Social Networks are Big, but are they Profitable?

Morning folks!!

Anytime you can accumulate large groups of people there is
money to be made. The more focused they are, the more money you could/should
make. I always use real world parallels to find unknown answers on the Internet.
For example. I use Yankee Stadium as a test. They fill the place with 50,000
people that pay to be there. All I want is to own the concessions in the stadium.
I want to sell them food and jackets and pennants and future tickets and beer
and anything else I can sell a 'Captive' audience.

The more people you have in that 'Captive' audience and the
more focused they are the more dollars you can mine. The more sales you can
make.

So back to the net. I think this concept is so simple and
elementary that few understand it. Without SALES there is no business. Show me a
business with no sales and marketing in their arsenal and I will show you a
business that will be out of business. EVERYONE MUST be a salesman. There is no
choice in business. You must sell. Don't sell and you won't eat. Most learn very
quickly. But most also don't know any techniques to selling. Don't know a sale
when they see it. Don't understand the concept of creating or closing that sale.

So until these social networking sites become George Foreman
or Ron Popeil type sales people, they will be extracting just a tiny fraction of
what otherwise can be mined.

The biggest gap on the Internet remains the lack of
understanding of how a sale is made. That actually is more important than
developing. You don't really have to develop a site. You need to develop sales
machines. Cash registers. Checkout stands. You can use other peoples businesses.
Just like Yankee Stadium. I don't need a damn baseball team to make lots of $$$.
I don't even have to own the stadium. I don't even have to build the stadium.
The land alone is my ticket.

How do you explain that you have this piece of land and for
some mystical reason 50,000 people a day flock to this piece and they are all
interested in Major League Baseball?? How do you tell the Steinbrenner that this
is a great place to build a ballpark? A place where you can guarantee that every
game will have every seat filled? Here have it! I just want the concession
stands when you build it.

So what does this have to do with Social Networks? Nothing.
Everything. The future unfolds one mystical piece at a time. It's like a puzzle
you try and figure out. It is hard at the beginning, but at the POINT that you
figure it out the answers come gushing out like an exploding
volcano.

We are soon going to witness such an event. The economic
crisis HELPS accelerate that eventuality. The one thing domain owners are the
worst at is being patient. Patience is the key to this treasure. It was the key
in 1995 and it is the key today. That puzzle out there is getting closer to
being fulfilled. It will happen so abruptly it may be hard to believe. There
will be a tipping point followed by a stampede. But I am telling you one thing, focus on meaningful domains. I think some folks are chasing shadows with many domains I see
out there. I believe we are entering a period that will give folks one last chance to buy really good domains at reasonable prices. In the next few months domains that would not ordinarily come to market will come and they will be priced to move. My advice, be patient and target the best domain you can afford to buy. You should walk away from this recession with at least a few gems. Gems you can point to and say you bought during the darkest of times. Circumstance will bring opportunity to those that are patient and know what to look for. Don't rush. I would say a 1 year window starting in the months ahead. So be patient, determined and focus on true quality. The way to quality is to insist on some stats and learn whether they are real or inflated. Better yet, learn to estimate traffic on a domain. The only reason I ever ask for stats is to see if they are selling me a bag of smoke. I know what the traffic on that domain is before I even ask. When it does not match I need to find out why. Many unknown brokers do the pump and dump. So knowing before you even ask is the real key. No traffic, no stats = limited FACE value if any at all. What was ok to invest in last year is a liability today. Most folks continue to buy liabilities instead of assets. That dog won't hunt in what we are about to go through.


Have a GREAT Day!
Rick Schwartz




4 thoughts on “Social Networks are Big, but are they Profitable?

  1. Domain Superstar

    I think one of the most exciting things about social networks is how targeted marketing can be with them. The amount of information and metrics that these companies have on subscribers is amazing. It’ll also be interesting to see how this latest Facebook TOS controversy plays out.
    John G

    Reply
  2. Dick St Cyr

    Hi Rick,
    I always read your posts and what you say i feel I can take to the bank. I have been doing the name thing for just over a year and have not made a dime but I believe in this business. Its kind of like me against the world, the only info I get is in the forums or if you are lucky enough to find a newly published book. I just registered about 40 .com names that i feel are quite valuable, I sure would like your opinion.
    Thanks in Advance,
    Dick St.Cyr
    dick03070@yahoo.com

    Reply
  3. Sergej Lebedew

    Hello Rick,
    your advice: “be patient and target the best domain you can afford to buy”.
    You have absolute right.
    I sell now premium names for really low prices.
    Best regards,
    Sergej

    Reply
  4. EM @ KING.NET

    I finally read your blog through RSS feed.
    Hi Rick,
    This is a nice post as I maintained a social network with close to 4K members already and continue to grow by 10-15 new members daily.
    Yes you are right. I need sales group to help me generate income. I am currently getting revenue through Adsense. I know I can get more if I can establish my sales team to attract new advertisers.
    Cheers,
    EM @ KING.NET
    http://www.RandomPage.com My Project.
    http://www.DNcon.com for domaineers.

    Reply

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