Social Networking Cash Cows & Supernova Conference.

I'm heading to the Supernova conference next week if anyone else is going say hi…

So myspace is earning upwards of 18 million a month,   bebo  certainly earns far more per user then myspace and its rising fast.  It seems that everyone and their dog wants to create a social network now that Online dating is facing negative growth.    Dating sites like lavalife want to build a social network around interests,  match.com experimented a few times and many others like tiny free sites are trying to bring in blogs, forums etc.

Half the dating sites are trying to become "social networks"  unfortunately that doesn't work if your focus is dating you have to be one or the other.    The other half are trying to become Niche players,   but niche dating sites like black singles etc will just get overrun by the social networks once they get their infrastructure stable enough to upgrade their searches. 

Seems yahoo offered facebook  $1.4 billion and they turned it down because they wanted 2 Billion,  They were making over a million a month less then a year after launch.  These companies don't have much in the way of revenues but have HUGE valuations, I wonder how many big buyouts are going to happen as big media players want to buy their way into the market.

14 Responses to “Social Networking Cash Cows & Supernova Conference.”

  1. Gopi Says:

    Facebook at present is not fully monetising ,they can make some serious dough by selling some targetted high ticket items like say student loans etc… But still a 2 billion dollar valuation is absurd, IMO a year from now they will regret passing the yahoo offer…

  2. Just Call me X Says:

    Howdy,
    So, are you saying that social networks are the way to go? Or that neither social networks nor dating sites are the right thing to do? If its neither, what should someone trying to be like you within a few years build?

  3. timethief Says:

    Thanks for identifying yourself and what you do Markus.:) Thanks also for this blog. Your posts are cutting edge, interesting and thought provoking. Now that’s winning combination that could account for your stats. hmmmm or is it the viral marketing of this site that accounts for them. Or maybe it’s your good looks and charm? So tell us the truth hottie: Are you taken? … lol … maybe the ladies are hot on your tail I mean trail and that’s explains the stats … lol
    cheers

  4. Markus Says:

    Most student loans are made before people go to college, so the student loan market isn’t really that big yet it represents a big possible revenue stream.

    At this point who knows what the way to go is? Social networks and dating sites are extremely expensive to run, but as tech costs fall the profitability will go up.

    At the end of the day movements like social networking that achieve the highest market penetration are the ones that win. I think at this point its pretty obvious that social networking will over run a lot of categories like dating but what isn’t obvious is what the end result will be.

  5. Just Call me X Says:

    Markus,
    Thanks a lot for the responce. Can you answer just one more question for me. If you had to start over now, from scratch, what would you build?

  6. Markus Says:

    A free adult dating site, and upsell to porn sites and AFF and sexsearch. A site like that has viral growth of a social network and 100 times the earning potential.

  7. Martin Says:

    I really don’t think an adult dating site can be viral. While I would show my regular dating profile to my friends (viral = I tell my friends to join, they will try to find me), I suppose people with dicks/pussies on their profile photos won’t tell anyone.

  8. paowiee Says:

    I never really knew myspace earns $18 million a month! From where I come from, Friendster.com rules

    I wonder how much friendster earns in a month? Is it also big there in the US?

  9. Shanti’s Dispatches - Facebook Turned Down $1.4 Billion Acquision Offer? Says:

    […] A company doing only a million a month in revenue turns down an offer for $1.4 billion. […]

  10. justthefacts Says:

    Markus – Love how you cut through the BS in your posts. Question about social networks, whenever asked they don’t disclose whether they are profitable. This is usually a sign that they are not. As you mention they are xtremely expensive to maintain, especially a site like MySpace which is basically turning into a publisher with its focus on creating its own promotions, sections for Comedy, Books, etc. Do you think any of these sites are really profitable? Is a free ad-supported social network really a sustainable model?

  11. Markus Says:

    Well, most of the costs seem to come from infrastructure. But with the cost of hardware falling fast these unprofitable beasts of today will be the cash cows of tomorrow.

  12. Tayfun Says:

    The value in social networks is people are not embarrassed to use them. It is much more socially acceptable nowadays to be on a social network rather than a “dating site”. A lot of people see joining a dating site as last resort sort of thing.

    This is not necessarily my perception by the way.

    The value in facebook comes particularly from its untapped advertising potential as someone earlier suggested. They have a massive database of people whom facebook knows nearly everything about them, their interests and the kind of people they hang around. Not only this, but its not just some opt-in spam list this is a service that people are happily using. That kind of advertising potential is invaluable to a major media player. Facebook is waiting for that major media player to invest.

    Murdoch bought myspace for just under 600 million then sold the advertising rights to google for 900 million from memory?

  13. adultdate365 Says:

    I have too many favorites. I can’ t pick one all time favorite. As a child I kept rechecking out the different colors of fairy books- “ The Red Fairy” book etc. As an adult my favorites are even harder to pick. “ Good Omens” by Neil Gaiman and Terry…

  14. Flirt social network - Online Dating or Social Networking? | Flirt-Coach.net Says:

    […] an alternative technique for getting dates, it’s certainly making a difference. On The Paradigm Shift, Markus Frind, owner of plentyoffish.com, writes that the online dating industry is experiencing […]

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