Sunday, November 9, 2008

Social Networking Sites work to turn users into profits

Social networking websites have been bought and sold for very substantial sums of money in the recent past. These sites must generate large profits to justify their valuations or there will be serious consequences. If social networking websites are not able to produce the desired revenues then the expected proliferation of these sites will not become a reality. An argument can be made both for reaching profits and not reaching profits. The natural question is "so what?". Well... these websites will only continue to operate if they can generate profits. The failure of social networking websites might call in to question the importance of social networking. The following is a quote from the article regarding the beginning of profit generation. ""Honeymoon is over for social networks. They need to start generating revenue now or bow out of the race," according to a new report from In-Stat."

In conclusion, social networking websites must start generating profits to justify their values. The sites will close in the future if they do not turn a profit because investor cash is very fickle. Failure within the big 3 social networking sites (Myspace, LinkedIn, and Facebook) could change the way we view social networking as a concept.

http://www.savethis.clickability.com/st/saveThisApp?clickMap=saveThis&fb=Y&url=http%3A//www.usatoday.com/tech/techinvestor/industry/2008-05-11-social-networking_N.htm&title=Social-networking sites work to turn users into profits - USATODAY.com&random=0.3204199335881014&partnerID=1665&expire=

1 comment:

Christopher Tunnard said...

OK for now, but you need to find some examples for the debate. Facebook is trying many different models, for example. Think about how Amazon, eBay, and Google struggled at the beginning. Click-through advertising is getting old and saturated...or is it?