Telcos at the heart of business social networks?


In an interesting piece by Mural Ventures, Matt Howard claims that Telco’s will be creating value, or new revenue streams off the back of business advertising to social networks. Matt’s view is that Telco’s are were pretty well placed because they held a strong position in directory businesses.  Matt says that Telco’s can learn from the success of Facebooks valuation to prove this model.

To my mind there are a few other things going on here. I personally still struggle with the value of Facebook. Sure I know MS bought a stake, but my personal view as that this was to give them the bargaining power to bridge the MS social network (xbox) with Facebook. Because of this, MS saw more value and hence overpaid (either deliberately or inadvertently).

To me, Telco’s should absolutely be moving their directory business to a 2.0 model. I think Matt and I would agree whole heartedly on that. I think we would agree that those, like Telecom NZ that have sold their directories are short sighted.

I think the advertising model, is misleading. This report shows that Facebooks advertising isn’t actually that successful. So what is their value. To me the real value that News Corp and MS and even the market are seeing in the social network empires is the directory.  The millions of end users that they have some tie too.

I think that advertising is just one potential monetisation strategy. I also think that Telco’s who are embracing SaaS, coupled with a directory system (which Tradespace is a good example of) have an unprecedented opportunity to drive real value. Imagine if they aggregated those SaaS services provided by their advertisers to their user community. Imagine if they created new forms of commerce in a very web 2.0 mashupable way,  linking needs together rather than classical advertising.

I’m not convinced the future for Telco’s in the business market is advertising. 


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