VC $$$'s Tuning to Specialized Social Network Startups

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Social Networking Sites Move Towards Specialization
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With a rash of relatively general social networking startups last year kickstarted by the likes of Friendster in 2003 VC $$$'s are tuned to more specialized services and structures in 2005. Dating and Business networks being a prime focus:

Opportunities remain, though only a few companies in the space are profitable as of yet. David Sze, general partner with Greylock, sees dating and business networking as the two areas where consumers are willing to pay, but he said that a lot of companies haven't figured out yet how to make money.

In both those markets, users are more likely to pay subscription fees, an extra revenue stream on top of the traditional advertising revenue that social networking sites usually focus on. VCs' belief in these markets in particular can be seen through the example of one round - the $110 million blockbuster round for e-dating firm eHarmony.com Inc., which raised the money from Sequoia Capital, Technology Crossover Ventures and Fayez Sarofim & Co.