News Brief

IDC: Social Nets' Revenue Could Reach $1 Billion In '07

Projecting that social network revenues will more than double this year to as much as $1 billion from $400 million in 2006, a new IDC study found nonetheless that, "so far, little advertising can be found" on them.

In the study, titled "Social Networking Services in the U.S.--Popular, Yes, But How to Monetize Them?" IDC found that most social network services will employ a mix of business models in the future, including advertising, subscriptions, and ecommerce--with only advertising scaling well enough to make social networks interesting for portals and major media companies.

Yet, the study added, "some services may never be able to attract brand advertisers on a large scale."

"Social networks cannot guarantee a brand-safe environment. Advertisers don't want to see their ads displayed alongside illicit content, for example," said Karsten Weide, program director of IDC's Digital Marketplace: Media and Entertainment. "The dilemma for social networks is if they start to control what content users can post, they will lose popularity, which is what attracted advertisers in the first place."