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Oh, One Last Thing About Web 2.0: Social Networking Sites Are Just For Fun

Hey, Steve Ballmer said Microsoft is going to be buying an average of 20 companies a year for the next five years. But get this: He said that that includes small companies. Oh, and he made this announcement at the Web 2.0 Summit. So you see? Web 2.0 does matter to small and midsize businesses.

Hey, Steve Ballmer said Microsoft is going to be buying an average of 20 companies a year for the next five years. But get this: He said that that includes small companies. Oh, and he made this announcement at the Web 2.0 Summit. So you see? Web 2.0 does matter to small and midsize businesses.I have been touting the ways small and midsize businesses can get in on the Web 2.0 act. Of course it depends upon how you define Web 2.0, but by writing blogs and making YouTube videos you can connect with customers easily (not to mention cheaply).

You see, Web 2.0 is not only about Facebook and its social networking ilk. In fact, I have yet to figure out where the money is for small and midsize businesses in social networking, beyond those companies in the business of creating stuff for people who use those sites.

It appears that even the big social networking guns are having a hard time figuring out how to "monetize" their huge fan base.

A recent study by research firm, Parks Associates indicates that "72% of social networking users would stop using a site if required to pay a $2 monthly fee. Likewise, nearly 40% would stop if a site contains too many advertisements."

The study reports that a whopping 80 percent of broadband users ages 18-25 use these sites on a monthly basis. But, and here's the clincher, "monetizing these users is proving to be difficult, with even category leaders such as MySpace struggling to turn big profits."

Is there any better way to demonstrate why people use MySpace and Facebook and all those other social networking sites? For fun. They're not going to pay for it and they barely glance at the ads.

Maybe I'm missing something. Can anyone tell how social networking sites can help small and midsize businesses improve their bottom line?

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