There is no doubt that social networking sites like Facebook and Twitter offer unbelievable business opportunities. However, when businesses rely too much on the emerging medium, still in its infancy, there can be problems.
This week Twitter announced that it will no longer allow third-party applications to advertise in their live tweet streams. But guess what was announced last week? In-stream Twitter advertising platform, Ad.ly, just secured an additional five million dollars of angel funding. There is no word yet on how Ad.ly will deal with this, but it seems pretty bleak for the young startup. There entire business model will be obsolete when Facebook enacts this new restriction next month.
The folks who probably are affected most by sudden regulatory changes from the major social networks are developers. The rules for developers are constantly changing, especially on a major platform like Facebook. For example, Zynga, developers of Farmville and Mafia Wars, two of the most popular third-party apps on Facebook, face this same danger. What if Mark Zuckerberg, 26 year old CEO of Facebook, wakes up tomorrow with an itch in his throat and decides he doesn’t like cute little farm animals and doesn’t want them on his site?
Last year the enormously popular website Tr.im ceased operations. Tr.im was a service that allowed Twitter users to shorten long URLs to preserve space in their 140 character tweets. After offering the company for sale and failing to find a buyer, they had to shut down. A company representative said there was just no way to monetize their site traffic. Isn’t that something they should have thought of sooner? Anyway, all of the millions of people that used their shortened URLs now found them completely useless. Dead links everywhere!
Of course I am not advising that you drop your social networking efforts or cancel your Facebook account. We have seen lots of success driving new people to our brand through Facebook, YouTube and Twitter. But with companies increasing their online spending every year, you have to wonder if some of them are putting all of their eggs in one basket. Smart marketers are finding ways to utilize digital and traditional mediums through highly effective integrated campaigns. These campaigns take advantage of the best of both worlds, which makes a lot of sense given how volatile online networks seem to be.
