On the surface, the Economist’s revelation that social networks might not be great money-spinners isn’t all that, well, revelatory.

Like all other content/communication platforms social networks really only have two options for making money – subscription (think premium Linked In) or advertising (think Facebook’s Beacon…..mmmm).

Given that a successful network is only as successful as the ease of connections it allows, restricting a network to a subscription-based service might be a little limiting. But then again, it might be preferable to the friendly free-for-all that is Facebook.

We continue to think that smaller focused, niche networks have the potential to succeed (but, trust us, they are hard work to maintain).

This is where the Economist story gets interesting. Rather than extolling niche networks it puts its stock in the root power of our online connections…..our email address book.

If networks really do thrive on constant contact and the tick-over of social connections then an open social network driven by daily email or IM or, even, Twitter contacts might be the antidote to the closed world of a Facebook or Bebo.

Just don’t expect to make a fortune from all those connections…..

- Matthew