Last month eMarketer estimated that ad spending on US online social networks will eclipse $1.8bn (&£950m) by 2010, and social media owners are exploring how to commercialise their sites and realise these numbers.
One element of social media that has real potential for monetisation, perhaps the greatest, is social search. It is based on the premise that the bulk of relevant human knowledge – particularly the community-based, user-generated knowledge that is highly valued by individual searchers – resides with people and not in mathematical algorithms.
This concept of collective sharing adds a new and valuable third tier of search results, in addition to sponsored and algorithmic search, and will, I believe, attract increasingly larger volumes of traffic to search engines that can offer it, providing an even greater value proposition to advertisers.
Among those involved in social search are sites such as Digg, which lets users collectively decide on the most relevant news, and collaborative tools such as Wikipedia. We’ve developed a community site, Yahoo! Answers, where people can ask and answer questions on any topic.
Yahoo! Answers creates a repository for real-life experience, advice and opinion on almost every topic imaginable. As a standalone site, this offers many commercial opportunities – and this ever-growing repository of human knowledge is also the feeder to social search results from Yahoo!.
However, collective sharing also has significant commercial potential outside the search arena, and Flickr is an excellent example of this. Created by a handful of people, Flickr’s millions of users have made it one of the most popular online photo-management and sharing applications globally.
It has attracted such a vast audience because content is directly generated, organised and distributed by users. Flickr also allows developers to build applications on top of its platform. This high level of community ownership and control has resulted in the site developing a demographically broad and loyal user base – making it highly attractive to advertisers.
These sites pose many commercial opportunities because of their popularity. However, all social media sites must be mindful that the characteristics of flexibility, freedom and community ownership that initially attracted their vast audiences need to be carefully balanced when considering monetisation – as history has proved, audiences can easily disperse to other destinations if they feel a site has become too commercial.
Stephen Taylor is regional vice-president of Yahoo! Search Marketing