This is a purely editorial post, so I apologize in advance.
It looks like today's class stirred alot of thought - which is good.
But, I keep coming back to the same question centered around the economics. Virtual planet purchasing aside, we know that all of these sites that have no revenue model cost money to start, operate and maintain. Collectively it's probably in the tens of billions of dollars, but the only revenue model I hear being consistently mentioned is advertising revenue. Regardless of how sophisticated the data mining gets, there are only so many advertising dollars being spent. Even if that number increases 100% because of the effectiveness of the advertsing, the number of companies wanting to share the pie grows exponentially.
So, I have come to the conclusion that in very short order the social media bubble will pop. There will be a few survivors (Groupon?, Facebook?) but a majority of companies will go the way of dogfood.com and the rest of the dot.comers. The math just doesn't add up and we all know that math never lies.
the real question to me it whether google will continue to provide everything for free.
ReplyDeleteIf at some point there begins a huge social backlash against personal data mining, then subscription based services might actually have a chance. until then, your right, ill dream of a fortune created elsewhere.
Interesting. That is my major concern. Advertising cannot pay for everything. I rarely look at advertising that pops up. I am desensitized towards it. I can't be the only one.
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