It's all about feeding hungers.

During yesterday's NPR program On Point with Tom Ashbrook: Are We Facing A New Tech Bubble?, Peter Thiel--PayPal co-founder, hedge fund manager, VC, and early investor and board member of Facebook--hinted at the business strategy of most social sites like Facebook, LinkedIn, Twitter, and Google +:

"I would submit that [Facebook] is much better than passive forms of entertainment like watching some moronic TV show or something like that. So I think if you think of it as substituting for television, it represents a big improvement on many levels."

I'm not sure what those levels of improvement are, since much of it is simply a different form of mental diversion. But I did follow his drift about being a substitute for TV: Social sites are going to grab people's attention and engage them with more desirable, self-reflective and reaffirming forms of news and entertainment, an interactive show where they can directly influence the plot, content and supporting characters.

That's step one of the strategy: Feed consumers' hungers. And it's working well: Facebook has more than 500 million active users. Step two is to feed marketers' hungers and grab an increasing portion of the more than $450 billion spent annually on advertising worldwide (Note: Emarketer estimates that Facebook will make $4 billion in ad revenues in 2011).

So here's how it plays out (on paper):

  1. Facebook feeds consumers' hungers;
  2. Facebook feeds marketers' hungers;
  3. Marketers feed Facebook's hungers;
  4. Facebook feeds investors' hungers; and finally . . .
    . . . the one unknown; the one hunger this particular ecosystem revolves around;
  5. Consumers feed marketers' hungers.

And will they? They will if marketers feed consumers' hungers with novel and valuable products and services.

Do you see? It's all connected, an ever-expanding, pulsating circle of relationship. And it's all driven by feeding other people's hungers.

Posted July 13, 2011
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Joint Pain Relief

Facebook is the topper social networking site. Its usage is increasing day by day. I am satisfied with your blog. We can say that, Facebook feeds consumers' hungers & also Facebook feeds marketers' hungers. Thanks for sharing this info.

Posted by: Joint Pain Relief | July 15, 2011 at 06:25 AM

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