Social Network Alchemy: The Five Ways of Turning Users Into Gold

This post is by Tomasz Tunguz from Tomasz Tunguz

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Derek Powazek questions the intrinsic economic viability social networks in his post “What If Social Networks Just Aren’t Profitable?”. It’s a logical question to pose in the aftermath of the Digg sale and the wobbly Facebook IPO. There is one clear lesson from Digg’s sale: the technology that powered a once-massive social network is worth about $500,000. The Big Digg Lesson The Atlantic summed up the essence of social networks' business models brilliantly.

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