You gotta go with traffic

By September 22, 2006 January 5th, 2007 2 Comments

Regular readers will know I have been skeptical about how much social networks are worth – keen readers will have noted I have been getting less skeptical over time.  The $900m Google-Myspace deal was a pointer I couldn’t ignore.

Now I’m going to concede on this entirely.  You gotta go with traffic.  Once you have (a LOT) that you can make the rest happen. 

Just look at the multitude of business models that Myspace is running now – straight forward advertising, sponsorship, music downloads and I’m sure films etc to follow.  See this for a GigaOM view of how users could drive advertising to other users.  Some evidence of this also comes from the fact that MySpace is now referring more users to ecommerce sites than any MSN.

There are still many issues unresolved but you’ve gotta have faith…. George Michael

This may sound too much like coincidence, but I was thinking this at mashup* last night.  Then I got in this morning to find Yahoo! considering buying Facebook for $1bn and Youtube thinks it is worth $1.5bn.

Next time I will get it right a little earlier in the cycle!  Still I think this one still has some way to go.