Social networking’s gold rush

May 23, 2006 | Leave a comment

Business Week has an article from a couple of days ago about the masses of investment money being poured into social networking systems in the wake of Myspace’s sale (and we all know what I think about that). A piece of Facebook costs a mean $25 million; Bebo (which for me is indistinguishable from Myspace) recently raised $15 million in investment.

What’s the purpose of all these sites springing up? This just about covers it:

“We think Facebook has a unique opportunity to reach a crucial demographic at a key point in their lives. And when a site has this much scale and brand recognition, advertisers will come,” said David Sze, a general partner at Greylock.

It’s still all about networking as a delivery mechanism for advertising.

The more fiscally minded of you might be wondering how to invest in Elgg, which is the only fully-featured standalone social networking system that you can install on your own servers (and one that more and more universities and businesses alike are turning to). The answer is this: join the development community (don’t worry, there’s no buy-in to join the table). Lend your ideas and your talent, because we’re building a system for the community, and the whole community should benefit.

We could have plastered Elgg.net with ads, kept the software closed, sold it on a per-head basis and harnessed it for market research; we would have made a fortune. But we didn’t, and for this reason, which we’ve repeated over and over again: your eportfolio is your digital identity, under your control. Your installation is your learning landscape system, under your control and featured to your specifications. Pick it up, do what you like with it; it’s as simple as that.

(Via Om Malik.)

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