Social networking will become a ubiquitous feature of online life. That does not mean it is a business
A decade ago, this was Microsoft buying Hotmail—the firm that established web-based e-mail as a must-have service for internet users, and promised to drive up page views, and thus advertising inventory, on the software giant's websites.
This month it was
AOL, a struggling web portal that is part of Time Warner, an old-media giant, buying
Bebo, a small but up-and-coming online social network, for $850m.
Both deals, in their respective decades, illustrate a great paradox of the internet in that the premise underlying them is precisely half right and half wrong.
Web-mail has certainly not become a business.
Google has a contractual agreement with News Corp to place advertisements on its network, MySpace, and also owns its own network, Orkut. Clearly, Google is not making money from either.
Facebook, now allied to Microsoft, has fared worse.
clipped from: www.economist.com