Neighborhood America Predicts Businesses Will Look Beyond Social Networks

January 8, 2008 - While 2007 was a year of enormous strides in social media, the industry is beginning to realize that the dream of monetizing popular consumer destinations such as MySpace, Facebook and YouTube is not going to materialize. As the markets ponder 'what's next,' Neighborhood America, a leading provider of enterprise social networking solutions, issues four bold predictions on where the industry is heading, and how it will impact business in 2008:

Web 2.0 is on its way out. The next evolution of the Internet is not simply an extension of today, or a new version waiting to be tagged with a trivial 3.0 label. It will be a whole new way of doing business. Web 2.0 will be replaced by the Smart Web as businesses learn that squandering resources in an effort to superficially ‘befriend’ consumers just doesn't make good business sense. Instead there will be greater realization that smart businesses engage consumers through strategic communities that deliver smart results.

The advertising model will transition away from impressions to a more valuable, measurable, experience model. That loop - or the advertiser's goal to engage consumers in a way that creates an experience and promotes measurable action - will begin to close as marketers increasingly look for more effective ways to maximize budgets under greater scrutiny and accountability.

Industries will view enterprise social networks as a valued business asset. Greater adoption of the concept will become evident as organizations move beyond the 'cool factor' and realize that high value communities can drive results throughout virtually every aspect of their organization. There will be greater realization that the value of many can impact multiple disciplines throughout an organization. A community that may have initially developed from a marketing campaign, for example, will feed the business intelligence needed for product research and development, change management, customer retention and loyalty programs, and stronger partner networks.

The capital markets will be more demanding of all things "social." The market has become saturated with social networking companies, most of which deliver fun to consumers, but little in the way of successful business models. Venture capital and private equity funds will absorb the failures quickly. The capital markets will quickly begin to realize, if they haven't already, that valuations based on impressions are on the way out. Watch net native Software as a Service models emerge as the preferred delivery business model.

"For businesses, the evolution of the social web was a milestone - not the destination," said Kim Patrick Kobza, President and CEO of Neighborhood America. "While many continue to philosophize over when, if ever, businesses will begin to capitalize on social networks, many of our innovative customers have already achieved superior consumer engagement and revenue streams by adopting enterprise-appropriate strategies. We expect to see phenomenal growth in this area during 2008, as the business world increasingly recognizes that enterprise social networks, when used smartly, can be leveraged to deliver far more than social relationships."