As the economic sky is getting covered with clouds of financial crisis and deepening recession, people start questioning the web 2.0 oriented business models, or more so the lack of thereof.
Recently I read about Mark Zuckerberg making statements suggesting that growth is the primary goal of Facebook at this point, and not revenue. They do a pretty good job with the former (even though it is becoming harder), but at the end of the day it is the latter that matters. Basically what he said in an interview to (German newspaper/site) NAZ.com is that Facebook has yet developed a business model, which is really mind boiling provided the amount of investments the receive.
In this light, I started thinking about the different approaches the US and the Russian social networking enterprises are taking. And I wonder if at some point, Facebook and others will try to adopt some of the methods they Russian counterparts are using. I think that Russian enterprises are not as “spoiled” in terms of investments and in terms of their investors’ patience. Yet, there are social networking websites in Runet and they are rather blunt and creative in the way they are making money. I have some degree of familiarity with two of them – Vkontakte.ru and Odnoklasniki.ru.
“Vkontakte“, which is a blunt rip off Facebook, is rather mysterious. It does not have any ads (but does have a lot of spam) and it is not clear at all how it is funded (to a degree that some conspiracy theories suggest that it is a government project aimed at spying on Russian citizens). Yet, it seems to be the most popular social networking website in Russia these days. Some suggest that it has cloned FB’s business model, but I could not see the exact parallel. They do allow you to buy virtual gifts in Vkontakte, but I have not seen a single add. The last fact actually attracted some English-speaking people who miss the old FB or cannot access it from work.
I find “Odnoklasniki” more interesting in the sense of monetizing on social sentiments of their users, even though it is not as popular as Vkontakte (and it probably appeals to a different demographic, but that is for another post). To start with, they have a pretty horrible interface design. FB (and as a derivation, Vkontakte) have done a significantly better job in making a useful and interesting website (or should I say “platform”?). Odnoklasniki is very simple and not very intuitive, but apparently it works. In addition to (supposedly contextualized) ads, Odnoklasniki is experimenting with making money off the very basic human needs that bring people to use their website in the first place.
For example, Odnoklasniki has a very different view of privacy and unlike FB, it always shows you who and when viewed your profile. Yet, they understand that as much as we want to know who is looking at us, we don’t want others to know that we are looking at them. So, if you would like to remain invisible as you visit other people’s profiles, they can offer you this service for just a little bit over US $4 a month. Apparently it works! You know that because even when an “invisible” user visits your profile, you still see that there was a visit, you just don’t know from whom.
Another example is the picture rating system they use on the website. Odnoklasniki allows its users to rate other users’ pictures on a 1-5 scale. This is of course another socially sensitive issue. On the one hand, you would probably like to complement people you like by giving them the highest rating possible. On the other hand, it is a social networking website, so it has a little bit of a beauty contest component to it. In other words, you want your pictures to have high ratings, as this probably signifies popularity.
Odnoklasniki are using (or shall i say exploiting) both sentiments. On the one hand, for a little bit over US $4 a month, you can get an ability to give out a 5+ mark to other people’s pictures (5+ vs. 5 is like A+ vs. A). On the other hand, you can insure one picture at a time in your collection from getting low ratings. When you apply this service, the system will automatically add 1 point to any rating below 5. Surprisingly, this service is free, but it is “sponsored” by an insurance agency, which proudly advertises itself when you are trying to insure your pictures and I assume once you apply this insurance.
These are just a couple of examples and some of the serveices are rather new. I don’t know how viable the business model of Odnoklasniki is, but I do find it fascinating that they are trying to monetize on the social aspects of these networks, which is why people people are using these domains in the first place. What do you think? Can/should FB think about other aspects of the platform they’ve developed? Should they view it not just as an advertising platform? Can/should they try making money out of it?