The open question around facebook and twitter remains how these companies will ever become profitable. Of course their solution is advertising, like so many other businesses that all rely on one or another form of advertising.
But lately the discussion has become even more interesting as these companies have provided access via web services to their key assets (content and social relationships), which will create a huge ecosystem of applications around it.
The question is if in such a model they can still find a way to make money?!
“Executives at Facebook say that as the premier social engine of the Web, it will ultimately find a way to make money. For example, it could choose to transmit ads along with the activity streams of its members, and perhaps split the revenue with the developers, though it says it currently has no plans to do so.
Of course, once you prop open the door to the store and give the merchandise away, the money-making options tend to be limited.” (source: NY Times May 3rd, 2009)
While I’m in general very skeptical on the idea that all businesses can get profitabel via advertising revenues, I’m a believer of the idea to create a ecosystem around the core assets by making them available to other application, which at the end make the whole user experience richer. the biger the ecosystem the higher the chances to become to ‘google’ of the social communities, basically create a monopoly, which than can be turned into money.