Deloitte analyst Paul Lee talks of the importance of – and difficulty in – converting thousands of users into thousands of pounds.
Social networks must this year put monetisation above growth in order to survive, according to Deloitte. The call comes ahead of the release of Deloitte’s media predictions report for 2009.
Deloitte said while social networks have previously been valued on their member numbers, the harsh economic climate means they need to start justifying their worth to investors. While Deloitte pointed to advertising as being an obvious source of revenue for the networks, it warned against relying on it entirely in 2009 as budgets are predicted to be slashed.
Linkedin – the hugely popular social network for professionals – may have found a solution with the launch of its Intelligent Applications (InApps) platform, which the company says will make business-focussed applications available to its 30 million-plus users. The only non-US supplier involved in the process is the UK’s Huddle, which will be providing its project, collaboration and sharing tools for working with connections.