Profiting from social media

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It seems like a long time since Internet startups thought they could offer a free product and make a living selling ads. That would be in 2004, during the birth of Web 2.0.

Suggested is the incredible pace of change in the Internet’s evolution. In its own historical scale, that moment would be equivalent to the Renaissance: the Dark Ages of the dot-com bubble was past, but superstition still at times superseded reason.

To wit, the mantra was: “Build a community of users first, monetize later.” How far we’ve come.

“This is very clear now. It wasn’t clear until a while ago.” Though the Web is filled with free tools that let people talk, share content, and offer advice, few of them make money. Twitter, the social network where people communicate in 140-character bursts, is the most famous among them. Though it boasts millions of users and continues to grow at a cheek-rippling rate, it has yet to make a dime.

Its leaders said they won’t display ads on the service, and they won’t ask its users to start paying for it.

But they’ve hinted at a revenue model that is becoming increasingly popular with new startups in social media: Charge the companies that use it as a marketing tool.

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