Social Networking - The truth behind

There is a lot of hullabaloo surrounding the social networking sites like Orkut and Facebook. This interest in them has of course sent the stock prices of these companies soaring North but how much is it really justified.

Let's look at the scenario: these sites were originally developed with the idea of bringing together people, either from the same society to share their thoughts, more specifically, people who were the part of an association or an education or a research group. It was conceived as a platform to give people an easy access to each other and their thoughts.

Over time, these sites left these puritan purposes behind them and instead starting looking at what the registrants to their web sites can do to their stock prices, and hence started the great social networking revolution.

What is the purpose behind all this? Why are the big players like Google, Microsoft and Yahoo madly running to get a slice of these social networking sites? Here are the simplest reasons:

Google, Yahoo and now Microsoft earn a large quantum of their revenue through their search engine and ultimately the online advertising. To provide users with the appropriate advertising, these search engines need to know the profile of their users. When I say profile, I mean everything from your gender, to your age, to your marital status, to the kind of friends you have, to your phone service provider to the music you like to everything else....sighhhhhh.
Once they get such a profile, the advertisements better target the users and hence are more effective. These companies are, thus, on a look out for their users demographic profile to be able to work up their revenues.

Now rather than convincing their users to register, and thus in turn provide interesting demographic data, these companies thought why not piggyback on one of the most viral fads going around: a social network site and thus came the Orkut revolution and it is for the same reason that Microsoft paid so much to acquire Facebook.

So while we thought that we are just enjoying these sites for free, we are actually providing ALL the data in the world to the very companies, that would in turn flood us with the advertising. So actually that is a symbiotic relationship.

So enjoy the social networking!