Commentary

Applause And Ingenuity At Facebook

As we all know, there are lots of people examining the various social communities to identify the correct business model for driving revenues from each of them. To date, advertising has been the default means of generating revenue, but that is certainly not the only model, especially since the CPMs being commanded by these sites are so low, due to the fear of running alongside inappropriate content.

Yes, believe it or not, there are other business models for community sites.

The most interesting business model I heard of this past week emerges from the oft-discussed Facebook. It seems that beginning in September, Facebook will begin to allow politicians the chance to reach this valuable audience by permitting them to purchase a profile page for themselves and their efforts.

To date, Facebook has been open only to college students and some alumni, all of whom are within a very narrow age range (18-24 years) and represent the future voters and potentially future leaders of America. I read the article in Time Magazine which mentioned this opportunity and I was immediately struck by the sheer brilliance of the idea. If a community is as strong and as targeted as that of Facebook, who wouldn't charge for access?

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Sites like MySpace and Friendster opened the doors for anyone and everyone, and we've seen how celebrities and brands have utilized the profile opportunities to connect with their audience, but the idea of a closed community which only allows access to a specific group of people or to those people who are invited provides a unique opportunity to reach a specific audience. Think about it. It's uncluttered, you can guarantee exclusivity for the right price and you can control the extent of the messaging that targets your community. It's a model that I see having strong legs as time progresses.

I also think the model is smart because it signals the strength of the closed or invitation-only community. One of the problems facing MySpace has been the open-ness of it all. Anyone can go online and anyone can view profiles and interact with users. Everyone has access--and as a result there are some un-invited people taking advantage of the environment. A closed or invitation-only community reduces the risk and limits the ability for anything off-color because as soon as someone steps over the line, they can be moderated or removed. It's a privilege to be involved in that type of community, not a right. Even free speech can be moderated in a private organization.

I am very interested to see the response from other social networking or community-based properties, and I am also interested to see how far Facebook takes this model. If the model works for politicians, how long before the brands start knocking on the door and requesting similar opportunities? If Facebook limits the opportunity to politics, how long before we start seeing Nike and Adidas creating legislative lobbies in order to get their message in front of the Facebook audience?

I love ingenuity, and this is definitely an idea to be applauded. Nice job, Facebook!

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