Social networks face crisis

Dozens of social networking companies may fail next year due to sluggish advertising and a new dot.com bubble threat to explode, according to experts Deloitte.

Web sites that are surviving may be forced to add to their revenue from paid subscriptions, sell member data, or find additional resources, consulting firm's researchers, check The world's second-largest math team, Deloitte said. This bleak forecast comes as eMarketer estimates that growth in digital advertising has halved, from 17.2% to 7.2% next year.

Social networks face crisis Picture 1 Deloitte's research shows that revenue falls while the cost of storing electronic data has skyrocketed to more than $ 100 million a year for large websites - when users want to upload more photos and videos online.

" The book value of some social networks may be reduced and some companies may fail completely if finance runs out ," said Paul Lee, Deloitte's director of technology and telecommunications research. . ' Average revenue / user of some of the largest new media websites is calculated in coins per month, not in dong .'

' This number (too small) compared to the average revenue of thousands of dollars per cable subscriber, print newspaper reader or a movie fan '.

Analysts estimate there are more than 1,000 social networking sites on the Internet, with 100 large players depositing records of about 22% of UK Internet users. The most popular websites, including MySpace, LinkedIn, Twitter and Facebook, may be able to recover quickly in the context of slow advertising. However, many social networks among the most popular social networks like Facebook and Twitter do not benefit greatly.

" Both [Facebook and Twitter] have not shown they can earn money on the same scale as their users ," said Madan Sheina, an analyst with software and telecom consulting. Twitter Ovum. " Twitter has not yet outlined a plan to make money from its blog site. With Facebook, revenue is always a problem . '

Facebook costs $ 15 billion when US software company Microsoft spends $ 240 million to win a few shares last year. Facebook founder Mark Zuckerberg stressed that his focus is on growth rather than making money over the next few years.

However, there are signs that Facebook is feeling the pain of recession because they recently canceled plans to allow employees to sell stocks early.