Social Networking Sites Still Figuring Out The Money Thing

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

Wed, Jun 21st 2006 8:19am — Joseph Weisenthal

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.

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18 Comments

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thankgoditsthursday, 21 Jun 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?
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anonymous coward, 21 Jun 2006 @ 9:20am

if i get eyeballs i automatically make money. hmmmm, where and when have i heard that before????
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BillyBob, 21 Jun 2006 @ 9:45am

"if i get eyeballs i automatically make money."
And that's different from techdirt.com, how?
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Avner Ronen, 21 Jun 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
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Denfro Licious, 21 Jun 2006 @ 10:52am

Not eyeballs
It's not eyeballs... Every advertiser is in it for one purpose, C2C (Convert 2 Customer)
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what social networking site keeps them coming back, 21 Jun 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.
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Steve Bryant, 22 Jun 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.
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PJ Brunet, 22 Jun 2006 @ 7:40am

Did Facebook ever win the "ConnectU" lawsuit, or is that still ongoing?
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Philip Michael, 10 Jul 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.
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Mr. K, 21 May 2007 @ 10:20pm

Re: have you seen FusnpotPals?
yeah!the site looks kool...im playing around with it...
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Philip Michael, 26 Jun 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).
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Crystal, 15 Jul 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
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brain, 20 Nov 2007 @ 7:00am

how do social networking site make money withou ad
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NYK007, 3 Feb 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
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NYK007, 3 Feb 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
[ link to this | view in thread ]
John Safar, 15 Sep 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.
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Cheryl H, 4 Nov 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.
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graham, 23 Oct 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.
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