Social Networks
ARE
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