like Facebook and MySpace have been among the most successful business ventures
of recent years.
Facebook alone has 50 million members
worldwide and is now valued at £7.5bn.
Inevitably, imitators have sprung up with
variations on the theme, eager to tap into this lucrative market.
One such company is American networking site
Yuwie.com, whose unique selling point is that it promises to "share
wealth" with its members.
In what could be the first example of Social
networking meeting e-commerce, Yuwie''s founder Korry Rogers says he will give
members more than half of the site''s advertising revenue - just for logging on
and inviting their friends.
"The whole goal of Yuwie is for people
to get paid for what they''re doing already," he told the BBC News website.
Mr Rogers, 33, says some of
Yuwie''s members are earning between £200 and £250 a month, although payments
"fluctuate".
"Yuwie users get paid every time they
log on, send a message, upload a picture or invite someone to join."
"If someone only refers three of their
friends, who refer three of their friends through 10 levels, that one person
will collect a percentage of advertising revenues from about 88,000 end-users,
which could be about $8,800 <£4,427> per month for that person."
Pyramid scheme
Some say this is little more than a
technological version of the reviled pyramid scheme.
However, Mr Rogers, a web designer from Oklahoma, disputes this
because he says he does not charge his members, unlike traditional pyramid
schemes.
He insists he does not want
people to join Yuwie just to make money.
"I want people to join because it''s a
good networking site not because I''m paying them.
"I just think it''s a cool idea to pay
the users who are providing all the content," he says.
The site is certainly proving popular for
those who do not mind lots of pop-ups and flashy graphics.
Yuwie users apparently love adverts, though,
because "they know they will share in the revenue".
Since launching in July, Yuwie already has
344,444 registered members, with nearly 50,000 joining in December alone.
Yuwie is now ranked among one of the top
2,500 websites in the world, according to alexa.com, which tracks web traffic.
So can we really make money from the details
that we share so freely at the moment?
And is this a logical
evolution for social networking sites, who have made enormous strides this
year, but may struggle to keep the momentum next year?
Analyst Steve Prentice, chief researcher at
technology consultants Gartner''s, thinks not.
He cites the example of Facebook founder Mark
Zuckerberg, who was recently criticised after introducing an unpopular
advertising system, Beacon, which "shares'''' details of users'' purchases on
partner websites.
Mr Prentice says the majority of users of
social networking sites are not motivated by a desire to make money but to connect
with and make new friends.
He says: "It seems to be counter to the
philosophy of these social sites. They are about belonging and reflecting an
individual''s community.
"The idea of making what is,
essentially, a few fractions of a cent out of your friends would sit
uncomfortably.
"My guess is that people would react
quite angrily because they value their privacy very highly.
"There are a lot of individuals on
social networking sites who have an antipathy towards commercial enterprise and
it''s possible to get it very badly wrong.
"People can migrate very quickly to a
site but can vote with their virtual feet very quickly, if a site is against
their ethos."
''Potential abuse''
Mr Prentice also warns potential users to
remember that, once money starts changing hands, they could attract the
attention of Inland Revenue, FSA and other regulatory bodies.
More importantly, he believes sites like
Yuwie coueputable business model" because
of the "potential" to abuse the system.
"As soon as you have a situation where
you are paying people to join, then you have potential abuse, with people
manipulating search engines or paying someone to view their page.
"Then problems might arise regarding
spamming and it very quickly becomes a non- reputable business model," he
says.
Mr Rogers admits Yuwie has suffered in the
past from people using scripts and programmes to falsely inflate the number of
page views they got.
He insists it now has strict measures in
place to stop people abusing the page view system.
Mr Prentice says it is also important to make
a distinction from sites such as You Tube and Revver, which recently announced
they would financially compensate users who produce and upload content.
"Cases like You Tube are different as
they are about creation.
"You Tube is going to make money out of
the video that person has created and uploaded, so it makes sense that they
share in the profit.
"In this case, it is a reward for effort
and creativity - as long as it doesn''t infringe copyright - and that is within
their ethos.
"I don''t think the same thing would
appeal to Facebook''s core users."
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