Social Software, Social Networks – No Freaking Business Model

I love it when someone goes "DUDE! – Do you see the freaking elephant in the middle of the room? No really, it’s right there! THERE! LOOK!"  Jason Calcanis says

The big problem with social networks is the business model. … when people are on social networks they have two choices:

1. Interact with people: flirt, find a date, find a mate, hook up, make friends, etc.
2. Click on advertisements.

and he goes on

… the fact is social networking is a bust for advertisers today. We’ve seen this before with chat rooms, listsrvs, message boards, and email clients. They are amazing for traffic, and they are horrible for advertising.

If social networks are going to work for marketers they are going to have to nuke the current model for advertising and do something much more creative…. creative enough to trump the value of hooking up.

I love the warm fuzzies of Web2.ooo0000 hype, but so far the only exit strategy I have seen is Yahoo!  Yahoo even lectured us at eTech that they "only buy if you have API" (that was the message – it wasn’t quite that catchy.)  If we weren’t sure Yahoo was the only exit, then please get with someone on Sarbox.

And tomorrow we can discuss how Yahoo and Google are *not* content providers (cough) and they don’t compete with their advertisers (cough cough).

I’ll be thinking about this part of the above post – "do something much more creative" – at the ACA conference in the AM.