Don Dodge has a good post on estimating ad revenues (http://dondodge.typepad.com/the_next_big_thing/2009/07/page-views-required-to-generate-1m-in-ad-revenue.html). This is non-trivial and I have to say there is very little investor appetite for a new broad-based social network. Why will this be better / different than Facebook?
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Unless your network appeals to a very strong niche market that might pay top dollar for access to your members' attention you'll be getting $5 per 1,000 impressions of Google Adsense, like everyone else. If your network is the #1 hub for, say WPF developers, then you might be able to charge $900/month for job postings. But if your site is just general interest then you won't get much in the way of ad revenue until you have a huge number of active members. And with the networks that already exist, it's tough going unless you have a killer approach. Litmus test: if your network was just a facebook app, would your business idea still work? At some point you could get some bigger sponsors. Until then, take a look at shinyads.com Remember, people generally go to social networking sites to network and socialize, not to shop. Facebook ads have click rates often < 1 click per 10,000 impressions. Google AdSense is more in the ballpark of 1 click per 200 impressions.
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No, no and thice No! - social media networks and "selling" advertising is not what modern social networks are about. Social networks exist to demographically profile, categorise and segment populations. Brands do not want to sell you stuff on a social network site - they want to find out about you, where you go, what you buy, what you "like" and they pay for this intelligence. Your not going to get rich selling ad space on your social networking site. You are going to get rich if you can profile people between the ages of 13-25 by country, region, town, school, birthday, star sign, foot size, team, band and colour of Dad's car! now you can sell that! This I appreciate is negative in terms of encouraging a fellow entrepreneur to walk the walk and I don't want to do that - BUT what's your USP to face-book, linked-in, myspace, beebo and all the others out there - you have to have secret source - What's yours? Good Luck
