How Will Yahoo "Monetize" Their Social Networks?

Thomas Hawk writes "One of the most interesting things to come out of Yahoo's earnings call with analysts yesterday was a statement by Yahoo's COO, Daniel L. Rosenweig on Yahoo's plans to 'monetize' their various social network properties. Flickr was mentioned five times on the conference call and their de.lic.io.us property was as well, after neither were mentioned in last quarter's call. Rosenweig characterized these services as being largely unmonetized and talked about leveraging these "assets" and targeting and profiling a large growing registered audience base. It will be interesting to see how some of Yahoo's popular web properties change through the monetization process."

well they could

Use little icons showing different Monet paintings at the head of each page.

Yahoo closes the circle

I wouldn't worry about Yahoos attempt to make money with flickr and del.icio.us and whether it might ruin those sites or not. The social network idea matches very nicely with what Yahoo has done in the past to make money, so they won't have to force those sites into another concept.

When Yahoo first appeared it was a bookmark list edited by one human. Search engine weren't as good as today and a directory like Yahoo often was much more useful. This changed when the web grew so fast that that no company could hope to keep up, resulting in Yahoo charging for faster integration into their index and the index becoming out of date very fast.

One attempt to improve the situation was to increase the number of contributers with the OpenDirectory, but even these where overwhelmed and today they cannot even handle the spam that is created non stop in dmoz, let alone keep pace with the web.

So we became dependent more on search engines than humans to find what we are looking for, fortunately for all of us Google proved to be very useful. But even Google has it's single point of failure, the one and only ranking algorithm. And although it's not trivial to cheat, the fact that Google reduces the web to basically the first ten entries on the first page leads to the same situation as with Yahoo and dmoz before: The web is not covered properly.

Enter social networks. Del.icio.us is like a dmoz where every user is a contributer. And nobody decides what is on top, it's pure statistics, much harder to cheat when hundreds of thousands of users are involved. With a limited amount of information sources you can easily manipulate an election, but the web provides a much larger base for building you own opinion, and it usually shows.

But what's really great about social networks is that the effort to contribute is so small. Extending dmoz is work, saving an URL at del.icio.us is something you primarily do for yourself, so we don't have to expect that the project will fail once the first movers are burned out. Given the ever increasing amount of information and the lack of progress in AI to sort through all this for us, we will become more and more dependent on others to filter for us. Information has become basically free, but finding the right information has become a challenge simply due to the sheer amount.

And here Yahoo closes the loop. The will never beat Google as a pure search engine, but maybe they can build the third generation of directories with their social network sites and continue to make money the way they always have: If you have the eye balls, enough people will buy something extra. And we will once again see Yahoo as the most efficient way to find information, because it is driven by humans.

Re:Yahoo closes the circle

If I had Del.icio.us, I'm not sure I'd even bother to try to monetize the service itself. The data it generates is way more valuable than any ads thrown against it. If Yahoo integrated that data (and the data from MyWeb) into their search engine, it'd give them a way to differentiate from Google and maybe even draw users away from them. Right now, search algorithms still work by ranking primarily by inbound links. Del.icio.us gives at least two more solid data points to use - the keywords that *users* associate with pages and the number of *users* who found that page useful enough to save. If they rolled out a few more features, like "search only the pages/sites I've saved/tagged with X" - they could easily give Google a run for their money, bump up their search market share and reap the financial rewards of that.

Yahoo's social properties give them a huge advantage over Google if they chose to leverage them for something other than advertising. Integrating that social data into search could give them a pretty big edge that Google can't easily match.

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Yahoo Circle:

1. Produce a usable service with limited-to-no advertising.
2. Gain a large audience through any means required, including bundling Yahoo Toolbars in almost malicious, spyware fashions.
3. Slam it full of ads and quickly make a big chunk of chan

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I'm a little confused about this post because Flickr has hardly any ads at all. It appears to make money mainly through the $24.95 yearly subscription for the pro accounts.

Or am I missing something?

D

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Are small pieces of wood known for their stock pumping?

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Are small pieces of wood known for their stock pumping?

Ask Pinocchio.

I think the blurb summed it up

Those will be slathered in ads to the point of being unusable; much like geocities, yahoo groups, etc.

Someone please remind me again why we give a shit about yahoo (apart from email)? They've got to be the most craptastic set of services on the entire internet.

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And by email, I hope you mean the old email, not the new oddpost+SOAP+WS* monstrosity that can crawl a 3.0 GHz box faster than the latest FPS.

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>And by email, I hope you mean the old email, not the new oddpost+SOAP+WS* monstrosity

Ugh. I had just managed to forget about that. The minute they take away the option to use the old yahoo mail, is the minute I permanantly switching over to gmail.

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Dunno. You'd have to ask yahoo how many people have paid for their yahoo plus service. Personally, if I'm going to switch, I'd rather use gmail for free instead of financially rewarding yahoo for successfully annoying me.

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Yahoo turned Launchcast to crap when they bought it...

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I will agree with your post for the most part, but from what I've experienced, Yahoo! Finance is the flagship financial website.

not that that makes any difference to this discussion

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Trouble is, as far as I can tell Yahoo! only has the local search edge for the states, likewise with maps.

Google Local / Maps knows a hell of a lot about my local area in the UK, which Y! seems to be lacking. From what else I've seen Google also does the r

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Yahoo Maps Beta is superior to Google Maps/Google Earth, at least at the moment.

I just tried YMB. It's annoyingly slow to initialize, somewhat annoyingly slow to load the image tiles, and more limited on satellite zoom-in. It may be slightly ahead on

Translation

Translation: Now that we have this expensive and popular site, we want to fuck the users for as much as possible :P

quote me as saying i was misquoted

How Will Yahoo "Monetize" Their Social Networks? ...and talked about leveraging these "assets" and targeting and profiling a large growing registered audience base

Yes, how "will" Yahoo "monetize" these "assets"? Inquiring "minds" want to "know".

We "lose" money on every "transaction" ...

but we "make up" for it in "volume".

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Yahoo! has to leverage this juncture of oportunity to capitalize on its corporate paradigm where its Web 2.0(tm) assets can be implemented in such a way to baffle customers with corporate-speak, and tell them they can have a service for no cost to them, wh

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*head asplodes from marketdroid doublespeak*
Admirably cromulent description!

Submitter

From the submitter's site: Thomas Hawk is the Chief Evangelist for the Photo Sharing Site Zooomr.

Not that he would be biased or anything, but if any Flickr users want to drop their accounts seeing how Flickr is doomed and your baby photos will have Lower Y

I know...

They can charge national governments for providing dossiers on political dissidents. What other form of data mining pays that well and buys political sway in the unfree world (PRC, USA etc...)?

What on God's green earth...

... is "de.lic.io.us"?

Ahem [del.icio.us].

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... is "de.lic.io.us"?

h.al.va; although to be frank, I'm clueless about what the Vatican has to do with it.

KFG

when Yahoo bought GeoCities

GeoCities was like MySpace in the late 1990s- the trendy place to put a web page. When Yahoo bought it not much happend afterwards except more ads. Did they charge users then?

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Geocities is so non-functional, unsupported, ad-plastered and over-all unusable that it's the poster child for how horrible the results of an aquisition can go. Seriously, geocities is fucking wretched; you could have (and should have) come up with a bette

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Unfoirtuantely GeoCities is a TYPICAL example what could happen to semi-promising software when it is taken over by a greedy third party then trashes it. Manyof Yahoos and MSFTs acquisitions degenerated than way.

Will this pop the so called Web 2.0 bubble?

If Yahoo fails to make money off of those sites we that stop the venture capital flow of money into these types of sites? My guess is probably not, someone always thinks they are smarter and better, but its an interesting thought on if this will change th

Seriously thought-provoking question.

I've often wondered how valuable these Web 2.0 products are, especially their clones which offer identical functionality, and how they'll actually grow, develop, compete, etc. and how scalable they are once they get past the 100-10,000 initial users, rampi

PHB Speak 2.0

Alas, it seems that "monetization" is the latest in (mis)management speak.

Then again, they could always find some sucker^h^h^h^h^h^hinvestor to buy it off of them for a stupid amount of money and make a small fortune out of a big one.

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Alas, it seems that "monetization" is the latest in (mis)management speak.

Uh-huh. You know, just because you aren't familiar with a word doesn't mean it's "management speak". It's been around since 1875 [reference.com], is derived from the Latin "moneta" and as far as I c

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I followed your link and here's the definition:

1. to legalize as money.
2. to coin into money: to monetize gold.
3. to give the character of money to.
4. Economics. to convert (a debt, esp. the national debt) into currency, esp. by issuing governm

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*YES* it's an old word - but with a *DIFFERENT* meaning. It is supposed to mean - 'to make something into actual currency' (think stamping gold to make coins). NOT 'to make financial gain from'.
FFS!

Well, if it's anything like...

...the fiasco with the Yahoo Message Boards, it will be a resounding fuck up.

They took what was (for those of us *still* following the SCO Group stock scam/FUD campaign/pump and dump fraud) the best venue for discussing the evidence presented by IBM and Novell, the utter and complete lack of any evidence presented by SCOX, and the discovery of even more evidence of Caldera knowing they didn't have shit to go on. Now, it's a mere shadow of what it once was, and it's overrun by worthless trolls and SCOX apologists. What used to be a place where the fantastic researchers would shine their 10 million candlepower spotlights on miserable fat Belgian bastards, inventors with vaporware operating systems, other "inventors" with bad haircuts and no sense of humor, hack wannabe code monkeys suckling at the teat of MSFT largesse, or rhodium miners with a penchant for hallucinogens, it is now just a cold, dank, murky underworld. The place to be for financial discussions is NOT Yahoo Finance. InvestorVillage has filled in quite nicely, BTW. As far as I'm concerned, Yahoo is run by yahoos.

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As far as I'm concerned, Yahoo is run by yahoos.

Well D'oh! Have you ever watched the Houyhnhnms try to type in code? It's pitiful.

KFG

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Damn my lack of mod points.

Monitize?

Sorry, but what is that in queen's English? Does not appear in my dictionary.

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Does not appear in my dictionary.


Really? According to Random House [reference.com] it's been in use since 1875. I guess it's time to retire that 1874 dictionary!

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It ma not be the "Queen's" English, but I found monetize [webster.com] in the Merriam-Webster dictionary. Based on the way I interpret the definition, I think Mr. Hawk is using it incorrectly. I read it as Yahoo will start printing money.

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Yes, you are correct - the PHB usage of 'monetize' is quite wrong.

Social networking sites have a life cycle

Take a look at Alexa traffic rankings for "social networking" sites. Many, if not most, of them have already peaked.

EZboard peaked mid 2003. Nerve peaked early 2002. Bondage.com peaked mid-2003. Tribe peaked early 2006. Xianz (the "Christian Myspace") peaked in spring 2006. Friendster peaked twice, once in late 2005 and again in mid-2006, but that's an unusual pattern. Usually, once they peak, it's downhill after that. Myspace has flattened and looks like it's about to peak. This works just like nightclubs; they become hot, they grow, they get too popular, they get overrun, they decline, they hang on, but nobody cares.

If you try to "monetize" the users, they leave sooner.

The real winner in this space seems to be AdultFriendFinder.com [alexa.com]. 57th most popular site on the web, 35th in the US, steady traffic for two years, and it's a pay site. Run by Friendfinder, Inc., the notorious spammers. They seem to have figured out how to "monetize the user base". However, Friendfinder may be inflating their statistics [ripoffreport.com].

Monetize Everything

Let's just get it over with. Monetize everything. Every social interaction should be monetized. How many times have you had a conversation where the other party just wasn't holding up their end? Charge 'em! Sex? Whoever has the most fun, charge 'em! Air, water? Monetize the crap out of those! Let's put a fence around every goddamn thing in the universe and make money off of it. It was free before? Who cares! Tragedy of the commons, man, tragedy of the commons. Everything should be owned. Every possible combination of letters, numbers, muscial notes, symbols, everything. Put a meter in everyone's head, when they even think about your intellectual property, charge 'em!

Want to slit your wrists from living in a disconnected, hollow, completely monetized world? As in life, so in death: charge 'em! Charge 'em to live, charge 'em to die, charge 'em for every goddamn second in between.

Bow down to the almighty dollar, oops, I mean charge 'em to bow down to the almighty dollar.

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Sex? Whoever has the most fun, charge 'em!

That's called prostitution.

Re:Monetize Everything

I'm guessing that's just your $0.02?

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i don't disagree that capitalism tends to devolve into a land-grab for chargeable activities, but you have to recognize that these folks are supplying things which are valuable to us, things which have costs associated with them. IM networks, for example,

They could stop sucking

Their abuse department for 360 is completely useless. At first it wasn't bad, occasionally I had to resubmit one when someone just missed the boat, but lately they've been utterly useless and incompetent. They have profiles of old males which consist of nothing but shots of their penis, and their entire friend list consists of profiles reputedly belonging to 14 and 15 year old girls, and Yahoo can't seem to find their way to removing the obvious adult themed photos even after repeated resubmission, even though its clearly against their ToS (unless that was quietly changed in the last few months to allow that type of thing ot be okay). Having a friends list full of teen girls isn't against the rules, but to me it only compounds the issue of why this 50 year old guy is allowed to keep a dozen pics of his penis on his profile.

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I'm a Flickr member. I was a GeoCities member, a "community leader" in fact, so I've experienced this before. I bought a Flickr Pro account shortly before Yahoo bought it out and because of their "double your pro" offer, my Pro account will be running ou

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Why has your interest waned?

Primary reason: Other people don't want my photos of them made public.

I have other hosting options, or email, if I want to share photos. I manually edit my blog on my own little corner of the web and can host pics there -- mo

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Really though, the era of sharing every scrap of your daily existance on the Intertubes is drawing to a close.

Well, you can file that next to "I think there is a world market for maybe five computers." and "640K ought to be enough for anybody."

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It might have been cool when the first coffee pot webcam hit the net, but do we really need everyone to share that? This democratising ability to be able to publish anything is cool, but I predict that people will soon start to exercise their editor muscl