Rapid Graffiti

Term 4 ended yesterday.  I’m done with all the submissions, papers, presentations and report.  Would be leaving for Bombay tonight, and then to Ahmedabad on 30th  September.  As I write this, the other sites open on my system include gmail and orkut.  Btw, orkut is a social networking site, a part of google.

Social networking (SN) sites are on the watch list.  News Corp. acquired Myspace, the most popular social networking site.  Facebook is another popular networking place.  Orkut is way behind.  Sometimes I wonder what would be the business model of these sites?  Are ad revenues enough to sustain?

Myspace signed a deal with google where the latter would sell myspace’s ad space.  The deal is worth around $800 mn.  But is it worth spending for ads in a social networking site?  There are millions of users spending lots of hours on myspace and orkut.  85% of college students are registered on facebook.  People visit there to socialize, and find old friends.  A typical SN site collects a lot of data about the user, and hence would know about her tastes and preference.  You can segment the users on the parameters of your choice.  You can place dynamic ads that change with the target.  You can also track user’s activities and find out more about her.  So, logic says that it is worth spending on ads on these SN sites. 

But I have my own doubts.  Why would I click on ads? I mean why?  I’ve used google search for a million times but have clicked on an ad just once.  I probably do not even look at the ad.  Why would I?  Moreover, 61.38% users on orkut fall in the age group of 18-25.  Facebook is targeted at university students, and myspace wants to position itself as a hang out place for youth.  What’s the purchasing power of these users?  My take is students and Uni students would not click on an ad or a banner unless it is free or highly innovative stuff.

So what’s the future of SN sites? Well, some old sites like friendster, etc. have started focusing on working youth with reasonable disposable income.  Some have started focusing on niche areas.  The latest is dogster which focuses on user’s pet.  Not that this would ensure their sustainability, but they’re surely trying something new.  For the regular SN sites, their fate might be same as instant messengers; only the early movers and the biggies would survive.  Yahoo, MSN, icq, are surviving, I don’t see indiatimes messenger or rediff bol anywhere. 

Watever happens, m still gonna spend my daily hour finding friends on orkut.