social gather people with common interests and many people enjoy being part of a large network of friends and future friends. Social networks actively promote people to join so that they can increase their clout with online advertisers. These Social Networks make large amounts of money from the advertisers that want to get their products and services in front of all of these people.
This is why most Social Networks provide splendid high tech features such as discussion groups, video email, online social games, photo albums, contests, and many more exciting things to come. They create a virtual mall of fun things to do so people will not only visit but stay for long periods of time. The longer a person stays on a website, the more opportunity there is for the advertisers to place their ad in front of more people. This is referred to as the “Stickiness” of a website.
But there are other good reasons for people to use social networks as well. Networking is a way for business people to meet prospective clients, partners, and customers in a friendly social way and this has always proven to be lucrative. This is similar to the reason why many companies provide tee times for their employees who are entertaining clients – it is a way to personalize a meeting during a friendly round of golf. Thus if you have a business, being socially active can make you money.
These attributes of social networking have been very successful in recent times for increasing the number of people gathering on these social network sites. However, competition in this ‘niche’ is growing and will continue to grow. A new niche is needed.
Most business must spend money not only to start up but also to grow the number of customers they have. Social Networks do advertise in their infancy to gain members and this usually puts them further in the “red” until they can persuade enough people to join for companies seeking good advertising opportunities to pay them for the ad space. Many companies of all types commonly must spend upwards of 70% of their revenue to maintain and grow their business. If this money is paid to advertising agencies, it only benefits a limited number of people.
Enter the “monetized” social network. Since most businesses in the world are very happy if they can make a 30% profit, why not pass 70% of the advertising revenue back to the members of the social network? Base the amount of revenue each member receives on the amount of members they bring into the membership and you have a viral team of social net-workers who are being paid to increase the number of people in the network. Instead of paying for advertisements to get people to come to their website, the members become the advertisers and are compensated for their efforts. Also, since the advertisers who would pay this social networking site for hosting their ads is willing to pay the going rate for internet advertising, both the 70% share being passed back to the members and the 30% profit for the social networking site owners grows proportionally with the growth of the membership. If you can find a social network like this, wouldn’t you rather be a member there instead of Facebook, Twitter, or MySpace who keep all the profits for themselves and take advantage of the very lucrative services their members provide them?
The business model of this monetized social network could be structured to reward those who work the hardest to bring new people to the website. After all, this is how money is made on the internet. So imagine if you developed a method to track both how much each member views the advertisements on the website and how many people they have invited who join the network, how this could provide the basis of a commission structure that would be fair and equitable.