Despite being in an economic environment where we are told lending and venture capitalism seem all but dead, it would appear as far as social networking applications are concerned there are no issues with funding. This week Twitter managed to get a cool US$35million in new funding.
What I like the most about this is according to Twitter they didn’t really need the cash but thought what the hell, if it’s on offer why not?
My second favourite part is that they currently don’t have a revenue model in place to monetize the eyeballs they are rapidly collecting. Twitter, depending on sources, has around 1.9 million users, a claimed growth of 900% in the last year with over 1 in 5 online adults (18 – 34) claiming that they use Twitter or Twitter like services.
In fact, Twitter has stated that it will not charge for any services that are currently free. Hands up if this sounds like a familiar tale in the enigmatic world of social networking application buyouts, funding and revenue conversations.
This is, however, in stark contrast to a number of companies (including some media ones) with proven business models who are struggling to raise funding in the current environment.
Everyone understands the potential of social networking applications for brand building, but it would be fair to say no-one has quite cracked it yet despite a number of monetization experiments on networks such as MySpace, YouTube, and Facebook. Experience has shown that it is much easier said than done.
This constant struggle seems no deterrent though to other networks trying to monetize their users. Meetup.com recently reversed their stance on corporate sponsors. Meetup.com has taken on a number of sponsors for brand building such as AmEx, Huggies and Sony BMG. They are able to sponsor, in different ways, any number of relevant groups inside of Meetup.com – in the case of the above brands; entrepreneur, parenting and music groups. Whether it is a success for the brands, time will tell, but it does allow for direct relationships with group organizers to be built and from all reports it seems a very positive experience for the brands and groups.
I guess my point is that when everything we read and hear is so negative it is good to know that there are still organizations that support and deal in “potential”.
