Today some news on consumer-driven niche social networking sites like Ning and Quentin's Friends. In my previous posting on the value of social networks I focused on the value of these (decentralized) niche social networks relative to MySpace and Craigslist due to their focus, context and content. Especially, Ning is important (platform) player to be watched with already more than 30.000 niche social networks. Quentin's Friends is a not a service on the Ning platform but it might shed some light on the economics of these initiatives over time.
Below a quote from the Wall Street Journal.
"Over at Quentin's Friends, Mr. English decided on a more unusual and risky approach for his business -- charging a membership fee, something few social-networking sites do. The 40-year-old U.K. native says the decision wasn't easy. But as his hobby gobbled up more and more of his spare time, he grew increasingly frustrated that he wasn't getting paid for the extra work.
Mr. English says he tried selling ads on the site, but people rarely clicked on them. He charged admission fees to the occasional parties he threw for members, but not enough people came to cover his costs. So he decided to institute membership dues of $4.50 a month or $12 a quarter.
It was a gamble, since Internet users often balk at paying even modest fees for a service they can get at no charge elsewhere, like on Craig's List. So Mr. English braced himself for membership to shrivel. "I had people saying I wouldn't get 5%" of members to pay, he says. But about a quarter of the members stuck around, he says, "which is pretty huge for the Internet.""