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How Will Yahoo "Monetize" Their Social Networks? 74

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."
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How Will Yahoo "Monetize" Their Social Networks?

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  • by LiquidCoooled ( 634315 ) on Wednesday October 18, 2006 @04:52PM (#16492039) Homepage Journal
    Use little icons showing different Monet paintings at the head of each page.
  • by chriss ( 26574 ) * <chriss@memomo.net> on Wednesday October 18, 2006 @04:53PM (#16492059) Homepage

    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could hope to keep up, resulting in Yahoo charging for faster integration into their index and the index becoming out of date very fast.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.

    • by ejp1082 ( 934575 ) on Wednesday October 18, 2006 @08:13PM (#16494683)
      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.
  • by RLiegh ( 247921 ) * on Wednesday October 18, 2006 @04:55PM (#16492083) Homepage Journal
    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.
    • Re: (Score:2, Interesting)

      by chris_mahan ( 256577 )
      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.
      • Re: (Score:3, Insightful)

        by RLiegh ( 247921 ) *
        >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.
        • by eipgam ( 945201 )
          I wonder how many people still use Yahoo! mail's POP3/SMTP servers instead of the web interface (I do).
          • by RLiegh ( 247921 ) *
            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.
    • 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
    • by Scowler ( 667000 )
      This might sound funny, but the best thing Yahoo has over Google right now is ... search.


      Yahoo's plain vanilla search is on par with Google's, but Yahoo's local search is much better, which is why I switched back to Yahoo for search.

      Also, Yahoo Maps Beta is superior to Google Maps/Google Earth, at least at the moment. And obviously Yahoo has a lot of content that Google does not have (i.e. Fantasy Football, etc.).

      Anyways, sorry to sound like a Yahoo Fanboy, but I'm just a little irritated whe

      • 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 rest of Europe, and most of urban Russia and Asia to a similar degree. Yahoo! gives up anywhere past mapping major roads and has only a vague idea about addresses and local services.
      • 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 layout and a couple of odd features, but for me at least, speed is the killer.
    • Two words: fantasy football

      Well, except the UI for ranking your players before the draft is godawful. The rest is pretty sweet, or at least a lot of fun.
    • Sorry but Yahoo has some seriously good sites: finance news my ask autos flickr local weather maps I just do not see a single other web company that is at the top or leading in all these markets. Whether Yahoo remains cool or perfect for us infallible Slashdotters is obviously settled (it is not) - but it is the highest hit web presence day in and day out and that is why "we give a shit about yahoo."
  • Translation (Score:1, Insightful)

    by Anonymous Coward
    Translation: Now that we have this expensive and popular site, we want to fuck the users for as much as possible :P
  • by joe_bruin ( 266648 ) on Wednesday October 18, 2006 @04:58PM (#16492133) Homepage Journal
    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".
    • but we "make up" for it in "volume".
    • 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, while their personal information is plundered and exploited to dupe them into buying from Yahoo!'s partners in business.
  • Submitter (Score:1, Insightful)

    by Anonymous Coward
    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 Your Bills flash ads all over them, there're (hint, hint) other sites out there.
  • I know... (Score:1, Funny)

    by Anonymous Coward
    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...)?
  • ... is "de.lic.io.us"?

    Ahem [del.icio.us].
  • 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?
    • Re: (Score:1, Informative)

      by Anonymous Coward
      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 better example

      • by peter303 ( 12292 )
        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.
  • 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 the landscape if Yahoo does fail to make money off of these Web 2.0 properties?
    • 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, ramping up into the millions where bandwidth per user becomes a serious isssue.
  • PHB Speak 2.0 (Score:2, Interesting)

    by jo42 ( 227475 )
    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.
    • by radish ( 98371 )
      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 can tell is in every major dictionary.
      • by RLiegh ( 247921 ) *
        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 government securities or notes.

        So, either yahoo is going to start printing money, or the gp poster is right and this term has been co-opted from its' 1875 usage and is now used exclusively by corporate slimeballs.

        Personally, I'm thinking it's the latter.

      • by kaffiene ( 38781 )

        *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'.
  • by the saltydog ( 450856 ) on Wednesday October 18, 2006 @05:12PM (#16492331) Homepage
    ...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.
  • Sorry, but what is that in queen's English? Does not appear in my dictionary.
    • by radish ( 98371 )
      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!
    • 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.

  • by Animats ( 122034 ) on Wednesday October 18, 2006 @05:15PM (#16492367) Homepage

    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].

  • by spun ( 1352 ) <loverevolutionar ... m ['oo.' in gap]> on Wednesday October 18, 2006 @05:41PM (#16492695) Journal
    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.
    • Someone, somewhere, has to pay for it. Free Lunch, etc.
    • Sex? Whoever has the most fun, charge 'em!
      That's called prostitution.
    • by Quadraginta ( 902985 ) on Wednesday October 18, 2006 @08:58PM (#16495129)
      I'm guessing that's just your $0.02?
    • by anothy ( 83176 )
      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, have very significant, clearly measurable costs associated with them. just passing all that traffic around, maintaining the UID namespace, and so on... that stuff's non-trivial. true, it could be decentralized (like email largely is; jabber's pushing in th
  • I'm guessing by doing stuff like this http://news.com.com/2100-1012_3-6127211.html?part= rss&tag=6127211&subj=news/ [com.com] - Yahoo releases IE 7 before MS
  • by crossmr ( 957846 ) on Wednesday October 18, 2006 @05:49PM (#16492795) Journal
    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.
  • As a Flickr user, this would be my first experience with being "Yahoo'd", which as many have said, is synonymous with being loaded up with ads. The funny thing is, when you see these large corporates buying up these types of little companies, and then trying to minimax a profit out of their popularity, they almost always seem to destroy everything that people loved about the product/service in the first place. I guess the short term profit that these companies get is sufficient to make this practice worth i
    • by Kris_J ( 10111 ) *
      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 out in January of next year. I find the timing of this announcement interesting, as it coincides with the majority of original Pro accounts coming to an end.

      As for Flickr, my interest has wained so much that at the moment I'm basically only using it because

      • by htnprm ( 176191 )
        Wow. I can't believe I will have had my account for a couple of years soon. It expires next March. Guess we'll see what happens then. While I host my own site with PowWeb, I 'outsource' my blog (Blogger), photos (Flickr) and videos (YouTube). As these services change from what I want them to do/be I will probably bring them in house (As the DIY FOSS market for these services matures).

        Why has your interest waned? Has something changed? My primary uses for Flickr are:

        1) An online photo album for friends and f
        • by Kris_J ( 10111 ) *

          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 -- mostly it's not personal photos I use, it's product shots anyway. I have five PCs and I burn backups of all of my stuff to DVD, so Flickr's not part of my backup system.

          Really though, the era of sharing every scrap of your daily existance on the Intertubes

          • 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."

            • by Kris_J ( 10111 ) *
              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 muscles as well as their publisher ones. It's not that no one wants to know what you had on your toast this morning, it's just that there will be more and more examples of why that might not be something you want to share as things progress. Within private ne
      • by htnprm ( 176191 )
        "...I'm probably leaving WoW for good at the end of this month..."

        Yeah. I've heard that before...;-P

        Oh! And rock on the GitS fan...:-)
  • Google and Yahoo only survived the crash because they figured out how to make money at what they do.

    Companies that didn't figure this out used up all their venture capital and went out of business.

    If people want services like Flickr to exist, they should hope that their owners find a way to monetize them. At the same time, the companies need to find a way to do this without ruining what drew people to the services in the first place.
  • I just deleted my yahoo account because they just havent done much that I like on the internet. The only thing I like that they bought was Del.icio.us. Flickr was ok, but now that I have picasa web albums for mac no need for flickr really. Also Google has been much nicer to Mac users.
  • poster Thomas Hawk (nom de plum) is self-proclaimed chief evangelist for the flickr-wannabe zooomr.com

Our business in life is not to succeed but to continue to fail in high spirits. -- Robert Louis Stevenson