- 14
- Nov
As the number of Web 2.0 companies cut back or shut down in the face of the economic downturn, people who pay attention to technology driven business models have been taking notice. In a recent post on its blog, Gartner, the pre-eminent technology market research firm, suggests that the problem will accelerate unless these companies, led by the social networks, can figure our how to make money, not just gather a crowd.
At a recent session at Stanford, three founders/CEOs of emerging social networking companies, Seesmic, FriendFeed and Pownce repeated the same line. As if by rote memorization, social networking execs answer the business model question with one word: advertising. But none seem to have come to grips with the essential contradiction. The supportive collaboration that draws and binds a social community runs counter to the monologue of advertising.
That is the nut which needs to be cracked. Can social networks make advertising relevant to the individual, transparent in its message, supportive of the group and meaningful at the moment? We have a lot of examples of attempts gone awry (e.g., Facebook’s Beacon), but few to balance the ledger.
Advertising can’t be bolted onto a social network. It has to arise from the interests of the members. And, rather than continue to deploy increasingly intrusive monitoring technologies (BT, anyone?), it may be time to revert to what has always worked best: just ask.
My personal and commercial two cents.




