Wednesday, June 14, 2006

Mo' Money in Big Three?

A lot is happening in the consumer Internet space and we're fully aware of these major trends since we hear about them in the daily press. I'd like to call them the big three: social networking, blogging, and video. Sure, they've received a lot of buzz but has anybody in the space figured out how to work a revenue model into the equation?!?

I'm waiting for a YouTube, MySpace, or a Facebook to provide the GOODS on how monetizable their current user bases are. Yes, I understand that having a critical mass of users can support an advertising based model but can this be achieved in each case.

I have my doubts. A few things to throw out and test the waters. What is the likelihood of a wholesome P&G to advertise on the space of "Dark, Lolitish Vixen in Upper East Side" or how does YouTube overcome the ever rising hosting costs of all that video uploading? I would only imagine x% of pre roll or post roll ads (small %) are suitable/allowable. This is just a taste of the challenges facing monetization.

I'm confident that the media titans and their hired guns (bankers) are now closely considering the possibilities of leveraging said user bases and plotting an acquisition strategy. Lots of questions on what's strategic vs. financial, I'm sure.

I would hate to be the guy to put a value on an acquisition; yep, that's where the bankers get to earn their fees. ;)