Facebook are still attracting tens of thousands of new users each month and Google is trying pushing the social networking its OpenSocial initative. 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 playingwith 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.
