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.
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Filed Under: ads, revenue, social networks
Companies: facebook, myspace
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banner ads poorly executed too
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Social Networking works against itself
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.
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Re: Social Networking works against itself
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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...
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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.
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??
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