of my current content and banners. I have the theme installed and almost ready to go. Thanks

    NYK
    MLS

     

    reply to this | link to this | view in thread ]

  16.  
    identicon
    John Safar, Sep 15th, 2009 @ 11:30am

    Niche Social NEtworking sites

    Interesting discussion that I happen to come across while signing up for a social site. Honestly, I think th eonly real market is for niche topic social networking sites like "Soccer Moms", "Golf Lovers" or in my case, "Stage and screen artists".

    I signed up for a new site (barely a week old) called StartingStage.com and it's grown pretty fast already. I think when the site is niche enough and useful enough, it's easy to gather members and eventually build an advertising base.

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    Cheryl H, Nov 4th, 2009 @ 6:52am

    Custom Social Networking

    I have to agree with John, the smaller social networking "niche" sites are gaining in popularity and are a great way to use the technology without competing with the "teen sites". I'm also seeing a rise in the corporate social networking, will be interesting to see where this technology is 10 years from now.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    graham, Oct 23rd, 2010 @ 6:01am

    how do sites make money?

    do sites make money when somebody visits the site and is charged certain amount per click?

    Please help me out,

    Graham.

     

    reply to this | link to this | view in thread ]


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