Interesting recent article in BusinessWeek on how users are spending less time on social networks (despite a still strong 11.5% growth rate) and are getting frustrated with advertising.  All of this while more and more companies are spending more and more money on ads.

It will be interesting to watch the next breed of social networking websites that aren’t over-funded and over-valued do a better job at monetization then their gargantuan brothers in Palo Alto.  IMO, the recipe for monetizing a social networking website can’t simply be ads or another innovative way of reaching prospects with more clutter.  No, the new breed of social networking websites need to focus on offering truly valuable features/tools/capabilities, integrating commerce with community, and providing a higher level of user experience.   If you’re building community so that you can eventually pillage the community via ads, pause for a moment.  Is there another way of monetizing your site without undermining it?  You just might be two or three thoughts away from a breakthrough… so keep thinking!

-RB