Let’s Discuss:
There are many online social networking sites out there and there are many avid subscribers and users of these networks. As popularity increases, so does the number of new social networking sites. Will these survive on Eyeballs alone?

EMG 30-Second Rundown:
In the television heyday there were 3 major networks which split to four with Fox’s move into the market in 1986. Less competition = more eyeballs. More eyeballs = bigger ad spends. The 4 major networks had an airwave monopoly controlling a popular medium that allowed advertisers to reach into living rooms. In the late ’90s through today, cable and satellite television providers have been adding more channels and splitting those audiences between an ever growing list of channels. More competition=fewer eyeballs. Fewer eyeballs=less revenue per network because advertisers have to split their spends across multiple networks to reach the same number of people. Are we currently witnessing a similar event in the online market space?

Google recently released Google Buzz as a social media platform to cut into twitter’s market share, and all before twitter has released a revenue generation model. Smart business move or is Google diluting their product offerings? We know how Google has monetized their search model. They have a whole slew of services around serving up ads on specific key word searches. Twitter on the other hand does not have a proven revenue model, so how will they endure?

EMG Takeaway:
What are the ways that twitter can make money based around their platform?

1. In page ad serve. Ok, one of the easiest to come up with off the top of my head is serving ads on twitter pages or inter tweet ads. Simple, easy, but questionable in effectiveness. They could serve relevant ads based around tweets, but would you click on inter tweet ads or learn to tune them out after you get used to the format? I would liken these to display ad traffic. Not necessarily the highest converting traffic or the best bang for your buck, but with large volume users, they could probably generate revenue from this model.
2. http://search.twitter.com - Follow a Google model and serve up ads based on search terms on their search feature. This is starting to look a little more promising, but still lacks the wide spread value that Google has. This is because twitter searches tweets and there aren’t as many people searching for products through a twitter search. This approach lacks that critical tie in like the pay per click campaigns have on a Google search where people are actually looking for general products and services.
3. http://apiwiki.twitter.com/Twitter-API-Documentation - Twitter has an api that developers can tap into and pull feeds, but more importantly, set up interfaces to search twitter which makes it one of the biggest and arguably the most powerful social barometers around. It could be an invaluable tool for businesses and marketing agencies to interface with this api to research what the general population is tweeting about. This information becomes more and more valuable as the number of Tweeters goes up.

I have searched around and found many proposed revenue models for twitter and similar social networking sites. There is no way for us to tell exactly how they are going to make money until they actually do, but in the meantime we can use them for entertainment, staying connected, meeting new people and those of us in Marketing can use them as valuable tools in our day to day.

Final words:
The next time you are tweeting or reading someone else’s tweets, jump over to http://search.twitter.com and type in the first thing that comes to mind. Now start searching for terms relating to your business, your clients, your industry. At the very least it is extremely entertaining, but quite possibly a very powerful tool to help you shape your business and product offerings.

Questions for Discussion:

• Have twitter, and now Google, figured out a secret way to capitalize on people boasting their current state of mind and they are just waiting to unleash it on as at a later time, or are we going through dot com boom v2.0?
• Will Google’s Buzz cut into twitter’s market share, pulling people away from twitter and diluting the results of their “societal/cultural barometer”?
• What do you think will happen to the online social networking space as more and more ventures release social networking sites? Will people expand the networks they use, will the strong survive and the rest fail or will interest in social networks dwindle as people become over socialized?
• Will these social networks lose the critical mass that they needed to sell products or assemble the collective conscience that is needed to shape a marketing campaign?

…Only time will tell.