SMS and Monetizing Social Networks

Online social networks have grown tremendously in popularity since their inception more than a decade ago. Yet, while some social networking companies such as Facebook have huge financial valuations attached to them, it has been difficult to actually monetize the huge member databases collected by some of these networking sites. Globally, and in the United States in particular, a whole generation of kids has grown up accustomed to not paying for Internet related activities including paying for services to connect to peers. Nonetheless, companies are highly interested in reaching people in these network databases in new ways and monetizing the billions of people who are involved in social networking sites. Below is an article on text messaging and how it is beginning to play a vital role in creating financial value for social networking sites. 

http://www.160characters.org/news.php?action=view&nid=2831

Text messaging is now surpassing voice as the preferred way to communicate and many social networking sites use SMS to facilitate communication between members who want to keep abreast of jobs, and peer activities whole on the go. As social sites continue to experience tremendous growth, they are introducing mobile advertising and location aware services by SMS. 

In class, the other day we discussed how many new web companies and services have been created through bundling different technologies or databases available. One example of this is housing maps.com which combines google map technology with the Craigslist database to help users find apartments to rent. In the same vein, it would be interesting if Google Maps technology, text messaging and social networks could be intertwined to create user value. For instance, retailers might send text messages advertising specific promotions through social networking databases which would reach members who, in real time, are using Google Maps to search for a similar retail outlet in a specific location. Once a person receives such an advertisement they might then forward the text message to other friends via social networks which would allow retailers to reach new customers and drive traffic to their stores.