Comments on: More detailed analysis of social network value on Techcrunch http://andrewchenblog.com/2008/06/23/more-detailed-analysis-of-social-network-value-on-techcrunch/ Essays on viral marketing, freemium, and social gaming Sun, 30 Oct 2011 02:46:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Roger Guess - SilverlightAddict http://andrewchenblog.com/2008/06/23/more-detailed-analysis-of-social-network-value-on-techcrunch/comment-page-1/#comment-86 Roger Guess - SilverlightAddict Wed, 09 Jul 2008 19:42:03 +0000 http://andrewchenblog.com/2008/06/23/more-detailed-analysis-of-social-network-value-on-techcrunch/#comment-86 <p>Andrew,</p> <p>I realize MiniClip does not quite fit the model being described. However, with their 40 mill + unique users, you think they would make the chart? They definately have a different kind of twist on the whole "a pageview is not just a pageview".</p> <p>Thanks,<br /> Roger</p> Andrew,

I realize MiniClip does not quite fit the model being described. However, with their 40 mill + unique users, you think they would make the chart? They definately have a different kind of twist on the whole “a pageview is not just a pageview”.

Thanks,
Roger

]]> By: Ethan Bauley http://andrewchenblog.com/2008/06/23/more-detailed-analysis-of-social-network-value-on-techcrunch/comment-page-1/#comment-85 Ethan Bauley Tue, 24 Jun 2008 19:33:40 +0000 http://andrewchenblog.com/2008/06/23/more-detailed-analysis-of-social-network-value-on-techcrunch/#comment-85 <p>Andrew, I think both your and Mike's models are excellent, necessary, and useful tools, but...</p> <p>Can we take a step back and ask some questions about the value of interstitial advertising in online social networks?</p> <p>Is the "holy grail" really limited to targeted, relevant ads? A marginally optimized version of the broadcast TV?</p> <p>If the holy grail were achieved, doesn't it logically follow that online social networks would become a pastiche of advertising? "Oh, look at all these great, relevant ads! More, please!"</p> <p>Wouldn't this completely upset the point of social networks, which is to lower interaction (nee' "transaction") costs among users?</p> <p>(i.e. there's a very strategic, economic reason Google forgoes billions in revenue to keep the homepage ad-free)</p> <p>Is the value of these services really limited to how much money they can squeeze out of a revenue model that is severely handicapped in a world of cheap communication?</p> <p>I think that these services, with their current user bases, have the potential to be worth far more than these models would indicate.</p> <p>I apologize for asking these questions and not proposing suggestions for a better valuation model. I will say that I think there is something much deeper in the idea of "social networks lowering interaction costs among users" when you think of "people who work at companies" as users. (GetSatisfaction.com would be something that is getting at this)</p> <p>I'd also offer that these organizations resources would be much better spent trying to reinvent what advertising actually is instead of optimizing a revenue stream with such limited potential. I know there's a ton of money in going from a .3% conversion to a .7% conversion...but seriously folks, is this the best we can do?</p> <p>I'm very very much in favor of quantifying things and demanding sustainable business models, but I think it would be a shame if the potential to reinvent marketing has to get punted from MySpace to Facebook to the next social network...</p> <p>It can't just be buying placements in the News Feed!</p> <p>Thanks,</p> <p>Ethan</p> Andrew, I think both your and Mike’s models are excellent, necessary, and useful tools, but…

Can we take a step back and ask some questions about the value of interstitial advertising in online social networks?

Is the “holy grail” really limited to targeted, relevant ads? A marginally optimized version of the broadcast TV?

If the holy grail were achieved, doesn’t it logically follow that online social networks would become a pastiche of advertising? “Oh, look at all these great, relevant ads! More, please!”

Wouldn’t this completely upset the point of social networks, which is to lower interaction (nee’ “transaction”) costs among users?

(i.e. there’s a very strategic, economic reason Google forgoes billions in revenue to keep the homepage ad-free)

Is the value of these services really limited to how much money they can squeeze out of a revenue model that is severely handicapped in a world of cheap communication?

I think that these services, with their current user bases, have the potential to be worth far more than these models would indicate.

I apologize for asking these questions and not proposing suggestions for a better valuation model. I will say that I think there is something much deeper in the idea of “social networks lowering interaction costs among users” when you think of “people who work at companies” as users. (GetSatisfaction.com would be something that is getting at this)

I’d also offer that these organizations resources would be much better spent trying to reinvent what advertising actually is instead of optimizing a revenue stream with such limited potential. I know there’s a ton of money in going from a .3% conversion to a .7% conversion…but seriously folks, is this the best we can do?

I’m very very much in favor of quantifying things and demanding sustainable business models, but I think it would be a shame if the potential to reinvent marketing has to get punted from MySpace to Facebook to the next social network…

It can’t just be buying placements in the News Feed!

Thanks,

Ethan

]]> By: Matt http://andrewchenblog.com/2008/06/23/more-detailed-analysis-of-social-network-value-on-techcrunch/comment-page-1/#comment-84 Matt Mon, 23 Jun 2008 21:55:17 +0000 http://andrewchenblog.com/2008/06/23/more-detailed-analysis-of-social-network-value-on-techcrunch/#comment-84 <p>I'm not sure why international traffic always gets a negative note. Don't most brands sell internationally and want their brand awareness to increase?</p> I’m not sure why international traffic always gets a negative note. Don’t most brands sell internationally and want their brand awareness to increase?

]]> By: Hussein Fazal http://andrewchenblog.com/2008/06/23/more-detailed-analysis-of-social-network-value-on-techcrunch/comment-page-1/#comment-83 Hussein Fazal Mon, 23 Jun 2008 17:38:04 +0000 http://andrewchenblog.com/2008/06/23/more-detailed-analysis-of-social-network-value-on-techcrunch/#comment-83 <p>As I mentioned earlier - just like most people could predict that facebook would pass myspace in terms of unique users, it is equally obvious that the same will happen in terms of advertising dollars. Reason being that the non-US Internet market is growing and maturing at an unbelievable rate, and the advertising dollars will soon follow. </p> As I mentioned earlier – just like most people could predict that facebook would pass myspace in terms of unique users, it is equally obvious that the same will happen in terms of advertising dollars. Reason being that the non-US Internet market is growing and maturing at an unbelievable rate, and the advertising dollars will soon follow.

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