A Whole New Take on Social Networks

August 22, 2007

I just ran across an interesting article from Newsweek that talks about asmallworld.net. The site is a social network with…. GASP…. a closed door policy. Only the rich, famous, and elite are members of the site, having gotten in via an exclusive invitation only policy. Whats interesting about this is that this flies in the face of most Internet business model. Accounts on the site are free, so revenue must come from advertisements (nothing new about that). But their “invitation-only” model seems to be self-defeating in that it intentionally keeps the number of eyeballs looking at the site smaller than it could be, therefore (theoretically) lowering the value to advertisers. Elite brands like Jaguar and Rolex would still find the site enticing, but how long can the creators of the site fight the urge usher in several more users in order to show a larger number of users to potential advertisers? The site started with around 500 users and grown to 260,000 in three and a half years. Impressive, but not staggering when you consider that a B List site like myyearbook.com has accumulated over a million users in half that time.

It seems to me like the creators have missed the boat on this one. They have created a country club on the Internet and treated it like the city park. Why not charge these “elite” users a subscription fee? If you target those types of people, isn’t an outrageous subscription fee just validation that the site is truly only for the high rollers?

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