PlanWebs Web Design, Online Media & Marketing

The Economist
Social networking is definitely the next big thing, but it’s not necessarily the next big moneymaker. Like Web-based email before it, social networking will evolve as a feature tied to the Web portal experience. However, like email, it’s not (really) a business.

Meanwhile, as media companies bid up the value of social networks like MySpace, Facebook, and Bebo, the industry is still searching for a suitable revenue model. Recently, Google co-founder Sergey Brin admitted that “social networking inventory as a whole”–which includes its own offering, Orkut, as well as a search advertising deal with News Corp.’s MySpace–was performing worse than expected. Facebook has done even worse. The company recently admitted that it “simply did a bad job” with Beacon, an advertising program that tracks online activity and informs users of their friends’ purchases or actions taken on third-party sites.

The bigger question is whether users should really have to visit a specific Web site to make use of those connections. As Forrester Research analyst Charlene Li said in a recent report, “We will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to be social,” because social media services “will be like air. They will be anywhere and everywhere we need and want them to be.”

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