TACOMA DAILY INDEX -- Oct 28 -- The social networking space is getting crowded with sites like RYZE.com, LinkedIn.com, SixDegrees.com, MeetUp.com, Friendster.com, Tickle.com, Tribe.com and even one called DudeCheckThisOut.com. Technology analyst Mitch Ratcliffe has studied social networks extensively. He writes about Internet trends and politics on his Web log at RatcliffeBlog.com. "I was on the Board of Directors for Match.com. For the first couple of years, you have actually no idea what is going to work. You don't know how often people are going to come back...It turns out they would come back generally three or four times before they <cease coming> back for one reason or the other. There's a lot of experimentation amongst all these companies to see how much people use <social networking sites>, what the size of the typical network grows to, and whether there is enough interaction between those networks to drive a real business model. I don't know if any one of these sites will be able to compete without buying and consolidating all the other network services. Most of the companies that are involved in this are going to have to do something that is open source, that allows people to share this information across networks, or no one of them are going to become a viable place for people to stay...Consolidation is already starting to go on at the very genetic level between all these sites. Information is shared through protocols like "friend of a friend," which is a standardized way of expressing information about the relationships between users on a site and OPML, which is a feed that allows you to track what other people are reading -- a sort of logging of blogging. They are all going to compete to be the place that is the aggregator of choice."
The full article was originally published at Tacoma Daily Index, but is no longer available.
Mark Brooks: Well, Google certainly has the resources to gobble up more than a few players, but is the revenue potential there to justify it?
Social Networking Sites had understood that they will never make money or enough profit offering only the "networking concept by itself".
They morph to a CHEAP CHANNEL for deliver ADS, "an infomercial-advertainment company on the web" promoting exclusive contents for members, and they have to offer FRESH, NEW and WELL differentiated contents from competitors every day.
Regards,
Fernando Ardenghi.
Buenos Aires.
Argentina.
[email protected]
Posted by: Fernando Ardenghi | Nov 01, 2005 at 10:30 PM
What is your definition of enough profit or enough money?
Plentyoffish is the 4th largest dating service in north america
Plentyoffish costs $8,000 USD/month to run (hosting+userplane)
Plentyoffish costs me 2 hours of my time per day.
Assuming I want a salary of 3k USD/month (this is a lot in canada) I need only make 11k/month in revenues to make me happy.
So if my site makes only enough so that I can pay myself 40k USD/year AND only work 2 hours a day is that not enough? Its not like i'll get a job like that working for someone else. On top of that I don't have any investors to answer to, and I don't have a board of dictors etc.
The point is I don't need 200 useless employees that smaller sites like americansingles or lavalife have. I could care less that match.com makes 60 million a quarter, I am happy with 33k/quarter.
The dating industry now is nearly a mirror of the .com industry in 2000. You have all these con men/ceo's selling a cluess public on personality tests, background checks, and the illusion that a online dating costs huge amounts of money to run and therefor you need to pay huge amounts of money every month to use it. Like 2000 the analysts would just keep raising price targets on any internet stock on a near weekly basis. Here you have analysts like Mark using every chance he gets to tell dating sites that they should raise their prices.
Just like in 2000 the industry has lost touch of fundementals. I can and AM running a HUGE site on 8k/month not a million+/month.
Personality tests, background checks etc are nothing more then sales gimicks and provide the average dater with little value.
Most dating sites make their money off the adult section and people looking for sex one way or another. Like in the real world, some men will pay $100 for a hooker. Those same poeple have no problems about forking money over to a dating site, where as the average person would not. Not only that the latest estimate is that 30% are married?
As a free site I can build a site with higher quality members, married people shun it because its to public. I also don't have the problem with people looking for sex as i attract far more mainstream users then paid sites. That and i just ban them.
At the end of the day, a paid dating site offers nothing that I don't offer, except they want you to pay $19.95 to $29.95+ a month for an illusion that they do.
Posted by: Markus | Nov 02, 2005 at 03:12 AM
My definition of enough profit or enough money.
Gross Income == revenue by memberships + revenue by ads.
Net Income == Gross Income less direct costs.
Gross Profit == Net Income less selling expenses.
Net Profit == Gross Profit less Operating, General & Administrative (salaries) costs.
Earnings == Net Profit less Tax
enough NET profit >= 15% of revenue BEFORE tax
(more than 15% of gross income / revenue BEFORE tax)
enough Earnings >= 10% of revenue AFTER tax
(more than 10% of gross income / revenue AFTER tax)
In your case, you cannot take your "own salary" as a profit. Suppose you became ill or on holiday and you have to hire an employee, and you pay him/her 3k.
You will need 14k revenue to take 3k as a NET profit (BEFORE tax).
Your Earnings (AFTER tax) will be less that 3k.
Regards,
Fernando Ardenghi.
Buenos Aires.
Argentina.
[email protected]
Posted by: Fernando Ardenghi | Nov 02, 2005 at 01:49 PM
Marcus, you stated that you are "happy with 33k/quarter" (i.e. on $3k/month salary).
I guess we are different that way. Heck, I'm barely happy with $85k/month salary;-)
I don't know where in Canada you live that $3K US/month salary is a lot. I used to live in Vancouver, where I believe you are, and I found it more expensive than Toronto (I am near there now).
I guess if you are satisfied with a 1-bedroom in a highrise, and have no vehicle(s), save a '74 Gremlin, you could live on $3K/month.
-------------------------------
You also stated that "At the end of the day, a paid dating site offers nothing that I don't offer, except they want you to pay $19.95 to $29.95+ a month for an illusion that they do."
Someone should tell my members, then, as they are paying $24.95 for a 2-week membership or $32.95 for a month (but only $99.95 for a year - great deal).
Or, perhaps they do this because they get more out of paying our rates than a site with one guy working only 2 hours/day;-)
And, of course, a site which specializes in what is supremely important to them: conservative Christianity.
Meantime, I'll try to get by on my $250K/quarter - Murcielago's aren't cheap, you know;-)
Posted by: Sam Moorcroft, ChristianCafe.com | Nov 02, 2005 at 04:27 PM
Mark,
Can I sign up for this? For all these offers I get emailed to me - I should be getting millions of dollars in the next year. I'm so lucky to always get these offers.
Bill
Posted by: Bill Broadbent | Nov 16, 2005 at 11:57 AM