What I like most about the web is that change is the only constant. Social media and networking may have been ‘the trend’ for the past three years, but it’s tipping point and businesses are now screaming ‘show me the money’.

With the massive adoption of social media across the world (28m people in the UK online and 50% of them on social media), it’s clear where the money is: online and advertisers are hungry. Users no longer shop in the traditional ways of DMs etc, and as budgets shrink, brands have to take their business where the customers are whether they like it or not.

This shift in spending was first recognized when the IAB announced last year that the Internet was bigger than TV in terms of online spending. Even online advertising is predicted to drive the recovery in the advertising industry with the expected fallout.

But the appeal of the social web itself has always been that it’s people-centric. It is less about ‘the man’ and more about ‘the people’. Therefore, earning income from something that belongs to the people will always be difficult. Also, the underlying problem is the fact that it has always been free to use and the growth in its popularity has not been attributed to artificial promotion but to organic growth stemming from the need and ease of connecting with other people.

Therefore, the challenge for advertisers is to make money from the free social web. Today Twitter unveiled the first sign of a revenue model in its promoted tweets. The premise is the same as Google AdWords with sponsored tweets appearing at the top of search results pages and so on. The development has generated mixed reactions, but the main underlying message conveyed by this new development is that the web (more importantly, the social web) cannot survive without the ability to make some money. Free is no longer the order of the day in 2010. An example that proves this point is the strategy that Rupert Murdoch is adopting. Murdoch may not be in the social media business, but he’s no fool… He’s seen the power of online revenue streams and is also trying to get his share of the pie by trying to monetize online versions of The Times or The Sunday Times Online.

But Murdoch, Biz Stone and other entrepreneurs seem to be a bit lost. The plain and simple truth is that once you offer something for free, you devalue it in the minds of users. Once free, always free…unless you have a pretty good way to show additional value in your product or service. And in the case of Twitter, once you give your power away to the people, it’s an uphill battle to get it back. Just look at Facebook and how long it took them to break even.

There has been a decent amount of backlash on the paywall around previously free information and Murdoch himself is playing a risky game. I, for one, won’t spend a penny and will probably switch to another source of equally good content. As for Twitter’s strategy, perhaps the biggest brands are happy to pay money for sponsored tweets, but the return on investment will only come if these promoted tweets are ‘retweeted’ and cause a viral effect. If ‘the people’ do not accept, the model is doomed. It is a well known fact that even with Google sponsored ads or paid listings, 80% of users prefer organic/unpaid listings; that is why search engine optimization has become such a hectic industry.

The problem with social web monetization is that even as we move into the next phase of web 3.0, the power has shifted and now rests solely with us, ‘the people’. Users can use their magic wand (or networks) to make or break a brand/business. And as scary as this may sound to businesses, it’s terribly refreshing. Why? Because it means that companies have to work harder to earn our trust, to make it worthwhile, and to give us the service we deserve as consumers. What entrepreneurs need to realize is: If they do it right, monetization, revenue generation, and profits will just align.