Zen & the art of SNS monetising

The thought started from this article, which talked of how Google was losing top execs to Facebook. It apparently isnt just a phase because SNS (social networking sites) are increasingly grappling with the issue of revenue, or rather, the lack of it. These hires apparently fit the bill.

Remember the initial days of the net? I don’t because i was a pretty late starter myself (2000- a virtual space odyssey, thats what my book would be called 😀 ), but that was still the time when (at least in india) revenue was a puzzle for everybody in dotcom, which partly explained the bust that soon happened. They had a partial solution happening with banner ads, and slowly that became the norm. In most places, it still is 😐 . the problem was that to most users, it became a blindspot.

Then came Google, and the era of contextual ads, first in searches as sponsored links, and then in any site in the context it  had content in. It still works. But the net has moved on. So, users know exactly when its useful to them. This is of particular relevance in the case of social networking sites.

At a basic level, I go to SNS to have a conversation with friends –  that could be just plain catching up, bitching about work, life etc or (thanks to facebook) just sharing a common interest over a game of scrabble. Can contextual ads work here? It was a difficult question to answer until one takes a look at the Facebook revenue scene. I personally don’t think it does, for the simple reason that, well, the context is wrong. Unlike search, where my intent is clearly info/purchase, its not so in SNS. This video, while totally out of context, shows what i mean about intent.

[youtube=http://www.youtube.com/watch?v=Ahg6qcgoay4]

So how does a free site (for users) like Facebook get revenue, and god forbid, if they don’t, will they shut down? No, dont call Mummy yet, this WATBlog article clearly shows the Chinese (damn them) have found a way to monetise their SNS, especially QQ. ( what a name. dont ask me kyun) And its not online ads, thats only 13% of the revenue. The rest is from virtual goods, services and mobile.

But i personally think there’s more that can be done. And that has a direct connection to brands. We’ll discuss that next week, after i hear from you.

until next time, remember you need to be social 😀