“Approximately once a decade, a radical new technology emerges that fundamentally changes the business landscape.  In every case, regardless of prior competitive dynamics, businesses that understand and appropriately adopt the technology win, while those that fail to do so lose.  In the 1970s, this was mainframe computing.  IN the 1980s, it was the PC. In the 1990s, it was the Internet.  And today it is the online social graph.” (Clara Shih in The Facebook Era)

The social graph is the world wide web of people.  It is the map of everyone on the Internet and how they are interconnected.  The social graph is for people what the Internet is for interconnected webpages.  Social networks like Facebook, LinkedIn and MySpace are helping to construct this social graph.

Each of these radical technology evolutions has been punctuated by a cycle of innovation, commercialization, emergence of new applications, and then large-scale impact on business.  The online social graph is following this cycle, and is facilitating a “new, more nimble, and more efficient class of businesses that outcompetes those using technology from the previous era.” (Clara Shih)

I started working with the Internet and online communities almost 13 years ago in 1996.  I created Adoption.com, which became the world’s largest adoption service of which I’m aware (measured by the number of people using its services each month).

As my first consulting project I created the initial vision and directed the creation of the first website for Law.com, which I have been told sold for about $20 million within approximately 2 years of launch (unfortunately, I didn’t get any equity in the project).  I also built the Families.com online community and sold it in 2007.

During the last two years I have been doing consulting work for next-generation digital media properties, such as a large iPhone application and the 4th largest Facebook application, with 54 million registered members.

I have also built niche social networks (such as GenealogyWise.com) to leverage the social graph within niche industries.  These niche social networks provide tools that enable members to connect and share content with others who share similar interests.  GenealogyWise is just a few months old, but it already has 13,000+ members, 3,000+ sub-groups on genealogy-related topics, 700+ blog entries, 350+ videos, etc.

How could a social network help your business to seize your opportunity within the social graph?  If you are an accountant or attorney who practices a specific type of law, you could build a social network for people interested in your areas of practice.  If you own an emergency preparedness company or a manufacturing company, you could build a niche social network of your potential clients.   If you are part of a membership organization or are planning an event, a niche social network can help you recruit and develop stronger relationships with members and attendees.  If you are a politician, the social graph is an essential element of your campaign. President Obama’s social media strategy was given a large portion of the credit for his election victories.  If you are interested in sewing or if your child has a health condition, you can build a social network of people who have similar interests.

Then, once you have developed a successful social network, you can generate revenue in a variety of ways, such as selling advertising, directory listings,virtual goods, classified ads, e-commerce and subscription sales.

I have expertise in creating niche social networks, developing social media strategies for businesses, and helping organizations to better monetize their digital media properties. If your business could benefit from qualified, seasoned consulting to better seize the opportunities within the social graph, I would love to help.

Monetization through virtual currencies and virtual goods is a topic that has fascinated me recently.  Online communities have developed virtual currencies which can be purchased or earned, and then can be redeemed to buy virtual goods or services within the community.  For example, a community member could purchase a suit of armor in a multi-player game, or virtual flowers to send to a friend who is sick.

Last month, the Associated Press reported that GaiaOnline.com collects $1 million per month from players buying virtual goods ranging from puppy ears to lightning bolts.

VentureBeat has reported that the MobWars Facebook application generates more than $1 million per month from the sale of virtual goods.

A few days ago MarketingVOX reported that Build-A-Bear’s online community, Buildabearville.com, might save the financially struggling company which posted a $2 million net loss for Q3 earnings.

Today I finished listening to the audio book “Play Money” by Julian Dibbel.  This book chronicles the story of a Wired magazine author who becomes enamored by massive multi-player online games (MMOs), and his attempt to make a full-time job out of selling virtual goods from the game for real-world cash.

Online communities have been criticized for years due to the increased difficulty of monetizing through advertising sales.  Virtual goods and services provide a much more effective way to monetize these online communities than advertising sales.  For example, Last month Adotas.com said that Facebook’s virtual economy will be worth more than $100 million in the next twelve months.

A few weeks ago, I attended the Virtual Goods Summit in San Francisco and was shocked by the number of attendees who are making a living by selling virtual goods.  I believe that virtual goods and services are the best way to monetize many online communities.