Zuckerberg: Facebook about traffic, not revenue – at least for now
Social networking has been one of the sectors of the Internet market to have seen the most growth over the past few years, with only Web video possibly coming close to competing in terms of traffic. But the one problem social networks such as MySpace and Facebook have is the lack of revenue inherent in their business models. Not a problem, says Facebook founder and CEO, Mark Zuckerberg, we’re all about the traffic… for now.
Most people reading this use at least one of the big social networks such as MySpace and Facebook. Most also probably have used one of the smaller ones over the past couple of years. With so much interest in the concept, and so many people visiting the sites daily, how come they aren’t making oodles of cash?
The big problem is how to make money. Traffic alone doesn’t guarantee big bucks, just ask YouTube, currently being monetized to within an inch of its life by Google. You can have everyone in the world visiting your site, daily, but unless there’s a system in place to persuade them to part with money at one point or other, then money still doesn’t enter the equation.
In a recent interview with Frankfurter Allgemeine Zeitung (FAZ), Zuckerberg admits to not yet knowing quite how to turn Facebook in to a profitable business. But for now, growth is the main goal, with a business plan coming together in the next three years. No rush then.
But what every great internet company has done is to figure out a way to make money that has to match to what they are doing on the site. I don’t think social networks can be monetized in the same way that search has (sic). But on both sites people find information valuable. I’m pretty sure that we will find an analogous business model. But we are experimenting already. One group is very focused on targeting; another part is focused on social recommendation from your friends. In three years from now we have to figure out what the optimum model is. But that is not our primary focus today.
Growth is primary, revenue is secondary.
As Alley Insider states, three years from now would mean it’s been seven years since Zuckerberg and his cronies started Facebook, while at Harvard, and only then would a business plan be coming together. Meaning Zuckerberg has been very lucky to find the investors he has, all of whom seem patient enough to wait a long time for returns.
I have no doubts that Facebook can make money in the long-term, but seven years seems an awfully long time to even come up with the best way to make money from the business you’ve spent your life developing.
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