Unable to Produce profits. Does It Matter to Us in the Learning and Training World?

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Application Points: Not too quick to love the technology of Web 2.0? Let’s ask why they are not making profits. Are we buying into a bubble? So what? Look into providers for training and learning niche of Web 2.0.


Robert Jacques of vnunet.com reported a study by In-Stat forecasts reviewing the performance of social networking companies over the past 13 years.

According to Jacques:

In-Stat said that US social networking firms have not delivered predicted revenues despite operating for more than 13 years.


“The analyst firm blames this shortfall on a failure to find and exploit different models that capitalise on the data such sites collect.”

“Development of niche social networking sites is an essential piece of the monetisation puzzle,” said In-Stat analyst Jill Meyers.

“The more specific a social networking site is to a select group of users, the more targeted the advertising can become, the more loyal the membership will be because it caters to specific interests, and the more opportunities the site will have to be profitable.”

Why is this information important to us in the training and learning profession?

The success or failure of adoption could mean two things:

  1. The value provided to the end users. If users are not adopting the software, people may not find it useful.

  2. The stage the business providing the software is in. Are they in the very early stage that their focus is on raising capital to either cash-out their shares or invest for the long term?

My impression is that the early adoption of social networking in businesses reflects the poor financial performance of social networking as a whole. The practitioners are just discovering, experimenting, and many times guessing about the technology that can produce results. Although, there are companies who unquestionably embrace social networking, it is hard to know the contributions of the software.


Ray Jimenez, PhD



“Helping Learners Learn Their Way” “Helping Learners Apply Learning”

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