STATISTICS:

Nielsen published stats showing that three of the worlds most popular brands online are socialmedia related (Facebook, YouTube and Wikipedia) and the world now spends over 110 billion minutes on social networks and blog sites. This equates to 22 percent of all time online or one in every four and half minutes. For the first time ever, social network or blog sites are visited by three quarters of global consumers who go online, after the numbers of people visiting these sites increased by 24% over last year. The average visitor spends 66% more time on these sites than a year ago, almost 6 hours in April 2010 versus 3 hours, 31 minutes last year. Nielsen, June, 2010

Theres a sea change in more people using social networks from mobile devices rather than desktop clients more people are using the mobile web to socialize (91%) compared to the 79% of desktop users who do the same. It appears that the mobile phone is actually a better platform for social networking than the PC. Ruder Fin via Read Write Web, Feb 2010

According to the Nielsen Company, the global average time spent per person on social networking sites is now nearly five and half hours per month, with Facebook accounting for the majority of that time.

Facebook is the number-one social network destination worldwide and accounts for nearly six hours (5:52:00) per person with the average user logging in more than 19 times per month. Active unique users of social networks are also up nearly 30% globally, rising from 244.2 million to 314.5 million collectively.

Social Networking websites continue to grow on a huge scale with Facebook recently announcing that they have now reached over 400 million worldwide users and Twitter soon to be reaching the benchmark of 50 million tweets per day. Facebook and Twitter also both boasted a triple-digit growth in 2009 with social networking now accounting for 11% of all time spent online.

Not only have user figures grown across social media websites but so has usage and time spent on social networking sites. A report from The Nielsen Company showed that there has been a huge increase of 82% in time spent on social networking sites. Across the globe over the past year average time spent on social networking sites grew from 3 hours per month to 5.5 hours. In addition Nielsen concluded that overall social media sites such as Facebook are now the most common homepages for users and that people now spend the majority of theit internet time using social networks or blogs.

Forrester also recently produced some interesting stats about adults using social media. Some of the findings included:

A third of adults post at least once a week to social sites such as Facebook and Twitter. A quarter of adults publish a blog and upload video/audio they created. Nearly 60% maintain a profile on a social networking site. 70% Read blogs, tweets and watch UGC video.

UK Social Media Stats The popularity of Social Media continues to rise rapidly in the UK, now accounting for almost 11% of the share of UK Internet visits continually closing the gap on search and entertainment websites.

Facebooks growth in the UK continues with a reported 24 million active users. It now accounts for over half of all visits to social networking sites in the UK with YouTube sitting in second with over 17% of visits. Despite the media coverage and growth of Twitter over the past year the micro-blogging site makes up only around 2% of visits to social media sites in the UK, only just surpassing Bebo.

The Growth of Facebook With Facebook also surpassing the 400m user mark, below are some great graphs and stats to put the numbers in perspective from Pingdom.

Monetizing Social Networks: The Four Dominant Business Models and How You Should Implement Them

The business models within the social media realm are much different than traditional businesses. In social networking, theyre ever-changing, backed by eye-opening revenue and have very little documentation.

I. Display Ads: This is your bread and butter business model. It centers on showing showing Display/Context Ads.
The two major forms of this are CPC (cost per click) and CPA (cost per action or acquisition). Example:

With the ad above, the user clicks the ad, they take a quiz, and usually they fill out their email address or phone number. The advertiser (IQ Quiz), will pay the Facebook developer (you) each time a user fills out their email address or phone number. Usually, theres a middle man involved. The middle man is called an ad network.

These types of ads can pay out a CPM of $0.05 $0.80 (*Depending on Country*) Say you serve 1 million impressions of these per day, at a $0.20 CPM, you can expect to make $200 per day, or $6,000 a month.

II. Branding Certain Elements within an Application

This business model is rather new, and personally, my favorite. This model centers on branding a certain element within your application. For instance, LivingSocial is an application where users can make a list of their favorite things. Big brands, like Porsche, may want to get in front of their audience and have users speak about their brand in a viral, social networking space. Therefore, Porsche will pay LivingSocial for each exposure to their audience. By exposure, I mean hitting the newsfeed of the user on Facebook:

I like to think of this model as a Cost Per Share (CPS). Using the above example, lets say you have 1 million impressions of a certain application. For each person that shares Porsche with their friends via Newsfeed, Porsche will pay $5 because these users are loyal and will argue why the Porsche is the best car via comments. Of those 1 million daily impressions or exposures to the app, 0.01% (or 100) users are into Porsches and post their Porsche list to their news feed. With 100 users sharing on their newsfeed per day, at a price of $5 CPS, your app will be making $500 per day, or $15,000 a month. This is much better than the Banner Ad payouts of $6,000/month; additionally, the user experience isnt as bland. By this, I mean, the user doesnt feel like he or she is getting hammered with ads. The only cons with using the CPS model is, (i) As of this past week, Facebook is hiding and disabling application news to be blasted on the home feed; thus, this business model could be dead in a couple weeks; (ii) second, the CPS model requires someone whos creative and persistent on your team. Because social media is so new, and this model is so new, its much easier to setup a business model based on banner ads (all you do is sign up with an ad network and place the creative ad code on your site). With CPS models, you must identify specific elements within your application that are valuable, and you must then find big brands (like Coca Cola) to buy it. When youre a small startup, this is nearly impossible.

Thus, in place of this void, companies like Appsavvy, come into the picture. I highly suggest checking them out.

III. Virtual Currency

This business model is astonishing. The concept of virtual currency is profoundly simple, however, the numbers and revenue this churns out is eye-opening (see table below).

In order to advance in virtual games, you need to invest either (i) Your own Time, or (ii)Your own Money. Being that most people dont have the time to invest into building a virtual farm, they spend real money in order to save them time. Whos profiting from this? The game developers. And theyre profiting big-time. With this powerful element, alternative monetization methods have emerged. For instance, instead of investing your own money in a game, you can take a survey insteadlikely, youll have to provide your email address. This practice has stirred up some controversy recently with some offers being ambiguous. So, now the model looks more like this: You invest either (i) Your own Time, (ii) Your own Money, or (iii) Alternative Method: Take a survey (in which a small fraction are misleading) Prediction: The virtual currency model will likely experience a minor shake-out of the ambiguous offers; this shake-out will benefit both the consumer and Facebook application ecosystem. Im predicting that Facebook will outline certain practices that these alternative offers must follow.

This is a long-term business model, and once Facebook outlines specific policies that outlaw some of the misleading offers that have crept through, the cash will start rolling in for these developers without eyebrows being raised.

IV. Virtual Gifts

Virtual gifts may be even more astonishing than virtual currency. Giving a virtual gift is the same thing as giving someone a gift in real life; except one thing: theyre not real. Surprisingly this hasnt deterred anyone, people are snatching up virtual gifts at an incredible rate.

How incredible? Well, Virtual Gifts are expected to surpass $1 billion for U.S. users in 2009. Thats right, $1 billion. Read more here. The most important element of virtual gifts centers on its use within Southeast Asian countries. In Southeast Asia, specifically countries like Indonesia, Facebook is in hyper-growth moderight now. The only problem is that the traditional monetization model (I. Display Ads), simply do not scale or work in Southeast Asian countries. The only thing that works is virtual giftsand they work a lot. Unfortunately, though, Facebook Developers dont have access to this monetization model because Facebook has their own Virtual Gift Marketplace.

V. The Numbers
From TechCrunch, heres a summary of how much Facebook apps are raking in: Zynga:

Farmville-61M Mafia Wars-25.8M Yoville-19.8M Texas Hold Em Poker-18.3M

Total Estimated Revenue For Year: $200 million Pet Society- 20.5M Restaurant City-17.3M Country Story- 8M 135 million total installs for all games Total Estimated Revenue For Year: $75 million Mobsters -14M Bumper Stickers-11.7M Own Your Friends-10.1M; Sorority Life-7.1M Mobsters 2-3.5M Poker Palace- 1.5M Total Estimated Revenue For Year: $60m

Playfish:

Playdom:

Wrapping Up: What Business Model Should You Go With?

With Banner Ads, specifically CPA-based ads, I believe its only a matter of time before the revenue stream becomes less dominant. Youre going to have to get more creative. The user will cap out at a certain point because theres only so many times you can see a quiz ads, or game ads. Though you can control this with frequency caps, after a while the revenues will plateau and quickly decline. Additionally, Southeast Asia is in hyper-growth mode. However, its essentially unmonetizable at this stage (besides serving Admax ads, which face a limited ad supply); thus leading to the next point: the most viable way to monetize Southeast Asia and other international countries is through virtual gifts for now.

Conclusion
Having a SNS profile is not a matter of pride. Take it as a feature of the web world. Use wisely. Limit your personal information. Use one-to-one email for communication.

 Make closed groups for communication. Refer to the privacy policy of the SNS you are using. In 2011, HCL Technologies conducted research which showed that 50% of British employers had
banned the use of social networking sites/services during office hours Web based social networking services make it possible to connect people who share interests and activities across political, economic, and geographic borders.
[18]

Through e-mail and instant

messaging, online communities are created where a gift economy and reciprocal altruism are encouraged through cooperation. Information is particularly suited to gift economy, as information is a nonrival good and can be gifted at practically no cost.
[19][20]

Facebook and other social networking tools are increasingly the object of scholarly research. Scholars in many fields have begun to investigate the impact of social networking sites, investigating how such sites may play into issues of identity, privacy, culture, and education.
[22] [21]

social capital, youth

Several websites are beginning to tap into the power of the social networking model for philanthropy. Such models provide a means for connecting otherwise fragmented industries and small organizations without the resources to reach a broader audience with interested users.
[23]

Social networks are providing a different way for individuals to communicate digitally.

These communities of hypertexts allow for the sharing of information and ideas, an old concept placed in a digital environment.