Posted by Elena del Valle on June 19, 2009
In spite of the popularity of social networks in the last years, from a business perspective the question many investors are asking is whether they make business sense. Since social networks are free to users in order to become financially viable they must generate revenue from another source. Many believe the traditional media model that offers advertising space to support editorial content is the key. Others question the effectiveness of ads in the social network pages. In The Social Network Business Plan 18 Strategies That Will Create Great Wealth (Wiley, $24.95), a 191-page hardcover book published this year, David Silver says there is another way.
According to him social networks are the biggest thing since the development of bread 6,000 years ago; and the social networks that prompt consumers to try out, rank and recommend products and services are a revolutionary marketing tool that will create a huge disruption in the way we do business today. He promises readers that through his book they will discover how to create an online recommender community, a new way to launch products and services; how to show their value to vendors; operate several online recommender communities; create a loyal following and make money.
He talks about oligopsony, a shift in power from the producer to the consumer that will benefit consumers by allowing them to receive services that are provided truthfully and efficiently; provide them products that do what they are said to do; and drive prices down noticeably by reducing the need for advertising.
The book is divided into eight chapters: Eighteen Sustainable Revenue Channels, Your Recommender Community as a Theater, Mimic the Bakers and Copy Starbucks, Why Not Start Five Simultaneously? Loyalty and Passion Builders, Disruption: The Sumptuous Impertinence, Should You Sell, or Are You Having Too Much Fun? and Wrap Up.
Silver is the founder of a dozen social networks including onesite.com, iboats.com, and collarfree.com. He provided the seed capital for ActMedia, Cognition Technologies, Frontier Telecommunications, and Intelepeer.
Click here to buy The Social Network Business Plan