The short answer is “no”

Forbes asks “Will social networks on the web ever make money?

No, and here’s why.  Social networking is built around the Mother of All Web Business Models—if you give away junk for free, you will build up a huge user base.  Then you just have to figure out how to get them to pay for it.  Unfortunately that is the exact opposite of a sound business plan.  First, figure out something people are willing to pay for.  Then market the hell out of it and get a good customer base.

On the web, nobody ends up paying for free crap.  Because when free junk goes payware, some other entrepreneur with a pocketful of angel investors will come up with the next big free junk idea, everyone will sign up, and later on down the road, will abandon it when it goes payware.  It’s all a part of the Great Circle of Life, like antelopes eating the grass, lions eating the antelopes, and bugs turning the lion carcass into fertilizer for the grass.

Right now the social networking sites that make money are doing it the old-fashioned way—crappy ads plastered all over anything.  Which you should be filtering out at the router, by the way.

No other model seems to work.

See, that wasn’t so hard.

Category: Finance, Web/Tech
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2 Responses
  1. Radio and TV have been given away free for years.

  2. Chris Taylor says:

    Tv and radio are “free” in the sense that some advertiser pays them to air ads, paid for by a sponsor, which is paid for by you seeing the ad and choosing to buy their product.
    I don’t know if that’s the model I’d be pursuing. Broadcast ad revenues are dropping significantly, and some project it will fall in the next decade by 75%. DVRs make it very easy to skip over the commercials in a couple of seconds.
    And unlike TV ads, I can stop browser ads automatically, so that they do not even have to be filtered out via manual effort.