Facebook Missing Out On Profits - InformationWeek
Software // Social
01:26 PM
Moving UEBA Beyond the Ground Floor
Sep 20, 2017
This webinar will provide the details you need about UEBA so you can make the decisions on how bes ...Read More>>

Facebook Missing Out On Profits

Analyst says the social networking site may need to change its business model to remain viable.

Facebook is likely to miss out on profits under its current business structure, according to a recent report.

Analyst Lauren Rich Fine compared the top social network to a local mall and said it may be time for Facebook to "start charging rent" like mobile carriers. The report from ContentNext Media found developers who use Facebook will profit, while the social networking site itself misses out.

"Advertising on social nets will never be commensurate with the amount of time people spend on them," Fine said in a statement released Friday. "And Facebook has made several failed attempts at innovative marketing efforts that members loudly rejected."

The report, which examined the leading social networking sites, documented more than $25.2 billion in social marketing and advertising and investment activity in 902 transactions over the past 27 months. It found that gaming has been the largest subcategory in venture capital investments, drawing more than $800 million.

Fine warned that excitement over virtual currency has been driven mostly by the novelty of it and interest "could come to a screeching halt." She said that the era of merging social and mobile networks has arrived, and social networking sites can succeed by modeling mobile carriers.

However, mobile growth is not a cure-all, according to Fine, who cited concerns about costs and confusion about hardware and added that mobile growth alone isn't enough to drive profits for social networking sites.

The ContentNext Media report, "Following The Money: An Analysis Of Business Strategies And Deal Making In Social Media," is part of a series that examines digital music, online news and political sites, online fantasy sports, Web content-management systems, and online ad forecasts.

Learn about all the latest Enterprise 2.0 technologies at TechWeb's Enterprise 2.0 Conference, Boston, June 22-25. Join us (registration required).

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
IT Strategies to Conquer the Cloud
Chances are your organization is adopting cloud computing in one way or another -- or in multiple ways. Understanding the skills you need and how cloud affects IT operations and networking will help you adapt.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll