Social networking — only a $4 billion business?

15 12 2007

Social networking — only a $4 billion business?

Posted by: in Marketing and Advertising

Filed under: Marketing and advertising, Next massive thing

With a $15 billion valuation for Facebook, it seems that social networking is destined for big monetization opportunities. Yet, a variety of venture capitalists have expressed some skepticism lately. Basically, it’s not simple advertising to the social networking crowd (as seen with Facebook’s Beacon initiative).

This week, eMarketer published a study that forecasts that social networking advertising is expected to reach $4 billion by 2011 (on a global basis).

Keep in mind, though, that research firms don’t have clear-cut crystal balls. It’s not uncommon for them to get too aggressive on these estimates. Also, in the realm of the frothy World wide web, the $4 billion figure does seem a bit muted — especially in light of some of the current valuations.

Something else: eMarketer thinks that about half of all on the internet adults will be on social networks by 2011. Really?

I can certainly understand that teens will remain avid. But, adults have other things to do besides social networking (such as making a living, taking care of children, and so on). In other words, if eMarketer is counting on adults for social networking riches, it might want to think again.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates DealProfiles.com.