Monday, January 12, 2009

Are Social Networks Sinking?

A number of current factors are having an impact on the health and viability of social networking sites. According to Technology Review, dire market conditions have caused business-focused networking sites such as LinkedIn and Jive to slash workforce by 10 and 40 percent, respectively.

A lack of new solid small business plans, shorter runway for getting new ventures off the ground, and reduced growth potential are all coming to bear on the future shape of the social network landscape.

Even before speculation of the potentially profound effect of the economic downturn, some experts had already been raising concerns about how social media firms might make money.

Where will it all lead? In the absence of a solid business model to sustain social media firms, will they collapse? Will the smaller firms all be eaten up by giants such as Microsoft and Google? Read the article here.

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