by Curlylocks

Parks Associates research confirm what many of us already know intuitively; few people would pay to use social networking sites.

This online survey of Internet users found 72% of social networking users would stop using a site if required to pay a $2 monthly fee.

Duh.

Monetizing their communities is the big problem facing real estate social networks like ActiveRain and especially Zolve — who, unlike ActiveRain, tried to launch with a (flawed) business model in place and may scared off any prospective members in doing so (see Zolve Tries to Kick ActiveRain While its Down).

There’s no doubt that social networks offer some attractive benefits to their members; mentoring, friendship, referrals, etc. But what exactly do these growing communities offer their hosts, besides tech support worries and greater bandwidth and hosting costs?

by Fort Photo

Social networks are very challenging to monetize, largely as the experience is easily duplicated elsewhere. Virtual communities are, by their nature, just like a flock of birds – flighty. Just ask the guys behind Friendster.

Paid services only work when the utility of the network to the users is crystal clear, like LinkedIn (I’m looking for a job or I’m looking for a new employee) and users are willing (desperate) to have access to each other.

Ultimately however, the only really viable business option for a meat and potatoes social network site (even in a niche like real estate) is to leverage the user base as a desirable demographic to advertisers. And to their credit – ActiveRain has begun to doing this, though right now it’s targeting only at a very superficial level (by region, specific pages and to groups).

by NymphoBrainiac

Being able to take the user base — users who have already self-identified themselves to their peers, and therefore reduced the amount of bogus identities — in aggregate and then slicing and dicing them into precise groups and offering them individually to select advertisers is the great promise behind social networking.

And this is the real genius behind Facebook’s new interest-based targeting platform (see Marketing Yourself with Facebook Flyers, also more from WSJ.com).

A real estate social network that’s first able to sustain its community’s critical mass through a compelling feature set, while being able to cleanly and effectively serve its individual users to prospective advertisers will truly become a valuable enterprise.

The only question is who’s going to get there first.

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Zolve, the real estate networking site dreamt up by Iraqi war vet and GeekEstate Blog contributor Brian Wilson, launched today, Techcrunch reports.

Honestly I haven’t spent much time on the site over the last few weeks, like Mike Price I found myself quickly annoyed with the talking head that kept coming back to the home page with every refresh, so I didn’t hang around long.

A cursory inspection reveals the basic idea of the site looks solid enough. The premise is to help connect real estate professionals and ancillary services (lenders, service providers) through a community and then help them manage their referrals to and from each other. The whole process is automated and Realtors earn “eBay-like rankings” on each of the transactions.

There’s no doubt that referrals are big business, and there is certainly room for the Internet to help streamline the whole process. I’m just not sure a social network is the way to do that.

Zolve faces two bigger battles on its launch day however. The first is social network fatigue – I’m not sure that the real estate community is ready for yet another destination to build a profile and start blogging. This is a big red ocean, to use a much over-used term.

That said, the timing of the launch could be timely; people may be looking for an alternative to popular blogging destination (who’s come up bloodied in its spat with Move.com). If I were Wilson, I wouldn’t be banking on that however. ActiveRain members are a tight-knit bunch and are fanatically loyal and I suspect that they won’t be dislodged easily.

The second is an even bigger hurdle to overcome. Cost.

Zolve charges $395 for the service, with an annual renewal of $995. The service currently has over 2000 members in their Beta (presumably pulled in from their Realtor Magazine Ad) but it’ll be interesting to see how many pony up real dollars to have access to the site once it’s live.

Unlike Techcrunch blogger Erick Schonfeld who writes “Brokers are so desperate to keep their commissions these days, they might just pony up the subscription fee without a second’s hesitation,” I think Realtors are going to be evaluating their marketing spends much more carefully these days. A thousand bones is a lot to throw at an unproven idea with questionable ROI.

In any case, Zolve’s launch means the real estate social networking playing field has just gotten even more crowded. ActiveRain now has some direct competition chomping at its heels so should be even more focused than ever building out a clear business model. As they’ve proved, a successful social networking site is very much about “catching lightning in a bottle” and these days there’s a lot more folks heading straight into that storm.

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PropertyQube, the formerly stealth real estate site, launched into Beta this week – and with the wrap finally lifted, it looks like the site is in fact a social network play similar to Trulia Voices, where people can ask real estate related questions of the community and (hopefully) find the help they are looking for.

As with many new sites there are a few kinks (mainly browser formatting issues in Mac OS X) for them to work out but overall the site seems functional enough. I added my profile and started to grow my ‘Trust Network’ (i.e. adding friends… ok, one friend) – this is tough going early on though, when a network is sparse.

As you build out your network you can write recommendations for your contacts and vice versa, so just like LinkedIn, PropertyQube has the potential to grow as a peer-based review service.

Conversations seem to be the heart of the site and current categories include home buying and selling, home improvement and green living. Conversations are hard to find but the few that are active seem to have pretty good threads running (check here and here).

Beyond that though, there doesn’t seem to be much else to do on the site right now.

Overall, I was left with a big feeling of “OK, so what exactly am I supposed to do with this?” from PropertyQube. The value proposition and how it hopes to differentiate itself from the multitude of other RE social networks that are springing up is not clear.

Real estate Q&A by itself won’t cut it I’m afraid. If they’re looking for agents to provide the content, there are too many other well-established alternatives for agents to focus on; Trulia Voices, ActiveRain/Localism, Yahoo! Answers, Zillow Q&A, just to name just a few. Networking around community is a dead end as well – YourStreet has already come and gone from the space.

Ultimately, success for any social network depends on it achieving a critical mass of users. In order to do this however, PropertyQube is staring at a certain amount of social network inertia and faces a big migration challenge of moving people to yet another platform.

Not to suggest that it can’t happen – there just has to be a clearly defined reason for a user to make the leap, create yet another account and participate in one more online community.

My advice to PropertyQube is to focus on the ROTI (Return on Time Invested). Tell me why I should participate – beyond the fluffy feelgood factor – and what I can get out of it. Is it leads? If so how? Is it profile? What does that mean?

Now that they’ve got the platform out there, it’s time to figure that out.

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