I came across this article (http://adage.com/madisonandvine/article?article_id=136617) of how Vitaminwater is linking up with MySpace Music to offer free mp3 downloads for the people who buy their new line, Sync. It's great news for drinkers of Sync and serves as a very effective campaign for Vitaminwater, especially with the large following in MySpace.
However, if you read the article a little further, it actually goes into the large question that social networking sites face. How do we monetize them? Labels who've invested in MySpace music is frustrated that even though there are 27 million unique visitors, those who actually download music are few and far between. (which also goes to what we learnt in class: What metrics should we really use to measure performance? The number of unique visitors is impressive, but it's not drawing in the $$...)
Even in a recent interview with Fortune magazine, both the Facebook founder and Chief Operations Officer (whom used to work at Google), acknowledged openly that they have no idea how to effectively monetize the sites. What was weird to me was that the venture capitalists are not in a hurry to get their return on investment as well.
I'm pretty sure there are monetization opportunities (advertisers, sale of apps, games), but the key challenge is for the users (like us) who'd pick up the tab and use them. Till they reach a critical mass of paring-users, it may seem that it would be very far down the road before the money comes in for them.
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