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)
backlash by thankgoditsthursday on Jun 21st, 2006 @ 9:04am
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 comment) (link to this comment)
by anonymous coward on 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 comment) (link to this comment)
by BillyBob on Jun 21st, 2006 @ 9:45am
"if i get eyeballs i automatically make money."
And that's different from techdirt.com, how?
(reply to this comment) (link to this comment)
value of eyeballs and the business model by Avner Ronen on Jun 21st, 2006 @ 9:53am
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 comment) (link to this comment)
Not eyeballs by Denfro Licious on Jun 21st, 2006 @ 10:52am
It's not eyeballs... Every advertiser is in it for one purpose, C2C (Convert 2 Customer)
(reply to this comment) (link to this comment)
by what social networking site keeps them coming back on 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 comment) (link to this comment)
by Steve Bryant on 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 comment) (link to this comment)
by PJ Brunet on Jun 22nd, 2006 @ 7:40am
Did Facebook ever win the "ConnectU" lawsuit, or is that still ongoing?
(reply to this comment) (link to this comment)
have you seen FusnpotPals? by Philip Michael on Jul 10th, 2006 @ 1:52pm
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 comment) (link to this comment)
Re: have you seen FusnpotPals? by Mr. K on May 21st, 2007 @ 10:20pm
yeah!the site looks kool...im playing around with it...
(reply to this comment) (link to this comment)
Re: Re: have you seen FusnpotPals? by Philip Michael on Jun 26th, 2007 @ 12:12am
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 comment) (link to this comment)
by Crystal on 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 comment) (link to this comment)
how do social networking site make money withou ad by brain on Nov 20th, 2007 @ 7:00am
(reply to this comment) (link to this comment)
Add Your Comment