In the summer of 2005 Rupert Murdoch’s company News Corp. paid $580 million for MySpace.com, a wildly successful social networking site. Facebook, another fast growing 3 year old social networking site has turned down offers as high as $1.6 billion. In a February 8, 2008 Business Week article writers Spencer E. Ante and Cathering Holahan say that “Generation MySpace is getting fed up” as MySpace, Facebook and other big social networking sites try to monetize their popularity and turn big profits by selling advertising. These sites have gotten big by providing for free relatively simple web services that allow friends to connect. The lack of a membership fee and ease of connecting with others has made them popular. Without advertising there is no revenue to pay for the growing bandwidth and server space needed for all those pictures, songs and movies. The question Ante and Holahan pose is a great one and one that we should all be paying attention to. Is the sudden inundation of advertising on these sites turning users away? This is a generation that has grown up with constant change and a generation with countless options. Media sites are going to have to get smarter if they want to keep their subscribers and still make some money. Five years ago Yahoo was the media darling. Now all the talk is about how Yahoo is getting beat bad by the new kid on the block – Google. In an increasingly cluttered market where everyone has choices its going to become ever more important for companies to target specific groups and give them exactly what they want. It’s just too easy these days to ignore advertising. And if this generation doesn’t get what they want, they know how to use technology to ensure things are corrected. Witness what happened when Facebook tried to introduce a new advertising program that many users felt invaded their privacy. Read one of the many written on the Beacon project on the San Francisco Chronicle site here.
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