Social Networking Business

Can social networks make money?
When they’re labeled as “social,” why do you want social networks to turn commercial? But marketers will leave no stone unturned to milk every Internet surfer who enters a social network—even inadvertently. But success is miles away. Why? Because the online social networking properties don’t have any underlying business model.

Today, the Big 2—MySpace and Facebook—together have over 100 million global users, but their ad revenues are pathetically low. Web market researcher eMarketer estimates that US advertisers will spend $755 million on MySpace and $265 million on Facebook this year. Dozens of other social networks in the world will get only tiny slivers. Even in the entire US market that holds maximum potential, social network ad spending is expected to stay low and eMarketer estimates that it would reach $2.6 billion by 2012 from this year’s projection of $1.4 billion…Full Article