An oversight on ‘Social Networks over-valued?’

by Alexander Blom on March 6, 2009

in Thoughts, tips & advice

Just a quick update, I forgot to make a mention on my last blog about our reliance on advertisements – so I will keep this entry quick!

The social network QQ from China earned $523 million in revenues for 07-08, four times that of Facebook. Interestingly, only 13% of their revenue came from advertising – most of it came from Games and Mobile Services.

Perhaps this is where our Social Networks should be looking? It is funny how alot of Western businesses place advertising as their primary source of income where the rest of the world choose to innovate.

  • Hi Will,

    From various sources (TechCrunch, SNWatch, QQ's website) they claim around 200 million users - more than Facebook I believe. As far as maintenance costs I am unsure, I'd expect similar to Facebook. I just thought it was an interesting general comparison to make.

    You can find the TechCrunch article here:
    http://www.techcrunch.com/2009/02/24/chinas-soc...
  • Yes, that's the problem with Facebook's strategy. If they focused on selling services like that (games, iphone apps, etc.) to users, they might already be out of the red.

    But about QQ, there are some things I'd like to know. How many users does it have compared to Facebook. How much does it cost to maintain a year. A revenue comparison stat doesn't mean very much unless those two pieces of information are known.
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