Cashing in on Social Networking

News Corp famous move in acquiring MySpace earlymany cases is being given away free to entice users
in the social networking market is a superb caseto set up their own social network, i.e. Ning, Ziki and
study of how social networks can produce economica host of others. But the free network model is
returns for their owners. Rupert Murdoch reportsaimed at providing economic gain to the operators
that MySpace is "on track" to pull in $800M in 2008.from advertising revenues. So while the medium of
Facebook, which has only started monetizing, is northsocial networking is deemed as value by the users,
of a $150M revenue run rate. Most of the revenuegiven the mass adoption rates, the next shift which
created for the network owners has been largelywill accelerate adoption is providing users with models
driven by advertising income generated from adthat generate economic return for their participation.
placements in their networks within user generatedA natural migration of human behavior, money
content areas. As previously reported many otherattracts the masses.
brands are jumping into the social networking arenaGiven that this model is already emerging the next
for fear of missing out on both the significant growthmajor shift will come from user creativity in content
of the space and the additional revenue opportunitiescreation. Content opportunities will be segmented by
the mediums can bring them.topics, industry and geography, just look at the
On the other side of the coin are models whereblogging world to see the type of content
users actual generate economic return, in this casesegmentation which has already emerged and many
that would be Second Life, where more than 800blogs are using the advertising model Google provides
users spent over 1 million Linden dollars, or aboutto generate income, although minimal. When you
$4,000 in one month, buying virtual property fromcombine blogging with advanced social networking
others users. The models for user generatedtechnologies you create a new medium and one
revenue are still early in there development howeverwhich accelerates the power of both existing
as the market further matures there are somemediums. Add to this advanced broadcasting
interesting models being developed based oncapabilities and new models for video, both live and
exchanges of products and services between users.on demand, and the exponential curve of creativity
Additionally there are developments for networksthat creates an economy points to a clear shift that
where users will actually share in the advertisingwill create the next major disruption of media,
revenue with the operators, thus motivating users toeconomics and relationships.
join and to populate the site with interesting content.Enter an Exchange of Connectivity, Products,
Money attracts the masses:Services and Advertising: Convergence of technology
When you look at the two models, operators makingthat enables users and operators to generate
money and users making money, which model wouldeconomic value through the exchange of products,
attract the masses? Let's consider the fact thatservices and advertising while leveraging "relationship
much of what builds value in a social network is userconnectivity" will become the new paradigm that will
generated content. That being said one would expectignite new markets. We will expound on the models,
users to migrate to networking opportunities thatthe players and the timing later but for now just
reward them economically for their time and effortthink about the logic and natural progression of these
populating the network. The technology that enablesdynamics. You should conclude "We're not in Kansas
the processes has become a commodity which inanymore Toto".