back to article Facebook in goldmine potential deficit

Social networking sites will start going titsup in 2009, according to analysts, and may begin trying to charge users for the ability to publish videos of their cat playing the piano. The wheels have been coming off the Web 2.0 bandwagon for a few months now. News that the "Long Tail" theory - an article of faith for True …


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  1. Michael Reed


    So... all those people like me who though "How can something like Facebook be worth hundreds of millions?" were right then. That's good as I had worried that I missing something obvious.

  2. Simon Buttress

    And this is news?

    Not a pop at Chris Williams at all, it's nice to see someone stating the f*****g obvious in b&w. I wonder how long it's taken that director of research for technology and telecommunications Paul lee so see his nose in front of his face. There is no money in social networking, if there was it wouldnt have such an excrementitious word such as 'monetize' woven into it. Still, Zuckerman will be laughing all the way to the bank regardless......ooh, the Sopranos have started on HBO, I'm outta here!

    Peace, and a Happy New Year to all fellow El Reg-ers.

  3. Anonymous Coward

    If Facebook died

    How the hell would I ever keep tabs on all those "friends" (that I never spoke to anyway)??! :-O

  4. Heff
    Paris Hilton

    Long Tail Idiocy

    The problem with the long tail models detractors, is that they dont seem to comprehend that all new amateur web content, no matter how large its eventual success starts all the way down at the end of the long tail, with zero reads/views/browses/ads/watchers/mirrors/subscribers.

    by continuing to invest in sites that promote the long tail model, like youtube, Google is actually investing in very inefficient farming for a high-value crop : the viral video masterpiece thats ends up on the evening news; "sweeping the nation". As technology races ahead, providing exponentially cheaper storage solutions, this low-yield asset farming should, in theory, provide some yield, bu which time companies like google will be in a position to dominate the industry, as they'll already have the research, capital and infrastructure to manage new developments.

    The clearest example of how this works so far is the Casual Flash-based games market, where sites such as armorgames and miniclip host offerings for free, and leading developers find doors opened to them in the games industry by seeing things differently : whatsstarts in a guys bedroom with zero hits and some scrappy flashcode is rendered as a million-view flash application and a job producing more content. for flash game developers, the long tail model already works (albeit with the "long tail" part of the population getting nothing but derision for sub-par offerings).

    I dont think facebook will ever turn a successful profit. unlike other once-tenuous internet moneyspinners (amazon, google, altavista, etc) it doesnt sell a product or cant aggregate accurate data (mainstream ad companies simply dont trust internet social databases because of the amount of erroneous content created by either the sites developers as a means to boost user subsciptions, or by the users themselves who dont want to input their actual birthdate et al). facebook provides no means for a userto create or disperse their own content. at the moment, its a giant, glorified internet phonebook, and I fell its likely to end its "CEO... bitch" days being fronted by a large sponsor on near-philanthropic grounds (probably google)

    ...but then again, I cant help but feel the entire internet business venture is a larger model of long tail. everyone starts out at square one.... some fail flat out, some people make it big enough to float IPO and run like hell, and some businesses make it to the hallowed ground of actually making a profit. content, in and of itself is just like a tiny business : something you made and you want to sell.

    Paris, cos she figured out you can sell people something worthless ages ago.

  5. Rob


    I was right all along, money for nothing still doesn't exist (unless you work in public sector).

    And in other news: The sky is above us and the ground is below us.

  6. Ryan Barrett


    If they could work out a way to charge the unwashed lots of money for something which costs nothing, then they'd be on to something.

    Bit like the mobile companies do for SMS.

    Remember that their users are the same people who buy Britney's latest ear buster and call those dodgy premium numbers which seem to be bankrolling the horror which is TV at the moment..... there'll be a way of extracting money from them, Facebook just need to work out which one to start with..

  7. Anonymous Coward
    Thumb Up

    Hey Nonny Mouse

    Thank you Mr Williams, this is probably the clearest description of the situation I've read, but I do feel I have to say that it's really not a surprise. I just couldn't see where Facebook or Twitter could make any money out of any of the users.

    I mean, yes, there are ads on there, which is where some money would come from, and I assume some people click on them for some odd reason, but the whole appeal is "this is a free way to socialise with your friends, oh, and here's some adverts". The second you ask for money from the end-user, 90% of your audience hang up (and bugger off down the pub to try "talking 2.0" instead), so ads can be your only real income. What's the return on a Facebook ad? Pretty much zero for the obvious ones, most people zone out of the sidebar or the over-cluttered ones, and not a lot better for the more subtle ones.

    I won't even mention the number of my friends who've asked me if I know a way to get rid of them (Of course, I have no idea what Greasemonkey is...)

    In other shocking news, "Pope is German, and possibly Catholic", "Lego is fun", "Bears sometimes relieve themselves in forested areas", and (with apologies to MG) "My cat's breath smells of cat food"

    But I'll still be pointing people at this writeup if they ask about the "Emporer's new clothes".... sorry "Social networking business model"

  8. An ominous cow herd

    In other news

    In other news from the department of the bleedin' obvious, rain is wet!

  9. Cameron Colley

    Is the personal data worth anything?

    Perhaps someone can sell the personal data people input into these sites and return a profit -- stalkers may pay.

    Facebookers -- I hope yopu never gave them any information you wouldn't like to see sold to the highest bidder.

  10. Jodo Kast


    I'm sure the government would bankroll the CIAbook... I mean facebook.

    Where else can you identify someone, what they are doing via status updates, and who their friends are?

    If they start charging for facebook, perhaps 'farcebook' would be more accurate.

  11. Anonymous Coward
    Paris Hilton

    Full disclosure, please

    how much is the average Reg commentard worth, then? I ask merely out of curiosity...

    Paris, 'cos she's curious and also able to command a hefty fee for no readily apparent reason

  12. Anonymous Coward

    "Social networking sites will start going titsup in 2009"

    Finally! I've been waiting for this for years!

  13. Anonymous Coward
    Jobs Horns


    I too thought that I was missing a trick on ow some mathematical genius' had worked out the sky-high value for this piece of real estate only frequented by freetard students and professional people who actually have no real work to.

    The finanvcial pyramid scheme was truly a farce, not just now with the benefit of hindsight wisdom. I look forward to Farcebook to also going down the toilet.

  14. David Wilkinson

    They will never provide a decent return on their investment.

    These companies were sold for values that far exceed their current state of profit. Their only hope it to somehow completely change their business model and hope to maintain a high percentage of customers.

    If I had a clue about what that business model could be ... I'd be hard at work on a website instead of typing this.

  15. Moss Icely Spaceport
    Black Helicopters

    Long term business model

    1. Give free access to all

    2. Muppets sign up in the millions

    3. Said muppets give away all kinds of personal info $ post data

    4. Servers fil up with muppetesque-data

    5. Wot! No $$$$ ?

    6. Ransom muppets to "save" their online tat from 'deletion'

    7. Profit $$

    8. Sell all the PI that is not purchased

    9. Profit again $$$$

    0. What the heck, sell the 'purchased' data as well, see 9.

  16. Anonymous Coward
    Thumb Up

    Open, p2p & distributed

    Social Networking and services like photo sharing should not be built around a closed client server model - the true nature of the cloud is distributed and decentralised.

    Open protocols are required for profile, photo and event exchange with anyone able to build and distrubute clients that implement the protocols.

    Most users have 200gb plus of storage and a broadband connection sufficient for sharing birthday greetings, photos and so on with their friends.

    Getting the users to host the content they generate is the most cost effective way for these networks to work.

  17. Anonymous Coward
    Thumb Down


    OK - i'll admit it. i did have a facebook account and [god help me!] a myspazz one too, for about three months a year or so ago. fortunately i soon got sick of logging in to find that friends and acquaintences i had previously thought intelligent people seemed to have regressed to primary school level and wanted me to buy them virtual pints, wrestle with their virtual zombies or send them vurtual hugs. so in a 'road to damascus' moment, i cancelled my accounts and havenae looked back since.

    i sincerely hope that facebook, myspazz et al do go tits-up as soon as possible. their very existence embarrasses me in the way that - as a teenager - every subsequent chance encounter with some ugly girl i'd drunkenly shagged after a teenage party would reduce me to crimson embarrassment and my mates to elbow nudging hysteria.

    OK - i had that facebook once. but i was really pissed at the time and it willnae happen again. can we just forget about it now?

  18. Martin Nelson
    Thumb Up

    From a website owner

    Okay, so I own a small website that is not quite web 2.0 (I hate web 2.0). However, the site is based around writers publishing their work for free on the site as a form of publicity. I can actually afford to run it out of my own pocket for a while as costs are less than £50 per year. However, I can see that if I were to expand beyond my current finances that the site would go tits-up. Now, if I want to expand I put an ad or two on the site and hope to see some revenue. Based on any said revenue I expand the site accordingly. That is a sustainable (or as sustainable as possible) model. The problem with FB et al is that they have expanded beyond their means. If they had stayed as a 18+ site only instead of allowing 13+ to join, there would be fewer numbers and more managble, as those are the targets of the adverts. Add to this the recent and unpopular redevelopment and redesign of the site and you have a big loss of money.

    In short...these people haven't a clue. If they did the sites wouldn't grow too large for them to handle.

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