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Bubble 2.0 will burst in 2008

I guess I wasn’t all wrong with my own little prediction for 2007. There’s an interesting piece by Robert Young over at GigaOM:

For Social Networks, 2007 is about MONEY.

2005 and 2006 were years that proved that social networks were not a passing fad, but superior monetization is what will prove key for social networks in 2007.

In a nutshell:

  • Social Networks are effective as brand communication platforms.
  • People drive Social Networks. Advertising must work with, and through, those people.
  • Less (advertising) is more.
  • Scalability is key.

Very well thought out article, I suppose. What I don’t quite understand is this: Aren’t all those social networks out there, competing with each other for advertising dollars, going to decrease rather than improve ad rates? Sure, there’s still lots of advertising money that could be moved from print to web, from traditional online media to social networks; but is there enough advertising money around to feed all those hungry mouths, and won’t the general rule of Supply and Demand in collusion with Power Laws see to it that only a few big players will be able to make considerable money, leaving the vast majority of smaller networks to fight tooth and claw over a few breadcrumbs? And how much longer is the advertising industry able or willing to fund the Web 2.0 venture capital Bubble anyway?

So here’s my premature and totally unfounded prediction for next year: If 2007 is about monetization, 2008 will be about leaving the sinking ship on time. I’ll show you my exit strategy if you’ll show me yours.