The Problem With Social Networking

Sure, you've heard the buzz. Social Networking is where its at these days. If you believe all the press you would think that everyone under the age of 25 uses one and if you believe the amount of money VC's have thrown into starting different social networks over the past year you would think that its just a matter of time before we have the next billion dollar deal. The truth lies somewhere in between.

People do use social networks but the problem isn't the amount of eye balls or registered users accessing the particular social network, it is the time-old problem of earning revenue (I'm not even going to delve into a discussion about actually turning a profit). Despite what these social networks are leading you to believe they are earning through advertising the reality is they are existing off the venture capital that they received when they funded their initial project. The missing piece of the social networking puzzle has been and will continue to be how to make money.

Some have tried a subscription model forcing users to pay up or to be shut out of the social networks main functionality. This seems like corporate suicide. Two great examples of this are: Classmates.com and Reunion.com. I actually tired out both sites the other day. To Classmates credit they have a promotional period that allows you to use the functionality you went to the site for in the first place. You can email people, view profiles and post pictures. After this promotional period you're out of luck. Until you pony up some monthly cash it looks like your 11th grade girlfriend is going to have to find herself a new classmate to rekindle her fire.

Reunion is even worse. They don't even let you try out the functionality of the site. They just want you to sign up for a monthly fee straight away. And that's the not the worst part. They send you daily messages claiming that poeple are viewing your profile. I know I was popular in high-school but I highly doubt that the minute I posted my profile 5 people just couldn't wait to see what david deutsch was up to these days. This kind of marketing 101 cheezy bullshit is the worst.

But I digress, Social Networking can work. It can earn revenue. But it is going to take some creative thinking on the part of social networks themselves. Mobile is the most likely place for revenue to occur. I'm not talking about WAP either. Mobile internet is a waste of time and doesn't lead to anything but frustration from the users. I'm talking about using sms and mms to enhance the current functionality of the social network themselves and then billing the users of the functionality using PSMS (premium messaging). Think of mobile as an extension of the web version that doesn't require any work from the end user. Comments left on a profile would be delivered to a person's cell phone. Uploading photos, comments, video from your phone to a blog or profile. Chat, IM and communication with your friends simultaneously on the web and on your cell phone without having to download a pain in the ass shitty java application. This is the where social networks should be heading. But, sadly, they are not heading in this direction.

Unfortunately, the Social Networks themselves have bought into the buzz and hype. They have wasted time and money developing WAP based applications that no one will use and no one uses so they can claim that they have a mobile solution. Some have even gone out and built terrible java based applications that a user must download to their cell phone. No one uses these applications and there certainly isn't any revenue to be made from these solutions. It's time Social Networks woke up and looked at a fresh solution that would solve two of their biggest questions...How to keep users engaged when they are not at their computers and how to make money doing it.

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