Social Network Business Models

Social Network Business Models: Posts on the Alternatives

Entrepreneurs are exploring various social network business models, and the jury is still out on what works best.   This page brings together posts from this blog on the general topic of online business models, and on specific business models used by a niche social networks.

Social Network Business Models Generally

Loayza’s Online Business Models for Social Media Startups
Those he lists are “freemium,” affiliate, subscription, advertising and virtual goods.

Sources of Revenue for Your Niche Social Network: Ideas from Get Rich Click
I spent a long summer weekend reading Get Rich Click: the Ultimate Guide to Making Money on the Internet, by Marc Ostrofsky.  It’s a wealth of information on various revenue options and how they work.

What Are Business Models for Making Money Online?
Here’s a link roundup on alternative business models for making money online. The posts discuss issues like revenue potential, what it takes to succeed, and sample sites using these techniques.

Top 8 Ways to Generate Revenues from Social Media
According to Abrams Research, the top three are freemium, targeted ads, and research from polls and surveys.

How to Start a Social Network Part 2: Business Models and Revenue Streams
I’ve rounded up links to alternatives from pros and others. I’ve briefly listed the main revenue sources or summarized content of the links.

How to Start A Social Networking Website Part 16: Report on Revenue Streams
Key findings reinforce what we already know: advertising and subscriptions are the main revenue models for content-based sites.

Valuation Lessons from the Linkedin Bubble Controversy
In his New York Times article Waiting for Gravity to Hit Linkedin, James Stewart describes valuation methods that niche social networking sites should recognize.

Advertising Business Model

Niche Social Network Advertisers Drawn to Desirable Income Profile
Niche social network advertisers are hard to land.  Here’s one niche site that has signed partnerships and sponsorships with brands like Wells Fargo, Fiat, David Yurman, Saks Fifth Avenue and General Motors.

Ad Revenues for Social Networks to Hit $10 Million in 2013
eMarketer has some good news for those using the ad revenues in social networks.

Social Network Ad Revenues Expected to Reach 3 Billion
Ad spending in social networking websites grows.  According to eMarketer, “US marketers will spend $3.08 billion to advertise on social networking sites this year.”

How to Start a Social Networking Website Part 9: Adsense, Ad Networks and Direct Sales
Since the revenue model of most niche social networking websites is advertising, you’ll want to understand how ads work on such sites.

Ad Revenues Alone a Problematic Business Model for Online Businesses
Talking about the music industry, today’s Times says “…startups have come to realize they cannot rely on Web ads to support themselves.”

Can You Wait for Ad Revenues from Your Niche Social Network?
The ad dollars are not coming into social networking sites as planned. “MySpace Might Have Friends, but It Wants Ad Money” says Brian Stelter in the New York Times of June 16th.

Advertisers and Niche Social Networks
Blogger Blaise Nutter last month gave big advertisers “5 Rules for Marketing in Niche Social Networks.”

Products, Services and Referrals Model

Alternatives to the Ad Model
“The best way to make money as a content producer is to do direct sales….Overall, though, bloggers, podcasters, video producers and distributors should look at what other assets that they have which contain value aside from the content and the attention.”

Joost Expands Business Model Beyond Ads to Licensing
While it will continue to give users free TV programs and movies, the company now says it will focus on licensing its video platform to other broadcasters and media companies.

Freemium Model

How to Start a Social Networking Website Part 12: Against the “Freemium” Biz Model
Steven Hodson of WinExtra posted Is Freemium Really the Way to Go to raise questions about the viability of the business model that says, give away things for free with ads, and then charge for premium services. His post gives the history of the “freemium” model, plus examples and quotes from proponents.

Demise of the Business Model of “Free”? Are Freemium and Micropayment Revenue Models the Future?
I’m mulling over online business models and free content today.  Two thought-provoking posts about fundamental changes in 2008 sent me down this path.

Free: The Future of a Radical Price — Chris Anderson on Free as an Online Business Model
How can online businesses with digital content survive if “free” is the reigning business model?  Chris Anderson, editor-in-chief of Wired,  tackles “free” as a business model in his latest book Free: The Future of a Radical Price.

Membership and Subscription Business Models

Membership Websites: Description and Profitable Topics
What is a membership website?  And what niche should you choose if you want to build a profitable membership-only site?

Subscription Model for Online Business
 “I think subscription models work best in two instances,” Dahl said. “Where the product is a necessity or when it’s an absolute passion. It stops making sense when you try to do something like a tree-of-the-month club, which doesn’t fit either of those categories.”

Deals and Discounts Model

Online Deals and Group Discounts as a Business Model or Revenue Stream
Groupon promotion of online deals is getting press all over the place in the last couple weeks.  And they have an interesting and profitable twist on coupon advertising.  They offer individuals the opportunity to participate in group discounts for very short-term offers if a minimum number of people sign up.

Virtual Currency and Virtual Goods

Virtual Currencies and Virtual Goods — Definitions and Revenue Streams in Social Networks
In the excellent video Virtual Currency in One Hour, Second Life’s Chief Product Officer Tom Hale shares insights about the rationale for virtual currency and virtual goods.  He also explains consumer behavior as it relates to virtual goods and describes the Second Life economy.

Virtual Goods in Social Networks — Alternative Business Models
In this super video on Virtual Currency in One Hour, Tom Hale of Second Life describes three advantages of virtual goods for website owners:

Virtual Goods in Social Networks: Examples of Facebook, Twitter and More
What are examples of the use of virtual goods and virtual currencies is social networking websites?

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