(Editor’s note: Marc Parrish works for Jigsaw, a company that competes in the professional contacts business. Asked whether he felt conflicted mentioning companies LinkedIn and Plaxo, which are also relationship companies, he responds: “Jigsaw does not really compete with either LinkedIn or Plaxo - they are about relationships and we are about data - so I don’t really see a conflict there.”)
Social networking sites can get millions of users, but can they make millions in revenue? Here’s a partial list of social networking sites on Wikipedia. It shows that sites with little general brand recognition can show great growth and user counts, but are not relevant enough to our lives for us to give them a piece of our paychecks.
My favorite is aSmallWorld, touted as a “MySpace for the European jet set and social elite”, or “Snobster” because it requires an invitation, which claims 130,000 users. It was started by the son of a former Swedish ambassador to the US, and touts such members as Naomi Campbell, Paris Hilton, James Blunt, Ivanka Trump , Tiger Woods. My question is: Does Tiger plunk down his AMEX?
You can make money from your users, if you make getting revenue part of the social contract with the community.
Plaxo is a great example of social success not translating into monetary success. It was the first social network that I ever saw, and I have always liked the service. I signed up nearly five years ago, have used it a lot, and they have yet to earn a dollar from me. It recently doubled its user base to 15 million with the mobile integration. Wow! However, LinkedIn (with only half the users) purposely drove towards premium products available to their users at a price -• job postings, direct introductions, and service provider recommendations. I like them, and have paid for them!
Plaxo’s premium service includes de-duplication of my contacts in outlook, sending unlimited ecards, and recovery of your contacts should you have a disaster. I won’t pay the $50 a year for this (even though I once recovered all my contacts this way when it was free).
Relevance to your community and monetary engagement is what will propel social networking forward. Wikipedia has had their donations increase directly in proportion to the growth in articles and users. Match.com continues to increase their average revenue per sign up.
The meteoric growth in teen oriented social networking sites such as Friendster and Myspace spawned entrepreneurial companies who sell their technology to mesh with these sites • something I first saw with eBay. When you get big quickly, you can open the door to others to monetize your community in ways you didn’t have time to imagine.
Of course staying small and niche allows you to know your community better.
For example, VampireFreaks.com (with 750,000 users) offers a premium subscription which will allow you, among 17 other features, to “Create Unlimited Cults.” Now that’s giving your community what they want.
6 Comments
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Dave! said:
That would be “Asmallworld.com” without the “A” you get a sports fantasy site.
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Thor Muller said:
Thanks Dave. I’ve corrected. In fact, that was the editor’s mistake, not Marc’s, who had the original reference correct.
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evbart said:
Calling linked in a social network is a bit of a stretch. Its more like a spam network, always trying to send emails to all of your contacts, not to mention that its too technical to really catch on in the mainstream.
A social network like facebook could build in this functionality in a heartbeat and have a lot more users.
As for monetizing traffic on social networking sites there was a good article a few weeks back on how certain sites (i think it was piczo or xuqa) engaged their users with the advertising more and where able to convert this into much higher revenued. I’ll post it if I find it.
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jon louis said:
a breath of fresh air. i am tired of hearing about myspace and how many users they have, suggesting they are bringing revenues akin to google. how quickly everyone forgets the billions of users supported by friendster, napster, snap.com, excite, homestead, geocities, and dozens of other supernova flame outs that failed to bring in enough revenue to pay the cost of internet bandwidth.
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Mark Wilson said:
An excellent review by Mr. Parrish. Hey, and thanks for the tip on VampireFreaks.com; my old cult site was beginning to get a bit stale.
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Steve said:
…do you think users of Social Networks would pay to use an Audio/Video/Text Chat mod?
