US social networking revenues may hit $1 billion in 2007, up from $400 million in 2006, according to IDC's "Social Networking Services in the US – Popular, Yes, But How to Monetize Them?" report.
IDC reported that only advertising scaled well enough to make social networks interesting for portals and major media companies. By contrast, subscriptions and e-commerce were unlikely to contribute much to social network revenue
"Social networks cannot guarantee a brand-safe environment," said IDC program director Karsten Weide, in a statement. "Advertisers don't want to see their ads displayed alongside illicit content, for example. The dilemma for social networks is if they start to control what content users can post, they will lose popularity, which is what attracted advertisers in the first place."
The report said that while problems underlying slow ad sales might be solved, some social networking services might never be able to attract brand advertisers on a large scale. (e-marketer.com)
