The Looming Ice Age for Social Network Giants - Profy.Com

The Looming Ice Age for Social Network Giants - Profy.Com: "With Facebook just overtaking MySpace in the social networking supremecy race, many believe things are pretty good for the two top dogs. However, there are those that believe hard times are ahead for the big networks, as smaller and more focused networks steal the attention and affections of advertisers.
  • More focused networks
I read a post the other day by Om Malik on the direction of advertising on social networks that really caught my attention. As Malik sees it, there are a few factors that will contribute to the inevitable downfall of the big social networking players.
  • Advertising in Social Networks
First, new traffic to sites like Facebook and MySpace is beginning to plateau; the remaining growth to such sites is coming largely from users outside the United States, but that is a relative trickle of growth in comparison to the huge adoption the sites experienced from within the U.S.
  • Facebook and MySpace aren't growing anymore
  • Growth for social networks comes from abroad
A second problem for the large networks is that advertisers are having a hard time monetizing the massive traffic revenue such sites demand. Obviously, the ad revenue has to come from somewhere, and advertisers are finding that 'targeted' ads aren't really panning out on the mainstream networks like they anticipated. For smaller networks or websites, it isn't a huge loss if viewers aren't constantly following advertisements; however, when millions upon millions of users ignore advertisements, advertisers struggle to generate the funds to pay for the huge traffic. Google is one of the only companies that might easily pay the huge bills, but I wouldn't count on Google writing Zuckerburg blank checks anytime in the near future."
  • How can advertisers monetize the massive traffic revenue the sites demand
  • Are targeted ads paying off?
  • Millions are ignoring advertisements
  • Advertisers struggle to generate the funds to pay for the huge traffic
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