How Questionable is Social Media Monetization?

Posted by Nick O'Neill on June 4th, 2008 10:10 AM

I wrote a post this morning about generating revenue from poorly performing social network (and social media) inventory. Over the past 24 hours I have watched a number of articles about Huffington Post, the leading blog on the web, and criticism of their ability to generate revenue. As of yet, the company has yet to post a profit according to company insiders but Ariana Huffington claims that positive cash flow is not far away.

Techcrunch on the other hand has yet to take any funding (at least publicly) and just yesterday announced the hiring of a new employee. Every day I face an internal struggle as to what the future of Social Times holds but somewhere deep down I believe that this social media industry has a bright future. Still, critics love to do their job and point out how most of these companies are not generating substantial profitability and while CNET was recently acquired, it is one of the few companies to have a successful exit.

Even I find myself to be a critic of some of the practices of bloggers such as Mike Arrington but one thing I can’t do is criticize the amount of effort these people have put into building the industry. Take a look at the Techmeme Leaderboard and you will see a whole list of blogs that are striving to rise to the top and achieve similar successes. None of us know where this industry is going but we are willing to fly by the seat of our pants and test it out.

In a world of limitless content, there is most definitely value in filtering and aggregating the most important information. The unanswered question is how valuable this service really is. There is no straight-forward answer and for many of us, the answer will come in the form of a large paycheck or the emptying of our bank accounts. Some of us might even generate a successful lifestyle business out of it if we’re smart enough.

What do you think the answer is to social media monetization? Is this entire industry built on stilts or will we soon see stability? Do you think large media companies will acquire on their way down or will the acquisition of social media businesses help them sustain a leadership position?

This entry was posted on Wednesday, June 4th, 2008 at 10:10 am and is filed under Social Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.