Are social media services reliable ?

Many social media services launch upon a genuine idea. Something most users will need, use, adopt.

They go for a mock-up and raise the required funds in order to complete the project and head for the go-live, after a mid-long beta period.  Due to the Web 2.0 and social media frenzy, most ventures and business angels are willing to take the risk, even though the business model is not entirely defined, going for a “We will find a way to make money from that”. Here lies the biggest issue, either for the start-up owners and their employees, for the investors and even more for the users.

Most of these services start on a freemium model. Means, you don’t have to pay anything to use them. Some of them will rely on advertizing to get some revenue while others will try a true way to monetize the service (selling a service, selling goods, subscription model).

The second half of start-ups will most probably get away with a great revenue model, provided they have a good product and know how to market it. The first half, on the other hand, has to face more issues.

We see start-ups going dead everyday. Latest of them, being tr.im, which is shutting down by December 31st. 2009. Since Twitter has promoted Bit.ly as the prefered URL shortener, Nambu could scarcely build a user base big enough to justify the time and effort it put in a service it could not monetize. Yes, the reality behind it is this.  The service is genuine, useful, you’d adopt it, but you’d never pay for it, and you’d certainly wouldn’t want to have more ads in your pages.

So how much trust can you put into these kind of services ? Could you just go adopting them, putting them in the center of your daily work and hope they find a way to get enough revenue to survive ? Some of them might get lucky and get bought by Google, Yahoo! or Microsoft, but most of them will not.

The odds get higher for services building their model around another free service.

Dozens of services have emerged around Twitter. Twitter is useful, twitter is great, twitter has millions of users, but Twitter doesn’t make money. What would happen to all these dozens of companies if suddenly, for an odd reason, Twitter was to shut down ? They’d just go R.I.P  with no other plan-B to support them ? Of you course, you’ll tell me Twitter cannot go down, there’s no way it does, it is so popular, but I’d say, so were Yahoo!, AOL or Second life only a few years ago, and see where all are headed, fighting for survival, mainly through partnerships or shutting down some of their services.

So are social media services reliable ? I would say, they are, but only for those who have a strong revenue model or that are supported by a company that has enough cash flow to allow them to survive. Any other service might be just hazardeous to use, at least, for centric business purposes.