Actually I was quite thrilled and excited when I heard about the MySpace and Facebook kind of social networking applications/wesites. But now, it is kind of worrying that the concepts of social networking will also fallback to the same concept of selling dog food online! More and more social networking websites and applications are developed without any sound business model and consumer model will certainly collapse the entire business/industry once again as same as Web 1.0
Lately there are more number of social networking apps/websites are floated to inherit the existing consumer base by linking with their apps with – Facebook, Myspace, etc., etc., The applications developed are not sound enough to attract the consumer and does not provide any value add to the online advertisers, the de-facto business model. I think it is just a linear extrapolation of the existing stuff.
Social networking is for connecting people at various levels. Generally, people come to the site or associate with the site to look for people rather than looking for buying stuff. If the consumer is not looking for buying stuff what is the value provided to the online advertisements (Business Model). If it does not provide any value how it will sustain and grow? It cannot be compared with Television, where consumers are not looking for people connections. It is an entertainment device and it PULL people to watch the ads whereas in the online it is a PUSH model, which does not guarantee that the consumer ever click your advertisement, hence no value to the advertisers.
Check this article on online advertisement - Who clicks on ads? And what might this means?