This is huge – especially since many social networks in the United States aren’t nearly as profitable. According to the article, MySpace brought in $800 million and Facebook made $250-$300 million last year; a majority of those earnings came from online advertising. But in my opinion, there’s only so much you can do with online advertising. There are only so many places on a page that you can place an ad (without overwhelming the user), and there’s only so much you can charge for those advertisements. On top of that, you have to think about your audience and if your advertisers want to target that group.
Because of those issues, I think it’s extraordinary that MySpace and Facebook have done as well as they have. But it’s encouraging to learn about Tencent’s business model.
So how does the site make money? Not solely through online advertising, but another avenue: Virtual goods and “Internet value-added services,” or IVAS.
IVAS, which includes avatars and memberships, accounts for more than $700 million of the site’s profits. That’s huge.
It’s also a great business model. Users may simply glance over online advertisements, but they’ll actually participate when it comes to online goods. It’s another way to engage the community.
It appears that countries like the United States are just learning about the potential of virtual goods. However, IVAS may not be the saving grace of all social sites. The article brings up a good point – maybe Chinese users are more likely to purchase goods than users from other countries.
Either way, Tencent has proven to the world that social sites don’t need to depend on advertising; they can be successful simply by being creative.
How not to get Twitter followers: Our top tips – 1) Don’t ask for followers. 2) Don’t ask for followers. 3) Don’t Tweet too much. A funny look into one Tweeter’s experiment to gain a larger following.
Twitter kills Google in real-time search – Now I’ve been hearing about this the past few days. I don’t know if one kills the other, rather, I think they both have their strong points.
Twittersheep tells you more about your followers – Who’s following you? Check out Twittersheep to see a word cloud from your followers’ bios. My followers’ most used terms? Media, social and tech.
COOL TOOL:Tinypaste – Have a lot to say – more than 140 characters? Just Tinypaste. Just add in your text, and it’ll create a URL linking to your text. Very helpful.
How fast can you add Facebook friends? Faster than Facebook will allow – It’s refreshing to see fellow Tribune reporters and columnists discuss social media. I love hearing their perspectives, especially this: Columnist Eric Zorn wanted to test how long it would take for him to acquire 1,000 Facebook friends.
COOL TOOL:Wee! New numbers on social network usage – Good information from Jan. ‘09, but it’s only social networks, not news. (PS Facebook is finally more popular than MySpace.) But what’s REALLY interesting? If you go to compete.com you can totally compare traffic and unique visitors. Very helpful. The only setback is that you have to pretty much log in or pay for anything of worth. Lame.
Google’s Social Web Blog – Finally Google enters the social community with its new blog. I’m excited to see what the giant has to say about social media.
Twitter improves service, base; next, revenue – A great intro piece to Twitter explaining its history and purpose. Scroll all the way to the end to find Twitter piggy-backing services.
The Power of a Retweet – Solid, basic post about retweets on Twitter. Also mentions sites like Retweetist, where you can follow who is retweeting, or RTing, you.
Top 10 social media networks for Generation-Y – Other than a few networks, most of these are geared toward college students and recent grads. Some highlights: BrazenCareerist.com – A Digg-like site for blogs; if your blog post is chosen, it could be posted to the front of the site.
10 ways social media will change in 2009 – This year, social media has become a mess, according to the article. Since there are so many sites starting up and evolving, the author says we can look forward to a number of things in 2009:
- It’s about people – Creating meaning and value – Enabling convergence – Building a truly cross-platform experience – Creating relevant social networks – Innovating in the advertising space – Helping people organize their “old” social media ecosystem – Connecting with the rest of the US and the world – Preparing for new social media jobs – Making money
What am I looking forward to? Finding out how some sites (like Twitter) learn to make money, and how advertising becomes effective.
Hi -- thanks for stopping by. I'm Amanda Maurer, Digital News Editor for the Chicago Tribune. This is my personal blog of all things social media: strategy, community issues and generally cool things found online.
Want to find me on the Web? I'm acmaurer on most social news and networking sites.
