March 20 – Dow Jones Web Ventures put together a group of professionals in the online investment industry to study the future of social networking. The meeting recently concluded 
that the venture capital field is growing tired – with good reason – of the social networking sites showing up ad infinitum. Barry Schuler, a speaker on one of the featured panels, posited an extreme position on the issue, stating, “If I see another business plan for a social network, I might blow my brains out.” Put simply, the market is feeling saturation.
Aside from a previous chritic.com post highlighting many of the important criticisms of copycat social networking sites, niche website business models are starting to realize that funding will likely dry up in the near future. Social networking began as something else to do on the Internet—a dashboard for web surfers desiring social interaction. When people become members of a network for every conceivable interest, each commitment becomes more overwhelming and interest declines.
Additionally, it is important to recognize that the social network fatigue is not coming just from users. Sophisticated investors are seeing the inevitable future of social website traffic.
The most surprising issue with the venture capital fatigue is their conclusion that they don’t want any more business model proposals, rather than demanding different proposals. With the FCC’s 700-megahertz spectrum auction closing, and next-generation wireless on the horizon, for example, where are the plans to transcribe the network business model on the mobile cellular devices? Where are plans that look to connect similar users of mobile devices? Hopefully, the saturation of social networking business plans will not turn VC’s away from derivative concepts that may serve vital to the market and take advantage of growing future technologies.
Posted by thechritic 
