The Day Social Media Became Important

On June 1, 1980, Ted Turner flipped the switch on a 24-hour cable TV channel devoted entirely to news. He stuck out his jaw, folded his arms and declared his new venture would sign off at the end of the world, not before. Everywhere, people who knew better sniggered and wished they had offered Captain Outrageous the title for a bridge. Nobody wanted to watch the news that badly. Was there that much news? Of course not. Silly southern man. Harumph.

On January 28, 1986, CNN got its watershed moment when the Challenger shuttle exploded over Florida, killing high school teacher Christa McAuliffe, who was historically aboard. The country, including President Ronald Reagan, stopped working and tuned into nonstop coverage. The skeptics were converted.

30 years later those skeptics are reincarnated as Twitter haters. In the near future they will look back on June 13, 2009, as the day the paradigm shifted, that web users overtook news producers in making programming decisions.

These "twits" did so not with large capital investments in satellite and cable technology and broadcast centers but with the contracted and connected state of the world. CNN, content to report that an election in Iran was over and the status quo remained, then give way to pop culture drivel, chose not to report on the escalating conflict in the street as Iranian citizens bravely protested the results.

It should be noted that Fox News and MSNBC committed the same sin.

Tweets from ground zero of the violent protests in Iran would not so easily turn their back on this strife. At a microblog per second, CNN and the Iranian oppressors got theirs. When the American mainstream media turned its back, Twitter revolted. The social network, astutely realizing the gravity of the moment and, undoubtedly, an opportunity to secure its place in history, delayed planned site maintenance so that communications could continue unabated. Not convinced social networking grew up this month? The U.S. State Department disagrees.

Folks, the mainstream media lost its way some time ago. Tolerance of plagiarism, a lemming mentality and a focus on ideological demographic appeal have destroyed what once plausibly masqueraded as journalism. For now--right now--you can turn on CNN and see Anderson Cooper's concerned face as he tosses to an authentic Christiane Amanpour. You can thank Twitter users for that.

In a week, we'll be back to American Chopper interviews. When that happens, remember that there actually are important things happening in the shadows of the world, and for those who care to look, Twitter is providing a lens and some light.

Facebook: Real Money for Virtual Goods?

First, thanks to my great friend Brian Olson for this blog title.

Second, if you've read me before you know I have this crazy idea that sooner rather than later, regardless of how popular you are, if you're going to be in business you have to make money. You also know I have my lens focused on the social media industry. It's great that Facebook is getting itself valued at $10 billion with a "b," but the crash is looming if it can't leverage its membership toward profit.

The latest thought thrown on the wall? Here it is, as reported by Rich Cherecwich of iMedia (iMedia has lots of great stuff) on June 3, 2009:

Facebook has officially entered the mainstream, but the über-popular social network still faces doubts about a monetization strategy. That may change with a new internal payments plan the social network is currently experimenting with that could help it become less reliant on advertising, the Financial Times reports.

The new system allows Facebook members to purchase credits and then use those credits to buy virtual goods through third-party applications that run on the social network.

Users are apparently spending big money on games and applications that run on the Facebook platform, to the tune of an estimated $500 million this year. Facebook will retain a percentage of every transaction, which could represent up to one-third of the company's income, according to the Times.

So I put this out there on Facebook and asked my friends for their thoughts. Then I stole them and put them in a blog. I'm like that.

Andy Mikesell, MBA, Director of mCommerce:

I think the application play is a tough one and creating revenue will be a small organic play. iTunes-like stores for digital goods is pretty saturated and Facebook as a concept is a free commodity. The statistics for Facebook are impressive; has it peaked at the consumer level in North America?

Andy also suggests a custom, enterprise-level model for revenue. Andy's pretty sharp and now that I don't live in a frat house with him I can say that with a straight face. Here's why Andy's right, that it's a "tough play:" 1) Most of these third-party applications are junk. The fact that they're free reduces user expectations and mitigates complaints about poor product quality. Dealing with complaints costs money. 2) A difference between Facebook and LinkedIn (you needed another one?) is that the former lets anybody just post their applications. The latter has a rather stringent approval process, the opening criteria for which most who submit to Faceook cannot satisfy. Will this move bring about a change in Facebook's standards? That would mitigate its profit from the move.

Admittedly, when it comes to calling Facebook applications, "junk," mine is but a layman's opinion. Karen Pellegrin, owner of Kelpworks Creative, however, is a bona fide expert:

As one of a team of game designers myself, none of the games and apps on Facebook are good enough to start charging me. Most of those apps are created by inexperienced people on facebook and just random thoughts... which is fine if it's free. That's just part of the fun of Facebook.

However, they better start hiring actual game developers and boosting their monies to hire those developers, or they are going to bomb out in the end. Just take a look at
the success of mini-game sites like Popcap. They hire lots of designers and developers for their games and they know who they are... a game site, not a social networking site.

So, yes, Steve, some people will buy anything. The question then becomes, what does it cost you to sell it to them?

Karen's right about something else, too: Trying to be all things to all customers is a sure path to failure. Going through an identity crisis on Other People's Money is a great way to go broke, quickly.