With all the hoopla about how social netorks are the ad platforms of the future, It was interesting to read that China-based social network QQ made $523 million in revenues last year, almost four times Facebook's 2007 revenue of $150 million, according to +8*.
And while Facebook absorbs a $50 million loss, QQ reported an operating profit of $224 million in 2007. Two-thirds of QQ's revenue came from virtual goods and games; 21 percent came from mobile services. Only 13 percent of revenue, about $67 million, came from online ads. All this while the revenue models of MySpace and Facebook depend almost entirely on advertising, though both are angling to change that with open platforms and recent music distribution deals.
QQ has 300 million users, though the number is skewed because many users have multiple accounts. A company called Tencent dubbed QQ the largest social networking site, instant messaging and gaming platform in China, reports my good friends at PSFK.
George Parker
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