Web sites such as Facebook and MySpace have large memberships but big profits from social network Web sites elude U.S. corporations, industry analysts say.

Facebook has 70 million active members Chief Operating Officer Sheryl Sandberg told USA Today. The company is valued at $15 billion, but profits remain slim, the newspaper reported.

Bill Eager, co-founder of a bSocial Networks, said the 850 social Web sites currently online could bloom to 250,000 by the end of the 2008. But, you can't have a $15 billion market valuation based on advertising alone, he said.

How to squeeze profits out of social Web sites is the single most-asked question in this field, he told USA Today.

Some fear sites are over-valued and will never make much cash, the newspaper said. Others say the millions of interactions among millions of participants -- through games, chat rooms and profile postings -- create opportunities for a build-it-and-the-profits-will-follow industry.

Facebook, beginning its fourth year, expects to double revenues to more than $300 million in 2008.

Once you have engaged users, the revenue will follow in that order, Sandberg told USA Today.

Copyright 2008 by United Press International


Publication date: 12 May 2008   

Source: UPI-1-20080512-08364900-bc-us-webnetworks.xml

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