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What does the search for profits mean for the future of social media?

2 min read

Social Media

We always knew it would come to this: The big four social networks are starting to get serious about making money. It makes perfect sense — after all, they can’t live off of venture capital forever. They’ve got server bills to pay, investors to pay back and growing staffs to support. And the business model that will cover all that is … what, exactly?

Here’s the problem: Web culture has evolved in such a way that questions of revenue are inherently gauche. I don’t know about you guys, but I wouldn’t pay to belong to a social network — at least not a general-interest network like Facebook. Some of the networks run ads, and those are OK, sometimes — as long they don’t take advantage of social media’s unique properties in a way that invades our privacy. Twitter is eschewing ads entirely, claiming that deals with Google and Microsoft make it profitable — though I’ve always been a little skeptical of those numbers. What does that leave us with?

  • Virtual property. Think Facebook gifts and social gaming. Nice, but I’m not sure how much growth potential there is, especially five years down the line when we’re all a little sick of virtual roses on Valentine’s Day.
  • Using social networks as a marketplace. Facebook is already working on setting itself up as a transaction hub. This could allow it to make money off of transaction fees. I worry this will make the network too commercially focused, however, and kill all the social fun.
  • Tiered networks. Offering special features for people who are willing to pony up the dough, such as companies looking to use a network for marketing. This has a lot of potential, especially when you consider that businesses using social networks for marketing want different features from everyday users, anyhow.

Or maybe they’ll come up with something really new and different that I can’t even begin to imagine. No matter what they choose, I feel like we’re coming to the end of an era. Whatever revenue plan the networks devise will fundamentally alter the user experience. We’re living in the last days of the digital free lunch.

How will efforts to monetize social media change the user experience? How will users respond to these changes?

Image credit, Andrew Johnson, via iStock