On the social networking bubble

October 19, 2006   

If you look at the latest round-up of social networking trends at PaidContent.org, you're left wondering, "how will some of these guys be around in a month?" LiveJournal adding telephony, MySpace "bling hubs" existing as parasitic ameba, HotSoup replicating Gather and planning only for ad revenue -- I'm left wondering if these guys have any plan for when the bottom falls out of web ad dollars earmarked for social sites.

My advice to any of these folks in the social networking industry, or anyone planning on making this possible bubble any bigger, is to make sure your revenue stream will be more diverse than adsense from the start, or as close to it as possible, and have an exit plan more realistic than a Google buyout.

More things to read: "Face Value: Putting a price on social netowrks is tricky: in the 10.09.06 Red Herring (Thanks for the tip, Evan. Sorry, no link.)

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