Is Social Networking Right for Your Site?

Five things to consider before adding social networking features to your site, or even more seriously, launching a 100% social networking site:

  1. It is absurdly difficult to monetize even a very successful social networking site. Facebook has a click-through rate on its ads of 0.04%. That means they need 1 million page views to generate 400 clicks. If those clicks bring in 40 cents each, they’re looking at 1 million page views just to earn $100. MySpace has a CTR (click-through rate) of 0.10%, which is equally useless. The problem is that people who spend a lot of time on social sites are either so used to seeing the ads that they don’t notice them any more, or they spend too much time online and don’t make much money. Probably both. Subscriptions rarely work either, because they’re used to getting such services for free. You will need another business model.
  2. Its expensive to monitor. Unfortunately, an honesty policy won’t catch all the spam, inappropriate content and insults flying around on your site. You need to make sure you have the resources to actively monitor activity on your site. Its possible to get involved in court cases because someone said something derogatory about someone else on your site. The New York Times had an article a few months ago about Legacy.com, which employs 45 people just to stop visitors posting nasty things about the dead. Now imagine how many people large websites need to monitor what is said about the living.
  3. The competition is extraordinary. Sit and watch the Mashable.com blog every day for a few weeks. You’ll be shocked by how many sites are launching and competing in the marketplace. Watch for a few months and you’ll start to see news about those same sites closing down or putting themselves up for sale.
  4. Its a moving target. Getting into the game requires a constant investment in technology to keep people interested and generate repeat visitors. The move from printed books to photography and then TV and mobile phones took 500 years. On the net a similar shift took just 8 years, as this image from Mashable makes clear. If you do start a social site, you may find yourself on a hamster wheel of development.
  5. It creates a lot of low value, junk pages that can hurt your SEO. When was the last time you ran into a MySpace page while searching on Google? If you do want to add social features it might be worth putting them into a subdomain where they can do less damage to your rankings.

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