Social Networks Big Payoff

VC's and the Blogaratti have been romancing Social Networks. However, its promise of big payoffs was recently put into question by Google itself, blaming the networks in part for their recent revenue slump.

“We have found that social networks are not monetizing as well as we were expecting,” said George Reyes, chief financial officer, as Google reported its earnings for the final quarter of last year.

Since Google has guaranteed to make minimum payments to a number of social networks that carry its advertising, principally MySpace, the slow growth of the business had left the company out of pocket and contributed to falling profit margins in the quarter, he added.

Comments

[Brian Block]

Yes, social networks are getting some money these days, but whether the networks themselves are able to monetize themselves remains to be seen. I don't think that social networkers want to bombarded with advertisements.

[portlandrealtor]

Google's day had to come, considering how long their run of good news has been. The social networks will certainly have some value, but it's not nearly the same value as the targeted advertising from search engines.

[Tego Venturi]

I may be slow… but I don't get how these social networks make any substantial money. A few PPC ads… can that really add up to serous income?

[Joe Flores]

social networking sites continue to grow in popularity, but the ability to truly monetize these efforts comes as a result of other existing SEM approaches. Solely relying on social network sites will provide an identity, but in the long run have a marginal effect on your ROI

[Atom London]

I have to agree that monetization of social networks is key to success.

We all can't depend on Google throwing crazy amounts of money at us. We need to create better ways to make a successful on line community.

We are attempting to do this through our sites. Check us out

Great posts...