08/30/11 5:55PM By Rich Nadworny
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(HOST) From search engine to social
network, commentator Rich Nadworny says the virtual universe is
(NADWORNY) The U.S. goes through a crisis on the default limit, the unthinkable happens in Norway, and what are people buzzing about online? Why Google+, the new social media network, of course. Now you may ask yourself "Do we really need another social network to spend (or waste) time on? Aren't Facebook, Twitter and LinkedIn enough?"
A few weeks ago, Google launched its new attempt to horn in on the social action with the new site Google+. Previously Google had launched Google Buzz that, after much fanfare, quickly disappeared from view. This time Google took a different approach. It released access to the new network slowly and selectively. It invited in people with large followings and assumed, correctly, that they would blab endlessly about it.
Now, to be fair, Google+ does have some features other social networks don't. It allows you to easily group people into different circles, like one for family, one for friends and so on. That makes it a lot easier to turn off some noise and tune in more selectively. Google+ makes it easy to share photos and videos, and it doesn't put a limit on how much text you can write. It's built to encourage longer discussions.
But while that's all well and good, the real reason Google wants to get in on this action is money.
We may be seeing a repeat of the dot.com bubble with social media. Recently, the professional and resume social network LinkedIn launched an IPO and reached a market valuation of $9.1 billion, many times its actual revenue.
Twitter, which barely has any revenue, just raised new financing based on a valuation for the company of $7 billion. By the beginning of next year, experts believe Facebook might be valued at $100 billion.
While Facebook's revenue has increased substantially, most of the social networks receiving funding don't really have a business model to support those numbers. But even if they don't, Google needs to be in on the action, as witnessed by this week's purchase of Motorola's mobile phone business.
If you're on any of these networks, you may have noticed that we're not paying for any of them. We're using them, but they don't cost us anything except time and distraction. One assumption is that the social companies will be able to grow based on advertising and by selling our data. After all, that's how radio and television became so successful. And while that certainly works to an extent, it's not clear just how much interruption and advertising we social media users will stand for.
It will be interesting to watch how megalith Google puts its creative weight into Google+. The bigger question is whether any of these networks will actually be as profitable in business as they are to their investors. I'm guessing that not too many people would click "Like" for that.