Today, at Capital IT (see my previous post), Marc Simoncini from Meetic has pointed out that social networks were expensive (and long) to build while their business model (advertising and/or subscription) was unclear. Marc was talking about Friendster, Friendset, Orkut, etc. I think Marc is right. I have never understood how VCs could input so much money for these new "communities" concept (remember French Multimania?).
Let's think about it : you usually build a "social network" around common interests (say landscape photography) or for a dedicated goal with people you know (say your birthday party photo sharing). Would I have any interest to build a community with friends I already know. The answer is yes if I consider a particular topic as the core of our social ties (say tennis). Otherwise, I am afraid not.
Nevertheless, social networks with professional objectives (see LinkedIn) could be more valuable because I clearly see the added value for the end-user : sales, partnership, job search, etc.
I will follow carrefully what's going on social networks and business networks.
I have been at Capital IT (Paris, France) this afternoon which is a 2 days meeting between high tech entrepreneurs and VCs. I have heard Denis Payre keynote (ex Business Object's founder and actual head of Kiala) talking about the long tail in european e-commerce industry (see also the Wired article about it). I am happy to see that european e-tailers have faced the US "very challenging" competition.
Then Yahoo Europe General Manager (Dominique Vidal) talked about Yahoo's acquisition of Kelkoo. He said one of the reason Yahoo bought european Kelkoo is its global presence in Europe and not the technology (shopbot). Obviously, the european market is more complex than the US one, especially for US companies with pan-european expansion plans.