Social networking sites like Facebook, MySpace has a list of loyal fans, but these companies are not able to mint money through it. MySpace’s projected huge revenue in 2008 falls far short of parent News Corp’s sales target. Twitter even tough has acclaimed wide spread popularity yet it does not have a business model.
The social media companies were hoping for the best to happen with the advent of web 2.0 but unfortunately for them the last year has been a big disappointment as far as financial earnings were concerned. Web 2.0 has no doubts reformed the way we use the web but it has not been successful in making the companies earn much from it.
One of the reasons for this is that the present economic conditions of the web are chiller than the first dot com craze. In the past year only 6 companies from U.S. went public thus shutting the door for any initial public offerings. Another reason is that the ads displayed on the social sites such as facebook are most of the times ignored by the user as they are engaged in seeing pictures or messages from their friends. For this reason only, Yahoo news can charge as much as 30 times more than facebook for putting the banner ad.
Hence, no doubts that Facebook and MySpace and other similar websites will be able to grow up economically but not as powerfully as sites like Yahoo or Amazon or Google for that matter. Amazon started out as only an online bookstore but now it has covered almost all the products for online shopping. So is the case with Google which started out as a search engine and now has a major share in several other fields as well. It is for sure that the web 2.0 design boom would be at stake with a new web technology coming into being.
