Social networking business
For some time, we witnessed the proliferation of numerous social networks and virtual communities (Facebook, MySpace, Tuenti …) to which few now remain outside. An unstoppable phenomenon that is changing the way we interact and even the sales and marketing strategies of many companies. Its possibilities seem limitless, and its growth despite the crisis, has hitherto been unquestioned. But is there a really solid business model that supports these networks? Where does your revenue? Can they survive only thanks to the publicity and little else?
In our recent memory is still the bursting of the Internet bubble that between 2000 and 2001, dragged down dozens of companies born in the midst of dot-com maelstrom. In the nineties, the popularization of the Internet encouraged many companies to bet on this new sales channel, without geographical barriers and enormous niche market in all sectors.
Many investors, in fear of missing out on this boom, also wished to become a piece of cake offered by the Internet. Possibility of increasing turnover, diversification, reduction of operating costs, synergies, etc. All were advantages and profitability seemed to be assured.
However, as it finally became clear, many firms failed to manage its assets well, as its business model was based on erroneous assumptions. Estimates little tight on market size, projection and Internet penetration and future prospects for generating revenue through advertising, and the inadequacy of the system in terms of connectivity and logistics led to the failure of many projects millionaires. Boo.com (Benetton), Go.com (Disney), or Ecuality Viaplus are just some examples, both within and outside our borders.
Have we learned from those mistakes or be facing Facebook and other similar situations of success? It is clear that, beyond the advertising that can be inserted in their doorways, the true economic potential of these networks appears to be direct marketing, because, to be part of any portal, the user gives their data, which are stored and analyzed by advertising agencies, which at a distance of a click can have multiple profiles defined targets.
Whether or not new technologies, the model of income of any company should follow the same pattern as in a traditional company and, of course, take into account certain basic factors: strategic objectives, business model consistently sound financial structure , proper selection of personnel, proper measurement of ‘time to market’ ideal time to undertake appropriate size … and do not forget that, beyond getting a large number of users, the main thing is to sell.
The market goes through cycles and, ultimately, all bubbles end up exploding. First came the dot-com, then the private equity and real estate … What is next? Does the energy? Do online communities? In fact, MySpace has announced a drastic cut in its workforce, so that no one should forget the basic approach of any business plan … We are in a situation where the lack of liquidity, consumption falls and no one dares to launch new projects.
