Social Networking Update: Show me the money

I hope you had a chance to read the article in the June 2 edition of BusinessWeek. The headline, Beyond Blogs, really caught my attention.

Back in 2005, an article about blogs was written calling them a "phenomenon" and the next big thing for businesses to communicate. I started this blog in February of 2005 and I remember thinking that it was really quite an amazing feeling, especially for someone who built a business on traditional communication like TV commercials and infomercials.

It took about 10 minutes to set up an account and suddenly the world was mine. I became a global publisher.
Flash forward to 2008 and blogs almost seem quaint in this day of YouTube, Facebook®, MySpace®, Twitter, Linkedin® and Flickr.

BusinessWeek reports that a check on Technorati.com shows there are about 74 million blogs out there, which sounds like a huge universe. The magazine also reports that only a fraction of all bloggers have posted within the last couple of months. According to Technorati™, the real blogging universe is just over five million regular bloggers.

Some blogs have an audience of just a few people, while others have a few hundred; very few blogs have audiences in the hundreds of thousands. The latter are digital movers and shakers, influencing public opinion from arts to politics.

Enter the social networking sites. BusinessWeek is quick to admit it's something they didn't see coming. As fast as our digital world is evolving, I don't blame them.

Along with this blog, I have my Linkedin and Flickr sites. And with a business to run, it's a challenge to find time to post a blog every week and keep my other sites current. So for me, it's enough. Many Video Professor® employees blog, maintain their social networking sites and various departments post their own news and information online.

It's becoming a big business. Newscorp paid $588 million for MySpace. Google® spent $1.65 billion for YouTube. Even in this uncertain economy, venture capitalists are pouring in money and buying stakes in hopes that it's the next big thing.

This is eerily reminiscent of the tech bubble of the late 90's. Gobs of cash were being poured into online ventures that didn't produce anything, or earn anything. Talk about crash and burn.

BusinessWeek warns that the business plans for many of these sites remain blurry. Wall Street likes to get answers to pesky things like expenses and revenue, and not projected numbers, but the real deal.

These sites are so popular with the masses because they're free. If you go to many of the sites you won't see a lot of ads, or even links to ads. So much for the revenue part. BusinessWeek predicts this bubble will also burst. Ultimately it's all about revenue.

I predict social media 2.0 will find a way to live and prosper. Now that so many millions of us have been empowered to communicate from our desktop to the world, there's no stopping us.

-John
John W. Scherer
John is CEO & founder of Video Professor, Inc.
You can reach him at ceo@videoprofessor.com