Monetizing social media

“A lot of expectations are coming down in terms of monetizing social media” says Paul Verna, quoted by Daniel Lyons in his latest article debunking some of the myths around blogging. Most (99.99%) blogs don’t make money and at best create value in an indirect way (exposure, network, invitations).

I agree with the main point of the article: the business model for social media is yet to be found. It feels like 2002, when Google was still looking for a model while Overture was leading the way with a far from perfect offering. From the 2002 New York Times:

[...] while Google is the leader in searching Web pages, it is a tiny force in the rapidly growing market for selling advertising related to search. The dominant player there is Overture Services, which began life as GoTo.com, a search engine that let Web sites bid to be listed and ranked in searches. (Whoever pays most gets listed first, the runner-up is listed second, and so on.)

Users never warmed to GoTo, but advertisers, especially small ones, jumped on it. What better place to advertise your cozy inn than on a page where someone is searching for information about the Berkshires? So Overture regrouped, and it now offers to split revenue with sites that display its listings on their search results pages. Yahoo, MSN, America Online and all the other major sites — except Google — have agreed.

Link (thx Bruno)

There is money in social media because they are pretty good at captivating audiences, and there has always been money in attention. But nobody has found the perfect solution yet. Is there a new Google brewing somewhere, a new model that will storm the world of advertising?