Place Your Bet on Ad-Driven Social Networking Sites, Or Not

The Bang

Online social networking giants such as Facebook and MySpace have become part of a cultural phenomenon. Increasingly, these sites are turning into the de facto way for people to keep in touch with friends, family, and even strangers. A report published by Datamonitor estimates revenues in social networking sites will reach US$2.4 billion by 2012.

As social media grabs an increasingly larger share of online time, Joe Chen, chairman and CEO of Beijing-based Oak Pacific Interactive, envisions that individuals will use social networking sites as their one-stop destination to handle personal tasks. For example, users will leverage their online social network as a personal portal to send messages, look for a new job, manage personal calendars, check out potential dates, and/or play social games with other online users.

According to Asian Venture Capital Journal (AVCJ), industry experts predict that online social networks will prosper during the current depressed economic cycle as people look for less costly ways to amuse themselves. In China, for instance, teenagers can play online games in Internet cafes all day for only RMB 10, or about US$1.50.

But does this flurry of activity translate into a good investment opportunity for you?

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