FaceBook vs Vkontakte: who made a greater success in monetization?

Next year it will be 15 years since the launch of the first social network. First virtual community that welcomed all comers appeared in 1995. It was the American network Classmates.com.

Social networks were surprisingly comfortable way to communicate and immediately won enormous popularity. They allowed people not only to exchange messages with each other, regardless of distance and borders, but also provided an opportunity to acquaint others with the results of their work, to seek and find like-minded people.

The second important factor attracting Internet users to join the social network is their accessibility. Participation in these projects is free, and it does not require anything from a person. The level of activity is decided personally.

During the first 10 years of social networks existence the number of registered people has increased from several thousand to hundreds of millions. The boom in the creation of similar projects started 5 years ago, in 2004 - 2005. It was the time when today’s giants "MySpase", "Facebook", "Linkedln" came to the world stage. In RuNet the development of social networks started a bit later, in 2006 when such social networks as "Odnoklassniki", "Vkontakte" and "LJ" came into being.

In 2009, the leaders among social networks in the number of visitors and registered users were found Russian ‘Vkontakte’ and English" Facebook ". They brought their owners the biggest amount of money.

On June 20, 2009 "Facebook" has announced that they have launched a Russian version of the site for Russian users. Will the most popular social network in English Internet be able to move its clone "Vkontakte"? To answer this question we must figure out how each of the sites is monetized.

Initially, social networks existed at the expense of the programmers - enthusiasts involved in their maintenance. Fund-raising was carried out voluntary by users. During the first ten years of social networks existence they have developed a mechanism to generate revenues from these projects. There are two main ways to make money from social networks. The first is advertising. And the second is the provision of services to users.

It should be noted that the popularity of "Vkontakte" and "Facebook" is partly due to a very modest financial appetites of their creators. Owners of other social networks that forced to pay users for each virtual sigh and a smile, have already begun to lose their customers who moved to a place where they can enjoy more free services. This tendency is more evident in the Russian Internet since the income of most of its users is lower than the income of Europeans and Americans.

The basic package of services in "Vkontakte" and "Facebook" is free and almost the same. Both resources provide its users a virtual space called account where they can place any personal data interests, videos, music tracks and make them available to all users or to a specific group. The second basic service offered for by social networks for free is an opportunity to search for familiar people. In addition, users can exchange messages, comment on each other's records, leave messages available to all visitors of a special page, the so-called wall. The third item that is the same in both the social networks is an opportunity to create groups of interest.

The most common mechanisms to generate profit are based on collecting money directly from the users. This originates from the Donations, money provided voluntary. Having paid a small fee a social network user gets an opportunity to send his or her friend an image of any object as a symbolic gift. The cost of such surprises may vary from one to fifty dollars. Difference between "Vkontakte" and "Facebook" is only in the pictures themselves.

In addition to the gifts both sites offer a global system of voting, in which each network user may vote for another. But to start voting one should buy a vote first. A purchase of votes is performed via the electronic payment system, sms-billing or through bank wires. While voting, one can improve a rating of your friend or group member.

Beside the virtual goods customers are offered various applications: games, business programs, useful software. Some applications are available for free. Usually they are games. However, during the game the users are offered to buy some goods, products, accessories and currency necessary to play. All those items can be acquired for votes.

Also both sites offer the so-called affiliate programs, special applications, recommending the users that enter some page to please the page owner with a cup of coffee or a cocktail. Usually, the cost of this "beverage" is something like one dollar. The money is shared by the owner of the account, application seller and the site itself.

And, finally, the administration of the two sites takes money from those who post on the site useful software - translators, organizers, online calendars, reminders and entertainment programs, for example, games, tests.

Both "Vkontakte," and "Facebook", in fact, are the ideal sites to place a targeted advertising. Both sites offer advertisers two ways of information placing: banner and context ads. Contextual advertising has the form of ads and posted on the pages of users that meet the requirements of the announcer. The second type of advertising is banner ads. Banners are usually placed on the pages of chapters and communities following the same way – to get a target audience. In other words advertising on both resources can only see the people it was intended for.

Both sites offer two options to payment for advertising: for clicks on or for a number of hits. Contextual advertising can be placed on pages of groups belonging to the target audience, the pages that describe events that occur, through applications, which can be created by any user who uses a special program provided on the site. And finally they can generate money from ordinary announcements. The difference between "Vkontakte," and "Facebook" in terms of context advertising is only that "Facebook" has a news line and “Vkontakte” offers to learn about your friends on a special news page.

Another type of advertising activity practiced at both sites groups sponsorship. Usually they create a group that joins people by their common interest that aims at attracting of the attention of the potential clients and also at supporting a positive image of the goods advertised. , in such cases, interest groups, created to bring the goods or services the attention of potential customers, as well as, in order to maintain a positive image of the advertised product.

"Vkontakte" is two years younger than "Facebook" and is considered to be its clone. However, a lawsuit that Mark Zuckerberg, a founder of western network was planning to bring against Russian social network was not initiated.

The fact is that besides the general principles of work and development of the network those websites have very little things in common. "Facebook" was originally offered as a network to join people for serious communication, networking, and "Vkontakte" positioned itself as an entertainment resource.

Despite the fact that approximately half a year past from day that a russification of "Facebook" was declared, the project has not been translated into Russian in full yet. For example, the rules still remain in English. The same can be said of the most texts on the main pages of the sections. The only fully translated section is "advertising". All this leads to the fact that most Russian-speaking audience does not want to register in "Facebook". Thus, advertisements in Russian, given in the column on the left side of the screen will hardly meet the expectations of the network founders. By the way, one more drawback of the western network is that they place ads on the pages of the user without asking the users whether they want that advertisement or not.

According to Russian businessmen that have placed advertisements and banners on both resources, "Vkontakte" allows them to find their target audience more correctly and brings a greater number of clicks and views. In other words ads in "Vkontakte" cover the expenses quicker and better that in “Facebook”. Russian users are not full of social networks yet and are more active compared to the western users. They are more willingly join the groups, more often express their opinion and show more curiosity and a favorable attitude to the advertisers. The reason for such a good attitude can be in absence of the ads in the accounts of users themselves. The differences between "Vkontakte" and "Facebook" are seemingly insignificant. however they lead to significant results.

Despite the large number of users, social networking doesn’t generate fantastic profits. Many of them are hardly able to cover the expenses. "Facebook" has covered all its expenses however not so long ago. Scandals with the hack of the accounts also made a negative impact on the development of “Facebook”.

Of course, we cannot compare the turnovers of the 200-million "Facebook" and the 80-million "Vkontakte". The figures are quite different. However within just three years of its existence, Russian company has mastered all kinds of monetization of social networks. The site actively develops and grows, whereas the western prototype is developing in a slower pace. Ultimately, a 2-year difference was favorable for the Russian social network since it allowed it to escape some errors in the process of its creation and made a domestic project initially faster that better meets the needs of users.

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