Everyone is Talking Social Networks

While out recovering from surgery, I got to catch up on my giant stack of The New Yorker magazines (Dad gets it for me every Christmas). I was surprised to find an article (quite good too) on Facebook, the quickly growing social networking site (and virtual goldmine). When asked about the role of advertising in their business model, the founder of Facebook, said it had a place but was not relying on it heavily. Nice to see these new poster children from Silicon Valley are not following the steps of their predecessors.

'New Social Networks Mean Business' on the cover of the latest Fast Company and their bloggers are talking about a Marketing BlogJam. Great to see two of my favorite magazines talking about one of the most interesting topics in business innovation.

Comments

[Will]

Broker,

Thanks for the articles. Net neutrality is a huge topic that our DC Office is following closely for the sake of advertisers.

[Brokerblogger]

Will, I agree that it is "Nice to see these new poster children from Silicon Valley are not following the steps of their predecessors." However, as the founder of the established social "opinion network" RateItAll.com puts it: "If I had my way, there wouldn't be any advertising on the site. The reality is we have to pay the bills however." = http://rateitall.blogspot.com/2006/06/trialing-new-ad-format.html

On 12/12/05 BusinessWeek Online wrote "The MySpace Generation", and under "ONE-HIT WONDERS" it says: "What's not yet clear is whether this is a dot-com era replay, with established companies and investors sinking huge sums into fast-growth startups with no viable business models. Facebook, barely a year old and run by a 21-year-old student on leave from Harvard, has a staff of 50 and venture capital -- but no profits." = http://www.businessweek.com/magazine/content/05_50/b3963001.htm . This is in direct conflict with what Wikipedia says about Facebook: "(revenue is rumored to be over $1 million per week)" = http://en.wikipedia.org/wiki/Facebook_(website)

With a private company, you don't know for sure. But, one thing is for sure, IMO, if Net Neutrality legislation isn't passed, there will be increased expenses for all content providers like social network sites, and that will be passed down to all the members of the ANA. Then the need for quality content providers to follow in "the steps of their predecessors" will be more urgent.
I'm off topic now, but will post a comment about this at the ANA Marketing Maestros post on "Growth-The Only Metric that Counts", since increased marketing expenses have a direct negative affect on net profit growth.