Murdoch on Twitter: Basic business philosophy
07/03/09 06:54 AM Filed in: Twitter
When I read that Facebook was valued in the billions of dollars the quote “there is a sucker born every minute” popped into my head. We’re talking about a social media site that has yet to turn a profit and is controlled by users rather than business and marketing people. While I am a big fan of Twitter to stay on top of breaking business news and help filter out articles on the Web I was also wondering “how the hell they are going to make money”?
Let’s face it, the reason anyone goes into business is to make money. Nobody says “lets build a great website and lose millions of dollars”. Yet there are more and more sites that are springing up everyday that clearly show that the owners cut the classes on business planning and accounting.
The challenge for anything we do on the web is to balance business objectives with consumers wants and needs. It’s also the hardest principle to learn and implement. Facebook and Twitter clearly show that an idea can take off but they also show that the owners did not have any idea how to make them profitable. In the health online world a number of social media health sites have started to appear with the same problem. They are building an audience but have no idea how to make money. If they go to the drug companies for money they are “dancing with the devil” and people will leave their site. So what are they to do?
Business planning 101 usually has a provision that indicates how you’re going to make money. It’s normal for new products or brands to be in the red during the launch but the real difference with social media is that the users are in control not the business people. Changes later can mean a loss in the audience and today eyes are dollars.
