Jeremy Liew, a partner with the venture capital firm Lightspeed Venture Partners, spends a lot of time thinking about social networks and how they differ from social media.
The value of a social networking site like Facebook comes in part from its ability to serve as a distribution channel for businesses looking to acquire new customers, says Liew, a former general manager of Netscape and senior VP of strategy at AOL.
For those businesses, "living inside a social network is a great place to be," he says.
Those who want to sell online advertising to those business also need to be in the network, which is why Microsoft extended its exclusive ad deal with Facebook even though it had to invest at a valuation of $15 billion.
"There was strategic value for Microsoft, as well as intrinsic value" as part of the deal, says Liew, who blogs about all things social at lsvp.wordpress.com. Silicon Valley-based LightSpeed manages $1.3 billion and is currently investing a $475 million fund.
Liew's comments go to the heart of a fierce debate taking place among
investors about whether the money to be made in digital media will come
from content or distribution. Read more here.
Last week, Liew chaired a panel at the NewTeeVee conference in San Francisco where executives of video advertising startups talked about the challenges facing their young businesses. Read our story here.
While the content of a social networking site like Facebook has a lot of "personal stuff," and a "read-to-write ratio of one-to-one," according to Liew, "social media has a higher read-to-write ratio."
"You have lots of people who read, but don't write," he says.
Liew is an investor in Flixster, a social network organized around film fans, a service that he felt had the potential to grow virally because movies are so popular.
While the challenge at Flixster so far has been managing growth, "now they need to find a way to make money," Liew says. The company, which has around 10 million monthly users, has sold some ads to movie studios "at high CPMs," and now "needs to build out a sales organization."
Click on the video to see Liew's full interview with Vator.tv's Bambi Francisco. You can see Jeremy's Vator.tv pitch here.
Jeremy's distinction and explanation of Social Networking versus Social Media is enlightening. I must admit that I haven't thought about it the way he articulated it even though I intuitively understood the difference.
Considering his extensive knowledge of the space and the fact that he's been blogging about it, I was hoping to hear few words about Social Network Analysis (SNA) - not to be confused with social networking. Specifically, I was wondering if he run across any companies who are trying to adopt SNA to social networking.