I think this basic idea is flawed - social networks can be profitable because social networks have been profitable. The vast majority of social networks have not been profitable because the vast majority of startups never reach profitability!
Perhaps a better question (and a more interesting debate) is whether a social network can ever keep up with users and their changing tastes. Myspace was once dominant, but Facebook quickly destroyed it. Digg was once dominant, but Reddit supplanted it. Looking back at the history of the web, there seems to be a point where social networks either fall out of relevance (or muck up a good thing).
Not sure what the answer is to that question...If you look at Myspace, you could argue they died because they failed to change. If you look at Digg, you could just as easily argue that they died because they changed. So, I'd argue that social networks need to stay half a step ahead of their users' tastes to stay profitable. I'm not sure that's possible, so social networks need to diversify (likely away from pure social networking) to stay profitable.
Perhaps a better question (and a more interesting debate) is whether a social network can ever keep up with users and their changing tastes. Myspace was once dominant, but Facebook quickly destroyed it. Digg was once dominant, but Reddit supplanted it. Looking back at the history of the web, there seems to be a point where social networks either fall out of relevance (or muck up a good thing).
Not sure what the answer is to that question...If you look at Myspace, you could argue they died because they failed to change. If you look at Digg, you could just as easily argue that they died because they changed. So, I'd argue that social networks need to stay half a step ahead of their users' tastes to stay profitable. I'm not sure that's possible, so social networks need to diversify (likely away from pure social networking) to stay profitable.