Social Networks and New Business Models

With Amazon acquiring Abebooks (and a 40% share in LibraryThing with it), it seems as good a time as any to take a look at some of the business models online social networks are creating. (Attempting to create? Maybe.) In any event, it’s not just about Google Ads anymore.

  1. Seek Sponsorship Onsite: Google started it with smarter ads triggered by the words potential customers were searching with. MySpace uses banner ads that may or may not have anything to do with your profile. Facebook creates ads that populate depending on how you describe yourself on your profile. Change your status to engaged? All of a sudden, all you see is wedding diets, photographers and dress ads on your feed. I wonder what I’ll get if I change it back? Singles clubs? How about plastic surgery ads…that’s mostly what I got before.
  2. Seek Sponsorship Behind the Scenes: LibraryThing is a gold mine for online booksellers who create recommendations to help facilitate a browsing experience for their customers, not to mention an amazing source of qualified buyers to entice over to an ecommerce site. In another mutually beneficial twist, LibraryThing also uses bibliographic information from Amazon.
  3. Be the Sponsor: The Chapters/Indigo online community is based on people having brand loyalty to the bookseller and wanting to find out more about other readers with similar tastes. The network is built right into the site which allows recommendations, reviews and interaction to be integrated immediately into purchasing of products.
  4. Provide Free Content for All and Paid Content for Some: Traditional subscription models (think online news) haven’t really come to fruition on social networks yet as it’s hard to charge for content when it’s user provided. Then again, Facebook offers much more sophisticated analytics when you start paying for ads. Everyone can build a group but not everyone gets member informationfor that, you pay.

And the caveat: as always when books are being discussed, advertised and reviewed, it’s impossible to quantify the exact sales impact. “It can’t hurt” isn’t exactly a model for revenue but it’s still a start.