From an op-ed in the Washington Post…
A visit from the pope may attract a large audience, but it's not a great place to make money. Likewise, social networks can successfully bring people together, but don't expect them to turn a profit.
Almost 15 years later and as one of the Web's largest social networks, Tripod generates the same advertising revenue in a year that Google does in an afternoon. The bottom line is that advertising does not work on social networks because social networks are not media businesses.
Instead of expecting profits that won't materialize, the entrepreneurial community should instead operate social networks as not-for-profit organizations. Wikipedia has grown phenomenally with a not-for-profit business model, and while Wikipedia has its problems, its fate is in the collective hands of its users rather than in the hands of media companies or the stock market. Facebook and Twitter should enjoy the same comfort.
This is a very important service, and it is currently done in a number of ways, with varying degrees of accuracy and trust. At the high end are government-issued forms of verification like passports and state driver's licenses. At the low end are usernames and passwords. In between are mobile phones and credit cards.
Now everyone knows you're a dog
We're starting with well-known accounts that have had problems with impersonation or identity confusion. (For example, well-known artists, athletes, actors, public officials, and public agencies). We may verify more accounts in the future, but because of the cost and time required, we're only testing this feature with a small set of folks for the time being. As the test progresses we may be able to expand this test to more accounts over the next several months.
Take it to the bank
The business opportunity of providing identity services will not be missed. This is the monetization path for social networks. They are nascent identity banks. It is only a matter of time before the various pieces come together and the opportunity is realized.