Dallas Lawrence is Chair of the Social and Digital Media Practice at Levick Strategic Communications, the nation's top crisis communications firm. He blogs on emerging digital media trends and best practices for social media engagement on Bulletproof Blog. Connect with him on Twitter @dallaslawrence.

Social networks have truly come of age in the last year. No longer viewed as lonely outposts for youthful college slackers, the reach of these platforms has grown exponentially. Today, more than two-thirds of the world's Internet users visit the social networking sites that reel in billions of eyeballs every 24 hours.

Yet, despite the staggering growth of social networking, determining how to monetize social media platforms remains a tough code to crack for even the savviest of companies. As such, identifying new revenue models will be instrumental in kicking off the next cycle of the social networking phenomenon in 2010.

If Anyone Can Do It, Facebook Can

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Facebook, social networking's acknowledged leader, has surpassed every platform on the market today, corralling more than 350 million unique users globally. If any social network is poised to design a winning formula for successful revenue streams in 2010, it's Facebook. CEO Mark Zuckerberg has set an aggressive agenda for the company, publically stating that he expects social networks to become as essential as web browsers and operating systems, and he has set the lofty yet entirely realistic goal of 1 billion users worldwide.

In the less than five years since it expanded beyond scholastic audiences, Facebook has not only grabbed the lion's share of users, it has engaged them like no other platform on the Internet. The average Facebook user visits the site at least once a day and spends an astounding 55 minutes engaging friends and family - statistics that another Zucker (Jeff) would probably kill for over at NBC.

While translating such popularity into dollars and cents isn't easy - especially in an industry whose users have grown accustomed to getting something for nothing - Facebook could potentially provide a monetization template that would revolutionize social networking as we know it.

The Next Level of Advertising Revenue

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Advertising has traditionally provided the simplest means of generating revenue. PricewaterhouseCoopers reported in October that Internet advertising revenues totaled $10.9 billion for the first half of 2009. It's been estimated that Facebook alone took in $435 million of that total. But for a site with nearly half a billion users, a quarter of which spend more time within the network than watching television, these numbers represent just the beginning potential.

First, Facebook needs to admit to itself that it is in the business of selling ads. By better managing its advertising network, intelligently expanding its marketing options, and developing workable social ads that leverage the branding power of friends and connections, Facebook can begin to capture its rightful share of online ad revenues. The final piece is to increase awareness and understanding of Facebook ads among corporate decision makers.

For example, every executive in America today understands the value of purchasing Google ads - and that didn't happen by accident. Google understood that what caused it to dominate online search wasn't going to ultimately position the company as a global corporate powerhouse valued at nearly $200 billion. Google's aggressive marketing, communications, and lobbying shops have worked to ensure every ad buyer, political campaign, marketing executive, and public relations flack knows the value of the service and has direct and easy access to account executives who explain the much worshiped ROI Google ads provide.

Today, Facebook stands on the precipice Google inhabited just before it became a top money-maker. By taking a page from the Google playbook, and aggressively marketing and explaining its power to influence buying decisions, Facebook ads could become as essential to 21st Century marketing as the yellow pages were in the 20th Century.

E-Commerce Stop Sending Customers Away

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The launch of Facebook as a true e-commerce site holds immense potential as a business solution and could forever change the way we shop. Online purchases through the first three quarters of 2009 totaled $98.3 billion according to the Department of Commerce. For the majority of companies selling products online who are also engaged on Facebook, opening Facebook fully to direct e-commerce transactions will dramatically change how businesses advertise and how consumers buy goods online.

Consumers and companies would flock to a Facebook storefront for one simple reason: We do everything else there. Imagine an integrated, one-click solution whereby your friends see your recent purchases (because you were incentivized by the brand to share your information) in their feed and are able to simply point, click, and purchase the same item.

With a few adjustments, companies can make timely offers of birthday gifts for friends, travel arrangements for event items, or the latest music from favorite artists - and make the sale without forcing the user to leave Facebook or put in new login information.

Rather than driving their 350 million users away from the platform to close the deal with retailers and purchase the item on an external platform, Facebook could benefit financially by charging companies a percentage of sales, a fixed rate to have a storefront, or from increased advertising opportunities.

Premium Subscription Options

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Finally, whether users like it or not, Facebook will do itself a long term disservice if it does not consider premium subscription options. Users (whether they are corporations or teenagers) are amenable to paying for even the simplest features and functionality, as evidenced by the success of Facebook gifts.

Nothing good in life is free. It's a stark, mature reality that Facebook (and its users) need to face in 2010. By leveraging economies of scale, Facebook can churn a sizable profit without alienating users. Would you pay one dollar a month to share higher-resolution photos or upload higher-quality or longer videos? Last month, 2.5 billion photos were uploaded to Facebook. Even if only a quarter of the site's active users opted for premium options, this one change would generate more than $1 billion in annual revenues.

Improving advertising, developing an e-commerce platform, and adding subscription services will not only generate the revenue necessary to make the transition from highly adopted to highly profitable, it will open revenue streams as Google did before for the next generation of digital developments.

More business resources from Mashable:

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- Social Media Marketing: How Pepsi Got It Right
- 5 Ways Small Businesses Can Avoid Social Media Panic
- HOW TO: Take Advantage of Social Media in Your E-mail Marketing
- HOW TO: Implement a Social Media Business Strategy
- 18 Online Productivity Tools for Your Business

Image courtesy of iStockphoto, peterspiro

Tags: advertising, business, e-commerce, facebook, MARKETING, monetization, monetizing, money, social media, social networks

Yahoo's social bookmarking service Delicious launched a new home page this morning, combining recent tagging activity and cross-referenced links on Twitter to deliver what it calls the hottest news from around the web in real time. While the exact formula behind the front page remains unclear, its contents are clearly changing minute by minute.

It is something the site probably should have done a while ago and if done correctly could make other services, like Digg, look all the more behind the times. The move could also help Delicious survive the coming Yahoo Search purge at the hands of Bing.

Sponsor

The new front page is focused on political and tech news instead of the most popular topic on Delicious, web design. There also appears to be some smart filtering of the Twitter messages being counted, as the numbers are far lower than other services' counts and seem to exclude the spammy retweeting bots that pump up big news sources in other retweet counting services.

We've long believed that Delicious is one of the most under-appreciated social media services remaining from the early days of the social web. This new version could help win back some of the early love, but it does represent a radical shift away from the original vision most people have of the service as a tool for bookmarking things you want to return to later. The founder of Delicious, Joshua Schacter, said on Twitter last night "i hate the delicious twitter integration (sharing != saving) but i like the new search a great deal."

The pressure on Digg to find a way to speed up the pace with which it surfaces news on its front page has got to be growing. Note that Delicious hasn't decided to put its links inside a toolbar as Digg, StumbleUpon and many other services have. That's nice.

For a closer look at Delicious and the real-time web, see our recent posts Five Great Delicious Hacks, in Five Minutes, for Delicious's 5th Birthday and our Introduction to the Real-Time Web.

The first time I heard the term "thought leader", I thought, "Now there's a cool concept: someone who is able to assert influence and change outcomes through the sheer force and power of her ideas."

The last time I heard the term "thought leader", I thought, "There ought to be a little anniversary present to mark the three millionth time you hear a buzzword."

That may be my biggest complaint about buzzwords and jargon: not that they're often impenetrable to outsiders, and not that they often mask a lack of clarity on the speaker's part, but because they take perfectly good phrases - phrases with power, phrases with innovation and meaning - and suck the life out of them through overuse.

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Got a social media buzzword or catch phrase you'd like to lay to rest... or maybe reclaim and restore to life? (Say, "social media", for instance?)

Happy Birthday!

By the way, this marks the first anniversary of Noise to Signal on Read Write Web. I've made a birthday cake but, uh, since you're not here, well, I'll just have to eat it myself. For the past year, I've been whipping up weekly cartoons, Richard has been gamely publishing them and you've been so kind as to read them.

Thanks for that. And thanks for every comment, Digg, tweet, stumble and Delicious-ifying. I hope that you'll keep reading them in the year to come... and that you'll enjoy them as much as I enjoy drawing them.

Ed: Thanks Rob, I've thoroughly enjoyed the weekly funnies! It's given RWW a sense of humor that sometimes we're accused of not having (being serious types) ;-) Here's to many more classic Rob Cottingham cartoons over the next year.

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Never underestimate the power of first-mover advantage, especially when being one of the first movers gets you bought by Google. Back in August, 1999, Pyra Labs launched Blogger. LiveJournal had launched six months before and Open Diary in October of the previous year. But it was Pyra Labs which was acquired by Google in February, 2003, and the rest was history. Now, nearly ten years later, Blogger is still the dominant hosted blogging platform. In May, 52 million individual people from the U.S. visited a Blogger blog, almost twice as many as the 28 million who visited a blog hosted by Wordpress.com (comScore). Six Apart properties, including Typepad.com, attracted 14 million.

Millions of bloggers still use Blogger because it is easy. However, Wordpress.com is making steady gains and growing its aggregate audience in the U.S. at more than twice the annual rate of Blogger (40 percent versus 14 percent). These numbers don't count all the blogs that host Wordpress on their own servers, such as Techcrunch.

The vast majority of Blogger traffic comes from outside the United States, where its annual growth rate is 38 percent compared to Wordpress.com's 59 percent. On a worldwide basis, Blogger blogs have a readership of 267 million people a month, compared to 143 million a month for Wordpress (comScore, April, 2008). The biggest countries are, in order:

1. U.S.
2. Brazil
3. Turkey
4. Spain
5. Canada
6. U.K.

From a business standpoint, Blogger is good for Google because it creates millions of sites which can show AdSesne ads. It creates more inventory for Google. Only recently has Google bothered to start showing ads to the users of Blogger itself every time they publish a post.

Can Blogger keep its lead indefinitely, or will Wordpress eventually catch up? Or will something else entirely overtake both of them?

Today, two of the people behind the original Blogger, Evan Williams and Biz Stone, have another little service that is capturing people's attention. It is called Twitter, you may have heard about it. In May, Twitter.com had 17.6 million unique U.S. visitors to its Website alone, making it bigger already than Six Apart.

Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.

How about this recipe? Take a basic FDIC-insured savings account, spice it up with automated electronic transfers and email communications, mix in gift/debit cards, wrap the whole thing up in a social network, and top it with a memorable name. What do you have? SmartyPig, the most innovative financial service we've seen since Prosper launched two years ago.

The site is in the final week of private beta. To register, you still need an invitation code. The company asked me not to publish it, but it's OK if I distribute by request via email. Send a note to info@netbanker with "SmartyPig" in the subject line. Or simply wait until after this weekend when the site goes into public beta.

How it works:

1. Users create savings accounts at the site. Deposits are held at West Bank, a Des Moines, IA- based financial institution with $1.3 billion in assets. Funding is through ACH (electronic) transfers from outside bank accounts. SmartyPig currently pays a high, 4.3% APY on deposits.

2. After the account is established, users are encouraged to create savings goals funded through automatic monthly ACH transfers until the goal is met.

3. Now here is where SmartyPig diverges from a typical bank account. The savings goals can be made public or kept private. Public goals can be funded in part, or entirely, by outside contributors. Think of grandma and grandpa contributing birthday money to help junior buy a new bike. Contributions are funded through credit card charges with a maximum charge of $500 and a per transaction processing fee of $4.95. To make sure grandma's $50 doesn't go to a Mario game, the money cannot be withdrawn until the savings goal is met (or canceled by the primary account holder).

4. After goals have been met, the user can elect to take the funds out in the form of a MasterCard debit card or a gift card from a retail partner such as Amazon.com. Participating retailers add a up to 5% bonus to the savings goal so that $1000 saved for the plasma TV is worth $1,050 if redeemed via Amazon gift card. That's a great added incentive to use the service.

Gift Cards
SmartyPig also sells gift cards that can be redeemed towards new or existing savings goals. These cards, issued in denominations of $25 to $500, are meant to be given as gifts or employee incentives. They cannot be redeemed outside the SmartyPig system. Physical card are produced and delivered for a processing fee of $4.95 plus delivery fees of $5.95 or more. Or consumers can deliver a virtual card through email to eliminate the delivery charge (but the $4.95 processing fee remains the same).

Summary of Fees

• Public contributions: $4.95 flat processing fee for each contribution made by an outside contributor. Contributions can be from $25 to $500 and are funded via credit card.
• Gift cards: Gift cards incur a $4.95 processing fee and an optional $5.95 shipping fee. The shipping fee can be avoided if a virtual gift card is chosen which is fulfilled via email.

Analysis
Although, not everyone is going to want to go through the extra steps to save this way, we are impressed with SmartyPig and are awarding it our first OBR Best of the Web award for 2008 (see note 1). We like how it's part gift registry, part savings account, and potentially a big help in getting users in the habit of saving for larger goals. The look-and-feel is very Web 2.0 and should resonate with teens and twenty-somethings.

There are a few rough edges that need better explanation and/or minor redesign. For instance, there is no way to simply add funds to a savings account without first setting up an automatic funding plan. But the site isn't even officially launched yet, so these issues should be ironed out during the beta period.

The processing fee of $4.95 per transaction is a bit on the high side. One could argue that it's worth price of a triple mocha for the convenience and benefits of the savings account. But for smaller deposits of $50 to $100, it's a pretty high percentage of the overall deposit.

It would be nice if the company could lower the fee, perhaps by creating an ACH funding option. Another way to reduce costs is to lower the 4.3% APR. I'm not sure the savers attracted to this account really need that high of a rate. A lower interest rate combined with lower fees might make the service more palatable overall.

The company may have to tweak its business model going forward. But the real lesson here is that savings accounts can be made stickier with automation and incentives. Leave it to the Iowans to show us the way (note 3).

Screenshots

1. The main account screen: I set up a savings account for my son. Then set a savings goal of $300 for a new bike. SmartyPig requires that the savings goal be funded in equal monthly withdrawals from the linked checking. It would be helpful if you could opt out of the automated savings plan so that the savings goal could be funded manually.

2. Public goals: If you opted to make your savings goal public, anyone can find it by searching via email address under the "Friends' Goals" tab on the top (you can see this one by searching for jim@netbanker.com).

Users can publicize their goals with a widget (see inset, and link at bottom of screen above) or by sending email to friends.

After making a contribution, the following screen is displayed.

Note:

1. Online Banking Report (OBR) Best of the Web awards are given for products that "raise the bar" in online financial services, usually for pioneering a new feature. Recent winners are covered here. Five awards were been handed out in 2007: two for Wesabe, and one each for Jwaala, Buxfer and Obopay. In the past 10 years, 67 companies have won the award.

2. Full disclosure: I was born and raised in Iowa and my brother lives within a few miles of the SmartyPig world headquarters.

If Otter and Boon from Animal House had grown up to be dot-com guys in Silicon Valley, they would be James Hong and Jim Young, the founders of HotOrNot -- a dating Web site where users crassly rate people based on their looks. It's the Net equivalent of holding up judge's scoring cards as potential partners walk by in a bar.

Hong and Young started the site just because they thought it would be funny. They got the idea while drinking and talking about a girl they knew. And they just sold it for a reported $20 million to a fairly mysterious Canadian operation called Avid Life Media, which has a home page that goes nowhere.

I've known James for a number of years. I'd be hard-pressed to say that he works hard -- a fact that Hong would celebrate, not dispute. He mostly invests his money or time in projects out of some sort of bizarre personal need or because he wants to back a friend. A year or so ago, he showed me a project called SaveMyAss.com -- a Web site that automatically sends a wife or girlfriend flowers on pre-determined dates, such as a birthday or Valentine's Day. (Guys, you might want to check out the site considering it's now Feb. 12.)

On another occasion, James put money into his friend Dave Samuel's new company set up to sell electronic toilets.

Looking forward to seeing what James and Jim do with their HotOrNot money.

Read more of this story at Slashdot.