The frequency of my blogging has decreased in the recent months due to my Facebook addiction. Instead of picking topics and analyzing them intensely I have instead chosen to read Facebook status updates, view photos, and make comments on my friends Facebook pages.
All of my friends are pretty much on Facebook with only select few opting out of participating only to seem cooler than everyone else. But how cool can you be if you when you don't know that Alex took a quiz and if he was a 1980's rock star he would have been Billy Idol. A girl I know even announced she was pregnant on Facebook.
I wonder how can Facebook use the information of its unique users to generate more revenues and eventually become profitable?
This got me to thinking, What is Facebook worth? Everyone knows Facebook founder Mark Zuckerburg was said to be worth around 2 Billion Dollars (before the market correction). The Investments from Microsoft and a few other private companies have been placed for only a very small percentage of ownership in the company.
Currently as of July 30th 2009 Facebook is in the Red. They are not making any money. Their model of generating income from the "cool" idea of social networking has not produced any edible fruit. Now they host a variety of Advertisements and target users by the specific information in their profiles. For me they are pushing hot single girls via dating services, penny stock ads and brokerage firms. Not Bad. But I have not bought anything from a Facebook Ad yet.
How they turn nickels and dimes into Millions and Billions of Dollars? Could Facebook become more Googlish and start making more money from some type of Search? And/or Linking fess to partner sites. I bet they are working on something like this right now. The Key is to match users up with Relevant Content and provide value that cannot get anywhere else through exclusive deals to the community.
Can a social networking site actually charge money to use it?"
Well sure they could try, but how much could they charge? Would anyone actually pay now for something they expect to get for Free? According what we have seen in the past the majority of people would probably move to the next new free site.
How can I make money while giving away my product/service/content for free?
I don't know the answer to this question or else I would not be writing this Blog. Maybe the awnser is simply Google. They are the Obvious Winner in this space so far. There are many sites giving "stuff" away for free then trying to figure out how to make money off it later. In any "normal" business model this seems ass backwards, abusud and insane.
When Time Warner acquired Myspace last year they thought they were buying into the next hot thing. They actually were buying the last hot thing. This is when Facebook really started heating up. The features and format of Facebook for social networking are second to none. People started leaving myspace en mass due to phishing, privacy and over advertising on the site. I actually get emails now from Myspace telling me to log in to see what my friends are up to. Rupert Murdoch must be a little sour buying in at the top of the Myspace Bubble from Tom and his 300 million Friends.
The Challenge with any Internet business model these days is: How can I make lots of money while giving away my product/service/content for free?
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