An interview in the Sunday Times yesterday said that Bebo head Michael Birch seemed prepared to wait before earning much money from the service:
Birch, 36, is almost dismissive of the need for Bebo to generate revenues at this stage. For the next two or three years, his priority is to establish the firm as one of the global leaders in social networking. The big challenge is in America, where Bebo is currently a distant third behind MySpace and Facebook, a college-based site.
“At the moment there’s a race for traffic,†says Birch. “Implementing a successful business model does not necessarily help in that goal. There are so many avenues that social networking can go down.â€
So Friday’s revelation that Bebo is planning a mobile service isn’t about revenue? Pete Cashmore notes:
…it seems that Bebo Mobile is a step closer — mobile phone group O2 is in talks with the company, although discussions are still at the early stages. There were rumors earlier this week that Bebo plans to extend the site via SMS, rather than the WAP-based services that other social networks are pursuing.
As Pete says, SMS messaging is extremely popular here in the UK, far more so than WAP or Mobile Web, where Bebo is also the number one social network. It’s also a technology that’s already been well integrated with other youth media such as voting on Big Brother or Pop Idol.
Teaming with one or more of the mobile operators to share revenues from moblogging, update messages, photo, ringtones and video services seems like a win-win for both the operators and the social network.
It may seem ironic that Web 2.0 social networks may ultimately find one of their best revenue streams from working with a completely different area of the telecommunications industry. But if brand advertisers are not yet ready to pay high rates for what is perceived as low quality social network traffic, and the users themselves are resistant to advertising, then it’s certainly time to move sideways.
This seems part of a wider strategy to look at non-orthodox sources of revenue. Jim Scheinman, the Bebo’s VP of business development and sales told e-consultancy something pretty similar in regard to Bebo TV. They’re working towards something called ‘Engagement Marketing’, which seems like a good move under current circumstances:
Web 1.0 advertising is dead. If you look at Yahoo’s last quarterly numbers they’ve seen a decrease in graphical advertising when in fact online advertising has gone up. It’s not that people aren’t buying banners any more, it’s that they’re not core any more.
Birch himself spoke out in August about traditional media buyers not really ‘getting’ social media. Bebo certainly does care about revenue, though. It just isn’t the revenues you might initially imagine that it is chasing. Let’s hope it can move to the point where it can ignore those not agile enough to keep up.
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