In the spirit of examining the economics of social network services, as I did yesterday with Meebo, today I'm looking at YooNo, another social product that we've reviewed favorably but that appeared to be in desperate need of a business model. YooNo is a social network aggregator: You install it in your browser and it helps you keep track of your friends and what they like.
And here's the revenue model: Today, in addition to announcing feature improvements such as a new IE version and support for MySpace and iMeem networks, YooNo is also announcing the addition of a product recommendation pane. If you're on a site--any site--that mentions a product, author, or artist, YouNo will scan product data from partners Amazon, eBay, Buy.com, Walmart, iTunes, and other stores and display relevant product info. If you buy a product by following one of those links, YooNo gets an affiliate fee.
The service can also be used on the product pages of commerce sites to show other stores that have the same product you're looking for, but possibly at a better price.
When the shopping widget launches on November 24, it will display products based solely on the page you're on and what the partner sites are selling. Future versions will take your friends' activities into account.
As YooNo VP Regan Fletcher told me, "It's really difficult to monetize social aggregation itself. We are monetizing our discovery technology. YooNo bundles social aggregation and discovery together, and we're able to monetize one."
Affiliate fees are substantial, compared to advertising rates, so the model makes sense in theory. Where it may fall down for YooNo in practice is scale. The service is based on a browser plug-in, and that's just a gigantic roadblock to achieving scale in the social media market. With a plug-in as the distribution model, a good product should be able to grab a devoted core base of users, but you don't get to scale quickly these days--or at all--if you require people to install code.