Exceptionally wrong article by TIME magazine on social networks. http://www.time.com/time/business/article/0,8599,1888796,00.html

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