I came across a very disturbing social networking site last week called Yuwie. It's another site that's decided that for some reason, using a free, and highly functional social service populated by your friends (like Facebook, MySpace, Bebo, etc.) is worth ditching for something built with very little ease of use or original design, but created to help you make ludicrous amounts of money by selling out your friends.
It works like this: you get a share of money for every page view on the service (the site makes its money by selling ads). Also, the more people visit your page, the more page views you get a percentage of. Yuwie then takes it a step further with referrals, letting you get a percentage of money from the activity of any friends you've invited to the service, along with their friends, and people who their friends have invited. This goes on for 10 "levels," so you could theoretically have close to 100,000 referrals if your friends and their invitees continue to invite others who use the service beyond the one-month probation period.
Does this idea sound familiar? It's a pyramid scheme. The problem with this, economically, is that it's unsustainable. The people at the top can't possibly pay out the promised amount, and the people stuck at the bottom aren't getting the same benefits as those who have spammed referrals to their friends higher up in the chain. Speaking of spam, even if you're on there with your friends, you're bound to get an intolerable amount of spam from people you don't know as the service grows. The second most popular group on the service at the moment has been specifically designed as a place to add random groups of other folks to beef up your bonus money. Is this the kind of network you want to be a part of? At least the site isn't asking for a sign-up fee--if it did, it'd be illegal. And it ought to be.
The worst part is that Yuwie is pretty much a carbon copy of MySpace, circa two years ago, with nearly identical profile features--meaning you're not really getting anything more than you would with a mainstream social network. That, and the ads are those wonderful seizure-inducing ones that jiggle and flash, combined with the large click-through ones that steal you away from whatever you're looking at while you wait for a redirect. Even MySpace won't do that.
It's also not an original idea--profit sharing has long been a part of the social Web services. More recently it has gone mainstream in the video space with Revver and YouTube's new AdSense program, but even then, you're unlikely to get the $10K a month Yuwie is promoting in their introductory video. The big difference however, is that these services reward creativity and the traffic it brings in over gaming. In terms of social networking, sites like (the now defunct) Fannect.com have offered their users the option to add Google AdSense to their profiles, while Facebook lets developers of third-party apps drop ads into their canvas area. There's also Capazoo, which lets users exchange virtual tokens that have been "tipped" from other users for real money.
These ideas are going nowhere. People are eating up sites like Facebook and MySpace because they're an easy way to people-watch and stay in touch in a more pervasive manner than e-mail or instant messaging alone. While it would be nice to make money off using these sites, I'd much prefer to support the people who have created them, and who maintain them with new and helpful features.