I made a very, very brief appearance on Morning Edition this AM:
Fred Stutzman, who studies social networks at the University of North Carolina, thinks charging for services will turn out to be the best way for social networks to get profitable.
“People will pay for good technology,” he says. “People will pay for a responsive company.”
He points to the professional networking site LinkedIn. It offers some free services, but users pay for a premium level with more features. With only 40 million users, LinkedIn is significantly smaller than Facebook or MySpace, but it’s making a profit.
Facebook, though, may face a bit of a conundrum. There are two groups on the site called “We Will Not Pay To Use Facebook. If This Happens We Are Gone.” Their combined membership? Nearly 8 million.
Stutzman thinks that ultimately Facebook, MySpace and Twitter are going to be around for a long time. They just might not be the big cash cows that some people expect.
Unfortunately I missed the live broadcast.
Fred Stutzman is a doctoral student, researcher and teaching fellow at the University of North Carolina at Chapel Hill's School of Information and Library Science. He studies how people use social media.
If LinkedIn is making a profit, I doubt that it is from users paying for premium level benefits, at least not currently in the Raleigh-Durham area. I’ve been to two workshops taught by highly knowledgeable promoters and users of LinkedIn. Both said they did not use premium level and were not aware of any one who did. Perhaps a few recruiters spend heavily on these benefits.
LinkedIn has tremendous profit potential, but not from premium level revenue, at least not with the current structure.