Social Networks gather people with common interests and many people enjoy being part of a large network of friends and future friends. Social networks actively promote people to join so that they can increase their clout with online advertisers. These Social Networks make large amounts of money from the advertisers that want to get their products and services in front of all of these people.This is why most Social Networks provide splendid high tech features such as discussion groups, video email, online social games, photo albums, contests, and many more exciting things to come. They create a virtual mall of fun things to do so people will not only visit but stay for long periods of time. The longer a person stays on a website, the more opportunity there is for the advertisers to place their ad in front of more people. This is referred to as the “Stickiness” of a website.But there are other good reasons for people to use social networks as well. Networking is a way for business people to meet prospective clients, partners, and customers in a friendly social way and this has always proven to be lucrative. This is similar to the reason why many companies provide tee times for their employees who are entertaining clients – it is a way to personalize a meeting during a friendly round of golf. Thus if you have a business, being socially active can make you money.These attributes of social networking have been very successful in recent times for increasing the number of people gathering on these social network sites. However, competition in this ‘niche’ is growing and will continue to grow. A new niche is needed.Most business must spend money not only to start up but also to grow the number of customers they have. Social Networks do advertise in their infancy to gain members and this usually puts them further in the “red” until they can persuade enough people to join for companies seeking good advertising opportunities to pay them for the ad space. Many companies of all types commonly must spend upwards of 70% of their revenue to maintain and grow their business. If this money is paid to advertising agencies, it only benefits a limited number of people.Enter the “monetized” social network. Since most businesses in the world are very happy if they can make a 30% profit, why not pass 70% of the advertising revenue back to the members of the social network? Base the amount of revenue each member receives on the amount of members they bring into the membership and you have a viral team of social net-workers who are being paid to increase the number of people in the network. Instead of paying for advertisements to get people to come to their website, the members become the advertisers and are compensated for their efforts. Also, since the advertisers who would pay this social networking site for hosting their ads is willing to pay the going rate for internet advertising, both the 70% share being passed back to the members and the 30% profit for the social networking site owners grows proportionally with the growth of the membership. If you can find a social network like this, wouldn’t you rather be a member there instead of Facebook, Twitter, or MySpace who keep all the profits for themselves and take advantage of the very lucrative services their members provide them?The business model of this monetized social network could be structured to reward those who work the hardest to bring new people to the website. After all, this is how money is made on the internet. So imagine if you developed a method to track both how much each member views the advertisements on the website and how many people they have invited who join the network, how this could provide the basis of a commission structure that would be fair and equitable.Consider a commission structure in a simple database that tracks who invites who and places the new people in a structure under the person who invited them. Assume that membership at this social network is free. Now imagine a common multiplication of people due to all being rewarded for bringing new people. Say Joe invites 10 of his friends to join and provides them with a link. These 10 friends join because they like Joe and they have common interests together. Each of these 10 friends have 10 friends who want to join them also. Now there are 100 people under Joe and Joe is being rewarded a portion of the advertising revenue for 100 people and he only invited 10 of them. Of course, those 100 people could have 10 friends each that they invite and the numbers of people now under Joe are 1000 and this continues. Joe only invited 10 but there is nothing to stop him from inviting far more and he continues to be rewarded for bringing new people to the website. This is the real power of social networking which will dominate the industry very soon.Each member is paid based on the amount of time they spend on the social networking site doing the things we all do such as clicking advertisements (just window shopping), doing searches, checking our email, playing games, interacting with our friends, and making new friends. The social network could also provide volume discounts to its members through their advertisers so the members can save money on the products they buy. Thus each member shares revenue in one case by the time they spend accessing the website. The other stream of income is from a commission a member gets for bringing the new people onto the site..You can do the math. For instance, just use 5% of the total revenue generated by Joe’s 10 (plus) people he invited himself, and use 2% of everyone they invited down to 6 levels below Joe. Using the example, if Joe’s group expanded to 6 levels, there may be 1 million people under Joe. Considering that there are over 1.7 Billion people using the internet and this number is increasing every day, how hard is that to believe?Also, to get a group of more committed people to get involved, you offer a premium level membership to some. This is a normal business method to employ leaders who can help manage and promote the groups who will come. But instead of being free, you charge $200 USD so that you only allow people who can commit to an idea and make a sound decision to join in that level. Right at first, you will need many of these types of people but once they have established themselves, you would close this level of membership until the size of the groups demanded more leadership or training. So you compensate these special premium members with say, 20% of their directly sponsored member’s revenue and 6% of of the revenue generated by the people they sponsor down to 6 levels.A plan such as this would expand the social network quickly and probably dominate the niche in just a short time.So, can you make money with Social Networks? Yes, and Social Networking on the Internet is ripe for just such a business plan.
Social media provides users with information via blogs, podcasts, and webinars. Users write reviews or create forums, wikis, and videos. Users connect with each other and providers through virtual worlds and social network communities.”Social networking has caused a fundamental and transformational shift in the way that people are connecting, knowledge is being shared and information is flowing,” says Charles B. Kreitzberg, Ph.D., CEO of Cognetics, a firm dealing with the human aspects of computer technology.About 50% of large companies and 75% of small ones (fewer than 500 employees) are using social media of all types. Of those, it is estimated that 40-60% have their own social network. Microsoft has the Town Square, IBM the Blue Pages, and Best Buy the Blue Shirt Nation.”Engage me, inform me, and entertain me,” says Bernie Borges, author of Marketing 2.0: Bridging the Gap Between Seller and Buyer on the Social Web. “But don’t make me read an ad; don’t send me email news. Companies are made up of people; be social with your existing and prospective customers.”Sharing KnowledgeSocial networking creates personal networks of friends and professional networks of colleagues available to offer information at the click of a mouse. Meeting others through online conversations creates and strengthens relationships, alerting employees to who knows what, where to go for information. Through social networks, people share common interests or needs who wouldn’t normally meet; they support each other in knowledge sharing and problem solving.Social networking helps form business strategies and strategic alliances. Howard Rheingold, Rheingold Associates, notes that a large teachers organization had developed and was promoting new standards for teaching math at all levels. Getting everyone together was unrealistic so what was the most efficient way to promote the new math standards?Ultimately, the teachers organization partnered with a public television station to produce and distribute videos showing real teachers teaching to the new standards. A teacher facilitated interaction on a social network with groups of teachers to share teaching experiences, student projects and best practices. One teacher noted that just reading about the new standards would never have given him the “…rich, depth of information, and resources obtained through the social network.”Enhancing CommunicationSocial networking allows people to get and stay in touch, minimizing the need for endless email streams or the wait for an ‘expert’. Online users are surprised by how quickly they get responses from employees at Sears and Kmart in response to questions and complaints posted on company websites. Timely communication fosters customer satisfaction, which creates brand loyalty and contributes to the bottom line.Online social networks at work facilitate continuous employee communication, which promotes awareness of and helps employees better understand the roles and responsibilities of colleagues in other departments. This helps employees feel a part of the whole, increasing employee satisfaction at work.Making Connections, Cultivating RelationshipsInformation and knowledge are shared with people, not organizations. We all know that creating relationships is essential to business success; social networking connects people, who often establish relationships lasting a lifetime.Two-thirds of all Zappos employees are on Twitter, where they are encouraged to let their personalities shine through when connecting online with customers to offer tips on shoe care or respond to customer questions. Customers describe it to be like having their own ‘personal shopper’ at the company! Such customer satisfaction can only drive return business.For 71 of its 75 years, Indium Corporation of America, developer, manufacturer and supplier of solders and thermal interface materials, acquired business through direct marketing and trade shows. Four years ago, the marketing director tapped an engineer on the shoulder and asked him to start blogging. Four years later, Indium has ten blogs and 15 bloggers, professional staff who cultivate relationships that have moved offline to ongoing business relationships. Made worldwide, these relationships have not only enhanced customer satisfaction and brand loyalty but employee satisfaction as well; employee bloggers feel empowered to interact with customers in new ways.”Relationships in business mean everything; the relationship should be with the people behind the site, not with the site itself. Those in the organization must foster and nurture the relationship,” states Anne Pauker Kreitzberg, President of Cognetics.By social networking, employees learn new things about their colleagues – personally and professionally. One employee was struck by insightful comments made online by a colleague, a man who appeared aloof during face-to-face meetings. This realization prompted the employee to interact more often with this colleague. Social networking opens up infinite possibilities and resources – not the least of which may be increased employee satisfaction.Engaging EmployeesSocial networking also increases employee satisfaction on the job because employees feel more engaged in their work. An $8-billion energy company was conducting a strategic analysis of factors influencing its industry. The usual practice was for the company to hire external consultants to work with its corporate officers.Recently, however, the company created an online network to engage people at all levels of the company around the world in discussions (real time and asynchronous) about industry trends, new technologies, the economy and factors influencing the success of the company. Some group discussions became so dynamic that problem-solving moved to creativity and innovation! Social networking activities made information relatively easy to locate and summarize in a report.Facilitating Talent ManagementSocial networking facilitates talent management. Among the largest law firms in the world, Latham & Watkins LLP has a private social network containing policies, procedures, forms, invitations, upcoming events, calendars, forums and photos. The network is used early in the recruiting process through to the ‘alumni’ relationship, when attorneys leave or retire from the firm.The firm grants second or third round recruits limited access to the network. Once a position is accepted, on-boarding is managed through the social network. When new attorneys show up for work the first day, they have already made connections and developed relationships with other staff. This social network stimulated a 15% increase in first year retention and a 38% increase in first year productivity.In addition to enhancing productivity, social networking creates an environment in which employees continuously contact others for advice, strategies, and best practices – just-in-time to apply it on the job. This helps minimize the need for training outside of the organization, saving both time and money.”The key to the successful use of social networking is to listen and the ability to listen is easier than ever,” notes Borges. “You identify the community you want to reach and listen to what they say. On the web, it’s easy to track interests and trends. Comments from consumers turn into leads.” Do you know how social networking contributes to your bottom line?