How do social networking sites make money?
Social networking sites seem to dominate the Web. How often do you find yourself updating your status on Facebook, sending out a tweet on Twitter or adding new images to your MySpace page? Many social networking sites allow users to create profiles for free. But have you ever wondered how these sites made enough money to support millions of users? One way social networking sites manage to make money is through investments from venture capitalists. These investors are essentially making a bet that the site they’re investing in will become popular and will eventually find a way to monetize that success. Getting in early can mean a huge payoff down the road. There are several examples of large corporations buying out Internet startup companies for millions — or even billions — of dollars. Between the dot-com bubble burst in 2000 and the economic recession that began in late 2007, venture capitalism was booming. It was fairly common for entrepreneurs to pool money and invest in promising
