We often come across people who've found old friends through Facebook or those who've signed up on Twitter, thanks to the recent uprising in Iran. While the sub scri ption rates and activity on such sites have exploded in the past few years, investors are still struggling to find ways to make money. So what does this mean for the future of social networking sites? Will they become the next giants like Yahoo and Google or will they fizzle away as users eventually lose interest?
When the concept of Social Networking (also called Web 2.0) hit the stage in the early 2000's, the idea of “user-generated content” seemed like a genius’ idea. This led to a huge wave of specialized sites that allowed users to discuss any topic imaginable. Thanks to this movement, you can now search for any topic on the Internet. It's likely that someone has written something about it, which could likely be the answer for which you were looking. This type of content is normally generated from discussion forums and blogs, where specific topics are covered, and have great value for the user community.
One branch of Social Networks became focused on hooking people up to their friends, family, and co-workers, helping them keep in touch. Literally hundreds of such sites were created with various success levels, with Facebook and MySpace having become by far the most popular.
To get people to come back to the sites, they allowed users
to share various information about their photos and videos,
to go to the latest interesting sites they've come across,
to tell others what they were doing that very moment. (This seemed to hit a cord with some users, who started using the sites continuously and created the “viral” effect of getting others onto these sites.)
But there is one problem. As much as these sites have grown in popularity, most still haven't figured out how to be financially sustainable. Of course, the favorite method of the Internet, advertising, seems to be the catch-all answer to all revenue questions. Assuming people will look and click on ads, the fundamental assumption is that people will keep coming back to these sites. As unlikely as it may seem today that people will stop using Facebook and Twitter at some point, there are some simple factors that could change that in the future.
For example, at some point the users will realize the potential liability of sharing their whereabouts and other personal information with others. Simple information like birth date, city of birth, and family relations could be easily used for the wrong purpose. Only one high-profile incident is needed to bring the public's attention to these potential liabilities, turning them away from using such sites so liberally. Once that happens, sites like Facebook and Twitter will not only lose significant activity levels, but could also become a symbol of why some of this technology could be harmful.
Another weakness of these sites is their “time sink” factor. Unless you have a lot of spare time on your hands, reading through the journals of what all your contacts are up to, may not be the best use of time. At some point, when the novelty wears off, usage levels could suffer significantly, again hurting these sites.
For now, we'll watch and see how this whole phenomenon unfolds, and whether in five years we'll be talking about Facebook in past or present terms!
