Year in review: Social networks grapple with money question
Sites like MySpace, Digg, and Facebook proved their might in this fall's election, but when that party ended, it was back to figuring out how to make a buck or two.
Social networks grapple
with the money question
When it came to the news headlines, it was a terrific year for social networks. Mostly.
True, the
Facebook and MySpace, the world's two biggest social networks, launched elaborate voter outreach initiatives. Digg's traffic soared as political news reached a fever pitch. An official Twitter account for Obama became the microblogging site's most popular. Widget development companies, which rose to fame in 2007 when Facebook kickstarted the social platform craze, were
Credit: Caroline McCarthy/CNET News
President-elect Barack Obama, who amassed
a strong online following during the campaign,
was enthusiastically received in February as
he addressed a MySpace-MTV event.
It all provided some uplifting news for social-media sites as the economy began to crumble in September. But now that Obama is poised to take office, the election party's over and it's back to reality. As buzzworthy as it remains, the social-media industry still hasn't proven itself in the business viability department. This was a concern in Silicon Valley even before the financial downturn began to grow truly alarming: Twitter has not yet produced a business model. Facebook and Digg are not yet profitable. MySpace appears to be doing better, likely due to the fact that it's been owned by News Corp. since 2005 and has big-media advertising connections at its disposal.
Perhaps because of the financial climate, or perhaps because the era of Web 2.0 was drawing to a close anyway, there were no truly splashy new entrants into social media--no nascent company created the kind of sensation that a Facebook, or even a Twitter or Digg, had in previous years. Location-based mobile social networks
On the bright side, there were some acquisitions:
Facebook, meanwhile, tied up a few of 2007's loose threads. Putting the Beacon advertising snafu behind it and filling its executive ranks with
Late in the year, a few of the data-portability and "universal log-in" initiatives that had been announced earlier in the year actually launched: Facebook Connect went live, as did Google Friend Connect and Viacom's Flux, and MySpace
But as with so much else, the year 2008 in social networking ends on a fairly low note. The recession recently stalled Facebook's plan to allow some of its employees to cash out stock options. MySpace CEO Chris DeWolfe has expressed concern about his company's ability to continue growing its ad-revenue footprint. Twitter and Digg, along with other players in the market like RockYou, Meebo, Yelp, LinkedIn, and Ning, have filled their coffers with venture funding and are hoping to keep growing while they wait out the storm.
As Facebook and MySpace
2008 Highlights
'Scrabulous' debate may rewrite the rules of the game
Wildly popular Facebook application is in hot water for similarity to classic board game. But could it be a marketing treasure trove for Scrabble's trademark holders?
N.Y. lawmakers announce social-networking safety legislation
Industry titans Facebook and MySpace are on board with Attorney General Andrew Cuomo's newly proposed bill to keep sex offenders off social-media sites.
The MySpace generation's got a crush on Obama
The Illinois senator took questions from MySpace users and an MTV studio audience that seemed to like him quite a bit.
Kevin Rose opens up and Diggs in
q&a In part 1 of a two-part interview, Digg's founder says a "smarter" social-news experience is coming--and that Yahoo Buzz doesn't sting.
Zuckerberg talks about Facebook's future
After an arguably disastrous SXSWi interview, Facebook's founder sits down with CNET News' Caroline McCarthy to clear the air and talk about the site's future.
AOL buys social network Bebo for $850 million
International growth is on the mind of AOL--an unexpected buyer. Youth-oriented social site Bebo is wildly popular in the U.K., Ireland, and New Zealand.
Yahoo, Google, MySpace form nonprofit OpenSocial Foundation
The three companies have formed a partnership "to ensure the neutrality and longevity of OpenSocial as an open, community-governed specification for building social applications across the Web."
Comcast goes social with Plaxo acquisition
The purchase of Plaxo, an address book management and social-networking service, helps Comcast create a unified social-media experience across its Internet, voice, and TV properties.
LinkedIn gets its billion-dollar valuation
White-collar social network pulls in a $53 million Series D venture round led by Bain Capital, bringing its valuation to slightly more than a billion dollars--guess that's what happens when Bill Gates is a vocal member of your site.
ComScore: Facebook is beating MySpace worldwide
For the first time, the Mark Zuckerberg-founded social network has passed its bigger corporate rival in global visitors--but it still lags behind in the U.S.
Facebook opens up with Connect
Two apps that will benefit: Digg and Movable Type.
Does Facebook have an answer for MySpace Music
"Social music" is on the rise even as the music industry suffers. An album release partnership with iLike could be the first of many music deals for Mark Zuckerberg's fast-growing company.
Zuckerberg: Be patient, we're opening up
The young Facebook founder concludes the Future of Web Apps conference by telling developers that his company will gradually continue to edge toward the "open" model that so many of them embrace.
Facebook's financials: Not looking so hot?
Some sobering analysis comes today from pundit Michael Arrington, indicating that the social network may be unable to keep its bank accounts in sync with its rapid growth.
Twitter's Evan Williams: Making money through corporate accounts?
The newly reminted CEO of the hot microblogging company won't say anything concrete, still, but outlined some general prospects for a business model dependent on companies' eagerness to connect and communicate with the Twittering masses.
Twitter rebuffs a Facebook poke?
Apparently, the social network really was trying to buy the microblogging service. But Twitter's investors and executives would rather come up with a business model first, AllThingsD reports.
Facebook delays plan to let employees sell stock
Economic downturn forces CEO Mark Zuckerberg to indefinitely postpone plan that would have let vested employees partially cash out without taking the company public.
Additional headlines
Facebook plucks new COO from Google's sales ranks
Who will reign over Digg: Obama or Jobs?
Hey Facebook: No beer pong for you
Court: Don't blame MySpace for offline sexual assault
A whopping $35 million for RockYou's social-network apps
Yelp plans splashy debut in location-aware mobile market
Yahoo Mash: When getting social isn't enough
Analyst: Half of 'social media campaigns' will flop
Social networks grapple
with the money question
When it came to the news headlines, it was a terrific year for social networks. Mostly.
True, the
Facebook and MySpace, the world's two biggest social networks, launched elaborate voter outreach initiatives. Digg's traffic soared as political news reached a fever pitch. An official Twitter account for Obama became the microblogging site's most popular. Widget development companies, which rose to fame in 2007 when Facebook kickstarted the social platform craze, were
Credit: Caroline McCarthy/CNET News
President-elect Barack Obama, who amassed
a strong online following during the campaign,
was enthusiastically received in February as
he addressed a MySpace-MTV event.
It all provided some uplifting news for social-media sites as the economy began to crumble in September. But now that Obama is poised to take office, the election party's over and it's back to reality. As buzzworthy as it remains, the social-media industry still hasn't proven itself in the business viability department. This was a concern in Silicon Valley even before the financial downturn began to grow truly alarming: Twitter has not yet produced a business model. Facebook and Digg are not yet profitable. MySpace appears to be doing better, likely due to the fact that it's been owned by News Corp. since 2005 and has big-media advertising connections at its disposal.
Perhaps because of the financial climate, or perhaps because the era of Web 2.0 was drawing to a close anyway, there were no truly splashy new entrants into social media--no nascent company created the kind of sensation that a Facebook, or even a Twitter or Digg, had in previous years. Location-based mobile social networks
On the bright side, there were some acquisitions:
Facebook, meanwhile, tied up a few of 2007's loose threads. Putting the Beacon advertising snafu behind it and filling its executive ranks with
Late in the year, a few of the data-portability and "universal log-in" initiatives that had been announced earlier in the year actually launched: Facebook Connect went live, as did Google Friend Connect and Viacom's Flux, and MySpace
But as with so much else, the year 2008 in social networking ends on a fairly low note. The recession recently stalled Facebook's plan to allow some of its employees to cash out stock options. MySpace CEO Chris DeWolfe has expressed concern about his company's ability to continue growing its ad-revenue footprint. Twitter and Digg, along with other players in the market like RockYou, Meebo, Yelp, LinkedIn, and Ning, have filled their coffers with venture funding and are hoping to keep growing while they wait out the storm.
As Facebook and MySpace
2008 Highlights
'Scrabulous' debate may rewrite the rules of the game
Wildly popular Facebook application is in hot water for similarity to classic board game. But could it be a marketing treasure trove for Scrabble's trademark holders?
N.Y. lawmakers announce social-networking safety legislation
Industry titans Facebook and MySpace are on board with Attorney General Andrew Cuomo's newly proposed bill to keep sex offenders off social-media sites.
The MySpace generation's got a crush on Obama
The Illinois senator took questions from MySpace users and an MTV studio audience that seemed to like him quite a bit.
Kevin Rose opens up and Diggs in
q&a In part 1 of a two-part interview, Digg's founder says a "smarter" social-news experience is coming--and that Yahoo Buzz doesn't sting.
Zuckerberg talks about Facebook's future
After an arguably disastrous SXSWi interview, Facebook's founder sits down with CNET News' Caroline McCarthy to clear the air and talk about the site's future.
AOL buys social network Bebo for $850 million
International growth is on the mind of AOL--an unexpected buyer. Youth-oriented social site Bebo is wildly popular in the U.K., Ireland, and New Zealand.
Yahoo, Google, MySpace form nonprofit OpenSocial Foundation
The three companies have formed a partnership "to ensure the neutrality and longevity of OpenSocial as an open, community-governed specification for building social applications across the Web."
Comcast goes social with Plaxo acquisition
The purchase of Plaxo, an address book management and social-networking service, helps Comcast create a unified social-media experience across its Internet, voice, and TV properties.
LinkedIn gets its billion-dollar valuation
White-collar social network pulls in a $53 million Series D venture round led by Bain Capital, bringing its valuation to slightly more than a billion dollars--guess that's what happens when Bill Gates is a vocal member of your site.
ComScore: Facebook is beating MySpace worldwide
For the first time, the Mark Zuckerberg-founded social network has passed its bigger corporate rival in global visitors--but it still lags behind in the U.S.
Facebook opens up with Connect
Two apps that will benefit: Digg and Movable Type.
Does Facebook have an answer for MySpace Music
"Social music" is on the rise even as the music industry suffers. An album release partnership with iLike could be the first of many music deals for Mark Zuckerberg's fast-growing company.
Zuckerberg: Be patient, we're opening up
The young Facebook founder concludes the Future of Web Apps conference by telling developers that his company will gradually continue to edge toward the "open" model that so many of them embrace.
Facebook's financials: Not looking so hot?
Some sobering analysis comes today from pundit Michael Arrington, indicating that the social network may be unable to keep its bank accounts in sync with its rapid growth.
Twitter's Evan Williams: Making money through corporate accounts?
The newly reminted CEO of the hot microblogging company won't say anything concrete, still, but outlined some general prospects for a business model dependent on companies' eagerness to connect and communicate with the Twittering masses.
Twitter rebuffs a Facebook poke?
Apparently, the social network really was trying to buy the microblogging service. But Twitter's investors and executives would rather come up with a business model first, AllThingsD reports.
Facebook delays plan to let employees sell stock
Economic downturn forces CEO Mark Zuckerberg to indefinitely postpone plan that would have let vested employees partially cash out without taking the company public.
Additional headlines
Facebook plucks new COO from Google's sales ranks
Who will reign over Digg: Obama or Jobs?
Hey Facebook: No beer pong for you
Court: Don't blame MySpace for offline sexual assault
A whopping $35 million for RockYou's social-network apps
Yelp plans splashy debut in location-aware mobile market
Yahoo Mash: When getting social isn't enough
Analyst: Half of 'social media campaigns' will flop