"""That's a mistake media companies, which invested heavily and with high hopes in social networking, are only just starting to understand. News Corp. is struggling to make sense of the $580 million it paid for MySpace, Time Warner has publicly regretted the $850 million it spent on Bebo, and Yahoo recently shuttered Geocities, for which it paid some $3 billion back in the late 1990s. Despite these troubling signs, Facebook has raised more than $300 million from private investors who value the company at over $10 billion, and on Friday Twitter announced that it has completed a new round of funding, reportly raising $100 million at a price that values the young social network near $1 billion. What are the chances that these are good investments? Facebook mentions that it may have some profits, and Twitter talks about generating revenue soon, but because these companies are private, the real data are secret.
Here is my experience: I launched the social networking site Tripod in 1995. By 1998, it was the eighth-largest site on the Web. But Tripod was never a successful business. Social networks aren't great places to advertise. You can't charge users for their services. And they never gain enough momentum to survive in the stock market. Indeed, no social network has ever made it as a public company."""#hindsight #history