> 1. They cannot be monetized via anything but ads. Sure a few people will pay for access to a social network. But the majority will not pay $0.01 because the f

> 1. They cannot be monetized via anything but ads. Sure a few people will pay for access to a social network. But the majority will not pay $0.01 because the friction of the transaction will prevent them. Moreover, an SN operator can make a lot more money from ads than from subscriptions, at least until proven otherwise. As a result any useful value that an SN provides will quickly be overtaken by more and more intrusive ads. I don't know about this. It may well be that only being ad driven can monetize them to $billion+ valuations. But I don't know if it is for sure that you can't have a more modest, but still very respectable business worth in the hundreds of millions of dollars by monetizing in other ways. It should also be clear that social media's monetization strategy isn't just about ads, it's about data farming to serve highly targeted ads. They're not just selling out full page ad spreads and selling classifieds like in a newspaper. Those would be perfectly fine monetization plans that just focus on self-reported areas of interest and some very basic geolocation. There is some incentive to drive engagement to get eyeballs but it's not nearly as strong because they just need you to log in and hang out. They don't need you to interact constantly to collect data on your emotional state and receptivity.