I came across an article entitled Social networking sites: The next big thing in politics. A certain number of questions arise when we think of different ways to make money out of a social media about politics.

Lets suppose a first mover comes up with the concept of a social media for exchanging ideas about political issues. Lets also suppose that some politics enthusiasts love the service so much that they are willing to pay for a subscription in exchange of being part of the network. The law of supply and demand stipulates that it will not take long before another website (the imitator) pops up with a very similar service minus the subscription fee. Given the probability that the free service will attract users that were not enthusiastic enough to pay for the first mover’s service, the latter will sooner or later be forced to give a free service. If the imitator has built a network of a critical size between the time when it entered the market and when the first mover decided to offer its service for free, then both competitors will coexist.

Now, both competitors will face the problem of generating a revenue capable of supporting their operations plus an acceptable profit margin. Lets suppose that none will be able to receive public funding in order to support their operation costs. In this case, advertising will be the only source of revenue left to the competitors. Is that a real business model?