Why is it so hard for social media/networking sites to monetize their users?
mattmaroon: The one thing I can tell you for sure, having done affiliate marketing on the big 3 search engines and the big 2 social networks, is that users on social nets click often but don't convert. The click through rates are lower than you'll see on Google, but not as much lower as you might think if you do a good job with the ad and the demographic targeting. But the conversion rates are beyond abysmal.That seriously depresses CPC bids, which will prevent Facebook/Myspace from really monetizing well from that source. It's a shame too, given that the reach is massive.I think it's because people just go to social networks to hang out. They specifically don't want to buy stuff, and when you try, you're like a telemarketer calling a college kid at a frat party.I was really on the fence about whether or not Facebook would ever be able to somehow find a business model that didn't involve people whipping out a credit card somewhere (i.e. not freemium, virtual goods, etc.) until I tried that experiment.