by: Idris Mootee
Facebook
are still attracting tens of thousands of new users each month and
Google is trying pushing the social networking its OpenSocial
initiative. Not long ago Microsoft spent $240 million to buy a 1.6 % of
Facebook (that gives Facebook a valuation of $15 billion and there’s
almost no room for any option play for employees with this valuation.)
Just when Facebook thinks that its 50-plus million users can now be
mined for ad dollars. They received a harsh lesson and realized just
how tricky it is to use the demographic and behavior information about
its readers for targeted advertising. Everyone is thinking hard about
innovative ways that can make social media the answer for advertising
2.0, which is a very wrong starting point in the first place.
Many marketers try to look for the next magic solution and thinking
social media is it, but I can tell you it’s not. Can the YouTube and
Facebook eventually become the ABC, CBS and NBC of the next century?
Definitely not, but they will drastically shape the future of broadcast
media. The social media concepts will have long lasting impact on the
media industry. Where was Facebook a year ago? Where was MySpace 2
years ago? There will be a next Facebook in less than 12 months. This
is just the beginning of another 5-7 year innovation cycle which is
part of the evolution of the broadcast industry. I am not saying that
this is the end of MySpace and Facebook. My point is that the social
media leaders of today may not necessarily be the next mass social
networks. The big question is whether or not members of social
networking sites will accept advertising in any shape or form at all.
We have grown used to the idea of free entertainment being supported by
advertising. Do members going to these social networking sites because
they want to get away from advertising or they don’t mind advertising
at all provided they support those free services? The beauty of these
models is it costs them nothing to market themselves or acquiring
users. The cost of acquisition is practically zero because users join
voluntarily and invite their friends and provide their own content
through their profiles and interests. In addition, the cost of running
these services is relatively manageable.
The most disruptive thing if the majority of people shift their
behaviors from using a portal as their homepage and instead use their
social network pages, this will be a big threat to those media
companies who wish people will use them as their homepage. Imagine if,
every time you logged on, you weren’t greeted by Yahoo or Google or
MSN, but a collection of news, music, videos, photos, shopping tips and
blog postings, written or selected by your friends or whatever groups
that you actively belong to. You can assess to different area which
displays information from differetn groups. So you can ahve a
professional or work page, a personal page and a family and hobby page.
Instead of information spreading hub-and-spoke like from major media
outlets, it would flow to consumers the way like people share their
photos, through people they know and most importantly trust. So where
is the future of big media company in this future? In that case it may
no longer be optimal to have a dozen of media companies in the center
controlling the flow of information. That’s why Facebook is not just a
social networking site, but a platform for ‘personal connectivity’ and
‘sharing’. Another challenge for the news portal is that they rely on
email for much of their traffic and to bring in consumers from outbound
email marketing. These emails be end be landing on a social network
site. Email and social networks eventually will converge and that is
slowly happening. Here’s an example: One idea Yahoo is playing with is
internally called “Friend Finder” which analyzes a user’s email traffic
and indicates the friends with whom a user has strong email
connections. It bases its findings on the volume of incoming and
outgoing traffic and such factors as the frequency and speed with which
the two parties respond to each other. The service works with emails
sent by non-Yahoo users. Currently 20% of Yahoo email users are MySpace
users and only 10% are on Facebook, but it is dangerous to base the
future on these data. Features like this could eventually extend across
email services. There are simply plenty of opportunity space here.
Original Post: http://mootee.typepad.com/innovation_playground/2007/12/the-coming-conv.html
