Imcparsons’s Blog


Social Networking- Is it an effective medium for marketing?
October 28, 2008, 3:15 am
Filed under: Uncategorized

Prior to reading several of the discussion posts, I had eliminated social networking from the running as the most effective new media. I do equate it with advertising, but not in the sense that my classmates had mentioned, word of mouth advertising/marketing. I think word or mouth may be better paired with blogging. In the social network arena, it seems that people tend to talk about themselves, their friends, families, events, pictures, activities and so forth. Blogging is the electronic soap box from which people can stand (type) and preach their good and bad experiences about anything. These word of mouth scenarios have the potential to be heard by a lot more people than a wall post or message sent within a social networking site.

 

Interesting Information:

 

MySpace

 

  • Since it scored a $900 million, three-year deal with Google in 2006, MySpace has been profitable. And it has given News Corp. a nice turn on its $650 million acquisition in 2005; Richard Greenfield, an analyst at Pali Capital, expects MySpace to haul in $700 million to $800 million in revenue in fiscal 2008, mostly in advertising.
  • Driving a good chunk of sales is a project launched last summer called HyperTargeting, software that mines the profiles of MySpace users to deliver ads tailored to their interests.

 

 

Facebook

 

  • Despite some hand-wringing over its fate, Facebook stacks up well compared with Google at the same juncture in its history.
  • Facebook hopes to double its revenue to $300 million to $350 million this year, its fourth of existence. Google’s revenue soared fivefold, to $440 million, in its fourth year.
  • The 70 million-member network has ramped up revenue with the sale of banner ads through an agreement with Microsoft, targeted-ad programs for local businesses and the sale of virtual gifts. Those gifts, such as a birthday cake or a popping cork of champagne, are affixed to a user’s profile in the manner that someone would sign a high school yearbook.
  • “We believe there will be a diversity of revenue — with brand-name advertisers, local advertisers and direct-response advertisers,” says Chamath Palihapitiya, Facebook’s vice president of product marketing.

 

 

LinkedIn

 

  • The business-contact site has built a booming business in five years through banner ads from the likes of Porsche and Microsoft; subscriptions; job postings charged to corporations and small-business owners; and corporate sales to Symantec, MTV and others. LinkedIn is developing other revenue streams, including research services to locate experts.
  • “It is a global, interconnected world, and we are the one professional network,” says CEO Dan Nye. The 250-person company boasts 21 million members and is adding 1.2 million per month.
  • Social-networking site Bebo, recently acquired by AOL for a knee-buckling $850 million, is parlaying its popularity with a predominantly young audience — many are 13 to 24 years old. It has struck up marketing initiatives with advertisers such as Nike and Apple, says Ziv Navoth, vice president of marketing and business development at Bebo, which has 43 million users. That is a key reason it has been profitable the past 18 months.

 

http://www.usatoday.com/tech/techinvestor/industry/2008-05-11-social-networking_N.htm