Don't Buy Latest Dot-Com Hype, Mag Warns

Economist finds holes in social net sites like Facebook, MySpace
By Zach Samalin,  Newser Staff
Posted Oct 18, 2007 3:15 PM CDT
Chairman and CEO of News Corporation, Rupert Murdoch, right, and Chris DeWolfe, left, Chief Executive Officer and Co-founder, MySpace answers questions during a talk at Web 2.0 conference in San Francisco,...   (Associated Press)
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(Newser) – While Facebook and other online social networks are growing like digital weeds in Silicon Valley, their popularity may be more a product of hyperbole than actual developmental potential, the Economist argues. But major internet speculators Google, Yahoo, and Microsoft don't seem to care, as each bids billions to buy Facebook, whose 2007 revenue may be only $100 million.

Though some tout Facebook as the new Google, the idea of the "social graph" championed by founder Mark Zuckerberg is no news in computer science. And it misses a major point: Google works to match advertisers with potential customers based on particular search terms; Facebook has only "large crowds who are communicating without expressing specific interests," says one online advertiser.