Business plans for new social media sites (2008)
There has been a lot of articles lately about the business plans of all the new social networking / new media sites.
With the economy the way it has been lately, it’s no wonder that those with poor business plans are failing and criticism is high.
Twitter is receiving a lot of criticism lately for its lack of a coherent business plan.
New media and social media businesses are no different than any other business – the sites need to make money. Unless you develop an open-source site and tinker on it for a hobby, we all need to pay the bills.
Rafe Neeldman of CNET wrote an article after his sit down with COO Martin Green of Meebo, and asked him about their business model.
Meebo is a site that combines AIM, Google Talk, Yahoo and MSN chat services into one. I logged onto the AIM window with my .me account and it worked as well.
Meebo gets its revenues via click-through advertising like Google and, Green says, only works if you have high volumes of people. Green’s comment was that he reaches ‘tens of millions of users’ and that it was big enough to matter.
So moral of the story for smaller businesses is that click-through advertising works great if you have mass amounts of traffic coming through. If you’re a small time operator, you may want to find another method.
He also did another story with a short video on venture capitalists who were giving advice to those in the industry in order to survive the economic downturn.
Personally, I think there are way too many of these sites out there and think we could use some weeding out. I’m cross-posting daily snippets of info on Utterli, Tumblr, Twitter, and Pownce and fully expect some of those sites to go under at some point. The only thing Twitter has going for it now is name recognition, but name recognition alone won’t cut it unless they find a way to monetize.