Earnings, IPOs, and the like

by Carlo Longino

Filed Under:
ads, revenue, social networks

facebook, myspace

Happy Birthday Facebook, Now Show Us The Revenues

from the maybe-they-got-some-birthday-money-they-can-use dept

Facebook celebrated its fifth birthday this week, and amid all the navel-gazing about what that means for the internet, one big question still hangs over the site: how will it monetize its popularity? This is an issue that continues to dog the social-networking space, as Om Malik points out that MySpace is struggling to generate revenues as well. These sites' massive amount of traffic and visitors, and the huge amount of time spent there, have traditionally not automatically equated to big advertising revenue, and there's nothing to suggest that's going to change soon, particularly given the slowdown in ad spending. If these sites are depending on advertising for revenues, they've got to come up with something more compelling than simple banner ads, which aren't delivering decent CPM or clickthroughs. While sites like Facebook and MySpace have plenty of life left in them, at some point, they're going to have to deliver an effective way to generate significant revenues.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Anonymous Coward, Feb 6th, 2009 @ 12:47pm

    banner ads poorly executed too

    I live in the US and read and speak only English, however I frequent a website for a company that is based in Iceland. The website is English only, however I'm assuming the IP address is in Iceland. Facebook places ads on my page that are written in Icelandic, or some nordic language I can't read. So not only are the ads ineffective, the process of placing them isn't very accurate.

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

  2. identicon
    Anonymous Coward, Feb 6th, 2009 @ 3:17pm

    Social Networking works against itself

    I think social networking sites actually work against themselves. They not only give people something to do, it's something they don't want to be bothered during. Advertising during social situations is not well received.

    The ads in gmail are about as close as anyone has come to "social networking" ads that don't completely suck. And you can damn sure bet the CPM for those ads are orders of magnitude less than the average CPM for Google ads.

    Essentially, personal social situations are a bad time to advertise. And that's what the web lends itself to. Personal social situations instead of the "mass market" of TV, concerts, or sporting events.

    The one to one or few to few social interactions. No good way to advertise into that.

    Large scale social sites (myspace, facebook, etc.) are dead ends. They always were.

    Humans are tribal in nature.

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

  3. identicon
    Anonymous Coward, Feb 6th, 2009 @ 3:34pm

    Re: Social Networking works against itself

    I think youre missing an important point. Humans are tribal, and circles of friends will always stay more limited than 100% of the world population. But even if 100% of the world population is on facebook, it doesnt mean that they are all part of one big circle of friends. Facebook just agitates the tribes and helps them rub shoulders. But unlike with reality, online it is easy to ignore people or tribes you dont like. This is really a solely positive improvement to the concept of human tribes.

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

  4. identicon
    Haggie, Feb 9th, 2009 @ 12:03pm

    Finally, at five years old, some people are just starting to question Facebook's business model & expect profitability?

    This is the glaring weak spot of high-tech VC investment. What business or industry would givea company five years of funding and still not see any roadmap to profitability.

    By IRS standards (operations must be profitable by year three to count as a business, not a hobbie), Facebook isn't even a real business). No wonder everyone wants to work there...

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

  5. identicon
    anthony bain, Feb 20th, 2009 @ 5:27am

    facebook had better pull its finger out soon because Bainzy will bite it off when it emerges next month.

    This 3 tier, 3rd generation social marketing place was build around creating revenue streams first and then the social aspect was thrown in after.

    The tools the platform the viral aspects all reflect that a business brain put together Bainzy, not a spotty chested kid.

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

  6. identicon
    fJman594, Feb 22nd, 2009 @ 2:17pm


    WTF is Brainzy, your own site? SPAM!

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

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Insider Shop - Show Your Support!

Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Report this ad  |  Hide Techdirt ads
Recent Stories
Report this ad  |  Hide Techdirt ads


Email This

This feature is only available to registered users. Register or sign in to use it.