Facebook Takes a Dive: Why Social Networks Are Bad Businesses
By 24/7 Wall St.
Social networking giants, Myspace and Facebook may not be living up to what the advertising sector was hoping. Reports are that these two sites are not generating the advertising revenue that predicted. Myspace a few years back was purchased by newscorps in a attempt to make a huge profit off of the 100 million users that current use it to communicate with their friends. It was not anticipated that while these users were socializing with friends that they would not be interested in things being advertised. It is unlike a site that specifies in one kind of product, like “shoes”. Where an advertiser would know that the person is their to specifically look for shoes.
There have been many financial roomers spreading throughout Facebook that I have experienced in first person. One has to deal with how Facebook had recently changed its user policy so that all content that users put on the site would be the property of Face book, with which they could do what they want with it. This opens the door for Facebook to sell the information that the users post on the site to a 3rd party company that in turn would sell it to advertisers. There was a huge out rage to this throughout the Facebook community, mostly because they had changed the user policy without letting its users directly know. In my opinion it is really sad to see these small fun sites turn into advertising giants, it seems to happen to a lot of them.
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