There are several myths about how social networks make money. In reality, many social networks are profitable through various revenue streams like advertising, selling digital goods, charging for premium memberships and services. While some networks have yet to make money, the opportunities for generating revenue from social networks are substantial and include areas like mobile applications, games, location-based services, e-commerce and enterprise solutions. A thriving ecosystem of supporting businesses is also emerging around social networks.

1. How social networks are (trying) to make money myths, reality and opportunities ouriel.typepad.com

2. Myth#1 Except Facebook and MySpace there is not so much to talk about

5. Myth#2 Social Networks are only for teens so who cares?

13. Myth#3 Social Networks are not making any money

14. MySpace 750 million dollars Facebook 350 million dollars Cyworld 220 million dollars Mixi 100 million dollars Flickr 55 to 120 millions dollars LinkedIN 100 million dollars (and profitable) Xing 45 million dollars YouTube 200 million dollars (not really a SN) Digg 20 million dollars Show me the money

15. BUT..money is not for everyone, yet Twitter >>>>>> 0 dollars MyBlogLog >> 0 dollars Delicious >>>> 0 dollars FriendFeed >> 0 dollars Last.fm >>>>>> x dollars

16. Reality#1 The 4 revenue streams

17. #1Advertising Traditionnal ads Social ads Sponsoring Affiliation Feed advertising Filter Broad Ads Endemic Ads Demographic Ads

21. #2Digital goods Hot or Not generates $7M (yearly) from sale of virtual flowers (up to $10 per flower). Habbo (virtual world) generates $60M (yearly) from virtual goods. Dogster – 50 million gifts sent in 2 years, gifts cost $0.25-$5.

22. 35 million dollars out of this, hugh!

23. #3Membership Xing Club Penguin Second Life

24. #4Premium services LinkedIN Jobs Facebook surveys Ning ad free service

25. Reality#2 The attention challenge

28. Reality#3 Profitability is and will be hard to get

30. Reality#4 The birth of an ecosystem

31. Actors making money around SNs Widget : Slide / Rockyou Apps : Games, Lending Club Ad networks : OfferPal, Super Rewards Services on Services : sms for Twitter Consulting : Agencies, Freelance, bloggers Back Office: moderation / spam tool providers

32. Opportunity#1 Current Search is useless

33. How would you describe social search? Marissa Mayer: We believe social search is any search aided by a social interaction or a social connection…

34. Opportunity#2 Mobile

35. 52 billion USD by 2012

37. Opportunity#3 Games and entertainment

39. Opportunity#4 Geographical extension

41. Opportunity#5 Connect to Reality

42. Opportunity#6 Payment/MicroPayment / eCommerce

43. Opportunity#7 Enterprise

45. Opportunity#8 Beyond Business and Money

48. Contributors to this presentation All sources and references on http://sites.google.com/site/presentationsns/