Social Networks ARE a Business

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Exceptionally wrong article by TIME magazine on social networks.

http://www.time.com/time/business/article/0,8599,1888796,00.html

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Social Networks ARE a Business

  1. Social Networks ARE a business And it’s to wake up
  2. They did it again
  3. They were not the first
  4. 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!
  5. 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 quot;greater foolquot; 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.
  6. 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?
  7. 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.
  8. 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.
  9. 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/
  10. Best place to market • “The Google results' pages for the search quot;heart doctors in New York Cityquot; 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.
  11. 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?
  12. 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…
  13. 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
  14. Traditional and Orderly • “What the advertiser wants is traditional, orderly content.” – What advertisers want is to sell products, no matter how.
  15. 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
  16. 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” –…
  17. 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

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