Is that a blog in your pocket?

Farhad Manjoo at Slate posted an interesting article a couple of weeks ago about the economics of social networking sites. Apparently Facebook spends US$1.5 million on electricity and bandwidth every month, and US$2 million a week on new hardware, all to store and display user-derived content that is proving hard to monetise. YouTube has similar problems; both sites are burning through capital like it is going out of fashion.

Does this mean Web 2.0 is going to be the next dot.com bubble? Probably not, but the multi-billion dollar valuation of social media firms is likely to be revised sharply downwards before too long.

Are the prospects for professional bloggers any brighter? If you believe Mark Penn at the Wall Street Journal, there are now more people in the US earning a living from blogging than there are lawyers. I was initially excited by this news, before I remembered that Penn was the genius behind Hillary Clinton’s “Big State” strategy in the Democratic primaries. Lane Hudson at the Huffington Post takes Penn’s blogging figures apart very efficiently; it remains depressingly true that the vast majority of bloggers will fail to emulate Mae West – they may keep e-diaries, but their e-diaries will never keep them.