So, There Is Money In Social Networking

No wonder that hundreds of social networking start-ups – eyeing niche markets from dog enthusiasts to high level executives to moms – are sweating and grinding to peel away some of MySpace's market share. With the announcement that MySpace is now earning "in excess of $30 million" a month in revenue, the days of speculation over whether there was any real money to be found in social networking are long gone indeed.

Pete Cashmore at Mashable asks: "Should we be surprised that one of the world’s biggest websites actually has the ability to generate some revenue?" If anything, it was surprising to me that it took them this long to ramp up earnings on an audience roughly the size of Jupiter.

CenterNetworks' Allen Stern uses this news as an opportunity to speculate that the transition from print to online news and magazine publications will quicken. He then asks: "Will the Internet become clogged with these new online-only magazines?" I would think that the Internet is already "clogged" with just about everything. Quality content and hardnosed marketing and audience acquisition and community building are the keys to the online content kingdom.

MySpace is without doubt king of the hill in the social networking space. They're now making money through advertising and cutting deals to allow some exclusive third-party widgets to reside on user profiles. But if they don't innovate and give their massive (and fickle) audience a reason to stick around, social networking-seekers will find innumerable other places to decorate their personal space.

Politics and MySpace, "the leading social networking blogosphere"?

I love Howard Fineman. He's one of the best political writers in the business. He's great on Hardball, and his coverage and analysis of elections and the pure sport of politics is second-to-none.

But still, it's hilarious when non-tech savvy journalists wade into those electronic weeds.

The Internet is now a part of politics as it never has before. As Fineman rightly notes, it was Howard Dean's (and Joe Trippi's) success in raising money and building grassroots community online in 2003 that ushered political campaigns into a new era. Politics and politicians have always followed the money, and therefore 2008 presidential hopefuls are online and actively seeking advantage, dollars, and voters. Both Hillary Clinton and Barack Obama broke away from the long tradition of officially announcing a presidential campaign in a hometown dripping from its very pores in Americana, for example, and instead announced via online video.

Politicians are now seeking ways to integrate technology into their relationship with constituents as well. Obama has made at least one appearance on popular left-leaning political blog Daily Kos during the run-up to the pivotal 2006 midterm elections, and '08 presidential aspirant John Edwards delivers regular posts on Twitter, the newest rage of the tech-bloggy set. (Edwards staff has thanked his "followers" on Twitter for all of their words of support over the recent announcement that Elizabeth Edward's breast cancer has returned.)

Journalists are trying to keep up. It's chuckle-worthy every time that Hardball's Chris Matthews (another favorite of mine) announces that features and video clips can be found online. He has a look of smirking wonder that seems to say, "There's this thing called the Internet and people actually do stuff there, can you believe it?"

This week, in the midst of an interesting-as-usual piece called "Out of Control," which looks at how technology and the media now leave political candidates with less control over the message of campaigns than ever before, Fineman let this beauty slip: "Last time I checked, MySpace, by far the leading social networking blogosphere, had more than 60 million registered members."

The leading social networking blogosphere. If only he had just scaled it back half a notch and left it at "leading social networking website." Or platform, tool, place, locale, or e-shack of misbegotten ill designed schlock. But blogosphere has a pretty clear if broad connotation, representing that vast array of millions of blogs, most of which are separate online entities from one another.

MySpace certainly has millions of profiles, all of which have a blog feature. So I suppose it would be okay to call MySpace a blogosphere unto itself, though I would wager that's going a bit too far. And it would be definitely be inaccurate to compare that "blogosphere" with the blogosphere.

So MySpace is not a social networking blogosphere. It's a huge and monstrous social networking site. The blogosphere is its own universe (thus the 'sphere!) and many who occupy it are more than happy to not be associated with MySpace.

Howard, we love you, but you gaffed a little on this one!

There's No Way That Tom From MySpace "Personally Contacted" Tila Tequila

Everyone knows Tom, right? He's your friend, he's everyone's friend. He's the first guy you see smiling back at you from an odd-trendy camera angle when you and 80 million other people sign up for a MySpace profile.

Now, like the beginning of a rich and wonderfully Byzantine novel, let me layer in the next part of the story. It's amazing how wrong traditional media and professional journalists can be in reporting on the technology and media industries. I had some level of personal involvement in a story that got some major play last year. It had to do with potential gaming at a major social news site, and while there were wild allegations and a few bits and pieces of the truth thrown in, the actual story – while pretty much in the public eye for a careful journalist to uncover – went virtually uncovered.

Back to MySpace. It's well known that MySpace is trying to figure out ways to block some third-party widgets and music/video players so that they can lock in exclusive deals for themselves or flat out force people to use their own products and tools. The trick of course is that one of the key reasons why MySpace became the superstar of the social networking space – and why they leapfrogged Friendster at a crucial juncture – is because they are largely hands off about what people do with their profile pages.

Developments in that storyline make for a good story, and The New York Times does a good job overall with today's "MySpace Restrictions Upset Some Users." It runs down MySpace's new restrictions on a music e-commerce widget called the Hoooka, and how it personally affected musician Tila Tequila's profile.

But it rankled me to read that "the Hoooka disappeared on Sunday after a MySpace founder, Tom Anderson, personally contacted Ms. Tequila to object, according to someone with direct knowledge of the dispute."

I have no personal knowledge of this story and I don't know Tom (although he's my friend!), but I'd be amazed if Tom took the time to contact Ms. Tequila personally about her use of the Hoooka widget. MySpace has a boatload of customer service employees, and Tom's busy being Tom. My assumption is that someone told NYT reporter Brad Stone that Tom was involved, and it sounded good, so it made the story. MySpace's official reaction, which the piece also covers, makes much more sense: MySpace sent Tequila an e-mail demanding the removal of the widget for violating terms of service.

In any event, Mashable rightly points out that MySpace's move against Hoooka is likely because it's trying to better position the Snocap widget, which has a deal in place with MySpace. Snipperoo holds no punches, declaring that MySpace has turned into a Corporate Evil Monster.

Overall, I think trying to sell music directly through social networking sites is a short-sighted business. Like Internet content in general, there's just too much free stuff out there. The old music industry in particular is dying, and selling mp3s for indie bands won't save them. Advertising-supported free music is the future.