Monetizing Social Networks


Businessweek has an interesting story about the challenges of turning Myspace into a cash cow.

Murdoch's challenge is to transform the Web phenom into a digital media powerhouse capable of richly monetizing eyeballs without driving off the very users who made it popular. Even MySpace executives concede they're winging it. "I don't think our monetization strategy will be a prize-winning Harvard Business School study," says Jeff Berman, general manager of a new MySpace TV unit.

The question in the back of my mind is this… as content on the Web explodes, will there be enough advertising dollars and enough return on those dollars to justify the money spent on sites/tools/content? Media margins have been high in large part because the ROI is sometimes difficult to measure. Will that change? For all the talk of "long tail" economics, the web could end up just like the movie industry, where only blockbuster sites make good enough investment returns.