Monetizing Social Networks

Hey Internets

Well I stumbled onto a pretty good article about the monetizing of social networks. Its a really good article showing how companies, like Google, are having issues in making money through social networks.

In my opinion I have always thought that monetizing social networks would be hard. You have to consider the fact that the majority of people ignore ads on any website. Currently I find that the only social networks that may be making money are places like Digg. They have a tech savvy social network of diggers that love having the newest gadgets. Digg's ads consist of tech stuff which many in their social network actually have interest in. Even I admit to being drawn in by flash animations of big screen flat panels.

The problem with social networks is that the people aren't cohesive in wanting some kind of product or service. Social networks like Facebook and Myspace have very diverse crowds that all want different things. Although Google has already made an algorithm to match an individuals interest to ads, they still aren't making ground. People aren't on social networks to buy anything. They are just there to have fun and make connections. So in companies like Facebook, ads are not money makers because they don't attract the audience well enough. I really wonder if the investment of companies such as banks to put advertisements on the news feed of Facebook have really drawn in customers or have even given a return on their investment.

Looking at my Facebook now the only ad I see is a job offering for junior college students for $8 an hour. I know I'm a broke college student but $8 doesn't sound like much to me. Another time I was on Facebook it had ads about offering dating services to me. Well I have a girlfriend and I don't think that would sit well with her.

In any case the problem with social networks right now is how to monetize them. Currently there are only 3 ways of monetizing anything on the internet.

-Advertising
-Membership Fees
-Donations

So the race is on. Facebook, Myspace and individuals alike are now racing to be the first to truly monetize the social network phenomenon.

Whats your opinion? How would you monetize social networks? Will social networks work or will this internet phenomenon meet its demise?

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