Social NetworksARE

a business

And it’s

to wake up

They did it again

They were not the first

Amateurs

• “The business of having online sites with content created by amateurs to be viewed by other amateurs never had a reasonable chance of making money.”

– Where to start?• All professionals start as amateurs.

• Many people pay for non-professional things (bands, parties, art)

• Why would online be any different?

– Examples:• Physical objects: Spreadshirt (user-generated T-shirt designs)

• Virtual goods: IMVU + Second Life (user-generated digital goods)

• So many more!

Greater fool

• “The fact that at one point Facebook had a $15 billion valuation, that Rupert Murdoch's News Corp (NWS) bought MySpace, and that Google (GOOG) bought YouTube only proves the "greater fool" theory.”

– Facebook made surely over 200 million USD in 2008, they might not be profitable YET, but this is proof of a market

– MySpace might have missed their target but still made over 700 million USD in 2008. Rupert Murdoch recognized a media beyond the “social network talk”. Maybe it’s time TIME recognizes it as a new media too.

Normally

• “Normally, having a social network where people go to share profiles of themselves, write blogs, and submit videos would not seem like much of a business.”

– Does “normally” refer to a TIME before the Internet?

Trouble making money

• “What is true is that social network sites have had trouble making money.”

– Half-true: Social networks focused on ADVERTISING as a main revenue-maker have had trouble making money.

– There are FIVE social networks in Asia which are hugely PROFITABLE.

– FOUR of them are listed on stock exchanges.– One just made a BILLION USD and 400 MILLION NET

PROFIT– Their business model is gradually being adopted

elsewhere.

Low revenues?

• “Analysts believe that MySpace rival Facebook had revenue of $265 million last year. That is astonishingly low for a company that had 57 million unique visitors in the U.S. last month.”

– What would be the comparable? The TIME website? It all depends on the revenue model.

Never do well

• “The reason that social networks will never do well financially is that they break from the successful model that has brought so many marketers to the internet.”

– The reason SOME social networks will not only SURVIVE but will do EXTREMELY well is BECAUSE they break from the traditional model.

– The reason most traditional media will disappear is because they DO NOT.

– More info on traditional media:• http://www.shirky.com/weblog/2009/03/newspapers-and-

thinking-the-unthinkable/

Best place to market

• “The Google results' pages for the search "heart doctors in New York City" is probably the best place in the world for heart doctors in New York City to market themselves.”

– POSSIBLY true, but for now at best

– There is a DOCTORS community site in Japan with 150,000 physicians. Pharmaceutical companies advertise there. The site is profitable.

Bogs

• “Social networks are bogs filled with people who are there to befriend one another, tell their stories, or voice their complaints.”

– Is this a remix of MySpace 2005?

– How about… playing? Organizing offline events? Discussing business?

– How about Facebook games, Facebook groups, LinkedIn?

All about me

• “For those who want others to know all about them or who have unrevealed grievances about life, these are wonderful online destinations.”

– This won’t please – among others – the 175 million Facebook users and millions of MySpace users many won’t recognize themselves in this

– 35 million LinkedIn business users might disagree too

– And this is without mentioning all the non-US social networks…

No-one know who those people are

• “They are not a place where an advertiser can focus on a single group with a message aimed at those people, because no one knows exactly who those people are.”

– This is very far from true as there is far more personal information on social networks than anywhere else on the internet.

– Sorry about this, but do TIME knows better

Traditional and Orderly

• “What the advertiser wants is traditional, orderly content.”

– What advertisers want is to sell products, no matter how.

Perverts

• “With the exception of a certain number of perverts who sneak in, there is nothing wrong with social network”

– Social networks are monitoring closely “pervert” activity and might be better at detecting them than any other way.

– There are no perverts among TIME readers

No other purpose

• “marketers don't want the perverts and they don't want a collection of people with no common purpose other than to share with one another”

– …

Why this document?

• A media revolution is happening before our eyes and many don’t see it• The only possible excuse for such poor reporting would be and April’s Fool –

but surely not a good one and a risky move for TIME’s reputation

• Ignorance can be fought with education– Facebook is not the only social network out there– US-centric views are not enough

• Fighting misinformation is a civic duty– Traditional media is under pressure with newspapers closing one by one– It reacts with poorer and poorer reporting, fact checking and “infotainment”

• Join the action!– Seek the truth & Share it