I won’t be the first to think it but Jason Calacanis is blinded by arrogance. He is an up and coming star in AOL with his sights on being CEO. The problem with this is that being a [good] CEO takes more than decisiveness; it takes critical thinking and not drinking your own cool-aide too often.

Jason blogged that, “The problem with social networks: they suck for advertisers.” He must not understand how advertising works at all because he thinks people participating in social networks would rather “hook up” than click on a link, comparing it to sites like Autoblog where people are in “consume auto information” mode. This is the equivalent of saying that freeway billboards will never work because people who are driving along are in “driving home” mode.

People participate in social networks because they want to interact and advertising via this medium is (for some companies) the best way to target the demographic they are trying to hit. Jeff, a commenter, retorts with “I think a smart system can be built to target the user based on their behavior and participation in the communities. How much more targeted can an advertiser get than a member of a community that has self identified as being interested in a topic and frequents the site often interacting around that topic?”

I totally agree. Social networks may not be for all advertisers but they do gather some pretty detailed information about their members (part gathered and part listed by the user) that they could pitch to arvertisers. Ok, so there’s the motive but will people click? will they buy?

I use LinkedIn because I want to keep up to date with my contacts and others in the industry. If someone was advertising something for my corporation or a job posting I would click it. MySpace caters to the music lover so why wouldn’t Sony, BMG, and other big name music houses buy advertising there? They could pitch different bands CDs to different users based on demographics (i.e. age, interests, etc.)

Jason says, “I’m glad I’m not in the social networking business.” Personally, I think he’s jealous he’s not in the social network business. As he touts the number of page views that Engadget gets, MySpace moves into the number 2 position (only to Yahoo!) far and away ahead of his sites. Of course had Jason thought of the social network idea himself he would be singing its praises. I guess that’s just business.

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