We’ve been doing a bit of reading on e-business models for LBS and social networks, and the following is presenting a couple of interesting findings.

Bharat Rao and Louis Minakakis stated in Evolution of Mobile Location-based Services (2003) that there has not been a ongoing effort in developing sustainable e-business models for LBS and social networks, that sufficiently enhance and address the customer experience while being profitable.

Robert Young is talking along the same lines in his blog-entry Of Social Nets & Business Models, where he points out that social networks should realize that they can benefit from individually or narrow segmented targeted ads e.g. using micro-celebrities (people within the network that are well-known to that specific micro-community) instead of the “old fashioned” banner-commercials, giving the user a sense of “ad relevance”.

Another finding is, that while user location can play a key role in determining their individual information, product and service needs, user location is also a valuable information to the service provider (SP). On one side, the SP can use user location to offer customized offers and ads. On the other side, the SP can combine user location, both historic and current, to negotiate specialized deals with third parties. Deals that could be tailord to the individual user.

This points in the direction, that a e-business model for social networks and LBS’ should consider taking advantage (in a non offensive way, of course) of the network knowledge - this being both demographical, behavioural and positional knowledge of its users.