A perpetual motion machine?
In an interview, Kevin Hartz, an investor who passed on YouTube said:
"These businesses are very profitable. They are media properties, they sell advertising but they don't pay for content," he said. "And one of the phenomenons of social networking is that your users are your marketers, and this is very different from traditional business.""In traditional business you spend in some cases tens of millions of dollars to acquire customers and here you have in the case of Bebo, in the case of Facebook, in the case of MySpace, these companies have their own users promoting this so they're paying zero per customer."
"Given that they are not publishing or creating the content themselves, they're not spending money for any editorial staff, given that they're not paying for customer acquisition and marketing, they're just selling advertising space that becomes a very profitable relationship," he said.
So ....
Social networks are not paying for customers.
Social networks are not paying for content.
Social networks are just selling advertising.
Sounds like a perpetual motion machine. However modules adopted and adapted to specific business or personal needs can fuel the opening of new makret opportunities, particularly engaging with new or existing users ondemand and as needed.
