As we have mentioned a few times here on the blog, C3 has been been paying special attention to social networking sites in the past several months. That work has spilled over here on the blog in a variety of ways, looking both at the business models and deals struck around the business models for these sites, and perhaps even more interestingly, the types of behaviors that take place in these online communities.
For me, it is key to distinguish between Facebook the company and site, and Facebook the community of people, just as it is for MySpace, or even sites like YouTube. Especially when lawsuits and accusations start getting thrown around, precision of language matters, as squabbles between corporate parent entities often instead seem to be conversations that show disdain for the community of users who inhabit and empower these sites.
In my mind, it is crucial to realize that these sites mean nothing without the people on them, and that any discussion of the brand equity of a YouTube or MySpace has to be tempered with the realization that it is directly the users who provide that value and who control the continued vitality of these sites.
But recent stories circulating about social networking companies making the splash by going public on the stock market adds an extra layer. As this Reuters and Hollywood Reporter story emphasizes, the rush for going public could be coming. Classmates is preparing to make the leap, leading others to believe that companies like Facebook and LinkedIn will be watching closely to see if they can make the same move.
The article points out, "Many Wall Street and Silicon Valley observers have suggested Facebook is likely to eye an IPO during the next year or two, and they have estimated the company's overall value to be in the billions of dollars--well above a reported $1 billion takeover offer from Yahoo that Facebook founder and CEO Mark Zuckerberg rejected last year."
It's easy to see where the profits come from, but I have some of the same questions I have about the "two publics" of journalism (look here). First, will the investors of these companies come from the same pool of people who have profiles on the sites, and is it possible that the interests of the public investors and the interests of the public(s) in the communities using this site could come into conflict?
Facebook has proven how holding out and accruing value can be a great benefit, especially for a company in which the worth is hard to really value, since there is no "there" there, other than the people who make the site have value.
Meanwhile, what does Matt Webb say about BBC Olinda being "radio for the Facebook generation?" Look here. And see this piece from TelevisionWeek about two Fox initiatives for launching sites particularly for high school communities focusing on high school life.