Playing this pivotal role in our internet lives has given major email providers a significant power in shaping the online universe. With a reported 250 million mailboxes each, Hotmail and Yahoo Mail have been the elite in this universe and have brought significant riches to their owners. This is exactly why Google wanted a piece of this game and introduced Gmail in 2004.

But in the past year or so an interesting shift has been happening. Many of the activities that users were performing through their emails is now shifting to social networks which provide a more “social” version of the same. Here are a few simple examples:

• sending emails to family and friends == writing on their Facebook wall
• email photos as attachment == uploading photos to Facebook
• passing chain emails on == inviting friends to apps that do so on your behalf
• taking quizzes and sharing results == filling up quizzes on social applications

This shift is not just limited to personal interactions. Relationships that businesses were establishing with individuals through emails for many years are also moving to (or being augmented by) their social network equivalent:

• signing up with email and validating it == signing up with Facebook Connect
• receiving transactional email == receiving notifications on Facebook
• signing up for promotional emails == becoming a fan of the brand’s page
• receiving promotional emails == status updates from pages on Facebook
• viral growth through address book import == viral growth through Facebook invite

a very immediate implication of this shift is visible in what businesses go after

• buying email lists for promotional campaigns == buying applications with access to millions of users
• white listing business’ email with Hotmail/Yahoo == verifying business’ Application with Facebook (i am sure verification for pages will follow soon)

Obviously a lot of these activities are simply better when you add a social angel to them. Uploading photos to Facebook and tagging friends in it is a ton easier than composing an HTML email and writing captions around images and sending that to your friends. It’s a ton more fun to post that stupid quiz’s results on Facebook and see how your friends react. However, a more intriguing element in the social version of these interactions is the speed at which they happen. When you post a photo on Facebook you will receive your first comment/like/etc in a matter of minutes. Doing so through email usually gets your first reaction in half a day or so (talk about immediate gratification). The same holds true for business interactions. At Zoosk, we see this speed difference very clearly: users respond to notifications within minutes but emails usually take 12 hours or so for impact.

This speed is particularly intriguing and at times surprising. Is it because our email boxes are way more cluttered than our Facebook notification window? I find that hard to believe. There is already a considerable amount of “spam” in our Facebook notifications and feeds. So, why do consumers react to pings on Facebook so much quicker? I don’t know that answer to this question yet. Here are a few of my theories (leave your theories in comments)

• sense of urgency: my notifications/feed stories/etc will go away. I need to do something now
• state of mind: I am on a social network to sink time, so I am more open to triggers
• social element: my friends will see my action and potentially participate with me so I am more inclined to do something

right now it seems like these two systems are running in parallel. I receive an email for almost every Facebook notification that I receive. But I suspect that this balance won’t last for long. Especially if the effectiveness and speed of this new medium continues to be superior to email as we push more and more interactions onto it.

[side note: This is a critical time in web email services' life. If they are not careful, their power could diminish very quickly. Hotmail and Yahoo are both responding to this shift with "Windows Live Network" (or whatever the social element of hotmail is called) and "Yahoo Connections" both of which are trying to bring social (as in my friends and family) to their experience. I am not convinced that just capturing my social graph (which by the way they both do a horrible job of it) is going to be enough. We recently saw Google take a more ambitious approach to evolving email with their Wave project. The big three internet companies have failed to get social networking right and now they are seeing their grip on email (the other starting point for our surfing habits besides search) is eroding because the same social networks are replacing them.]

As for businesses, this shift/battle means that they need to perfect both mediums until (or if) a clear winner emerges. You still need to whitelist your email servers and also get your Facebook application verified. Yes, this means more work, but you have more opportunities to stay connected to your users. The trick now is to make sure your communication strategy takes the special characteristics of each medium into account and uses them appropriately.

These ads are so profitable that they usually outbid any other advertisers on any network. If Google was not fiercely combating them, the would take over the overall online advertising universe. The actually come in a very few formats that I am sure you have noticed them

• Crush Ads: Someone has a crush on you!
• IQ ads: What is your IQ?
• Age Ads: How old are you really?
• and a few more “creative” ones

What percentage of ads on social media are composed of these scams you might wonder. According to insiders in multiple ad networks, it is as high as 70% of their revenue! Basically if you are monetizing your product through social ad networks, your business is probably being financed by scam ads.

We learned this very quickly when we were running social ads on Zoosk last year. First sign was when we started getting complaints from users that we should stop charging their cellphones. But Zoosk didn’t have any mobile features at the time. Once the volume of these complaints got to a level above noise, we did a few follow ups and quickly learned that these users were tricked by the scam ads to give out their cellphone numbers and not knowingly they were being charge on a monthly or sometimes biweekly basis for something around $10!

We tried to block these advertisers manually from our apps, but it turns out that if your ad network doesn’t fight them it is very hard for the publisher to effectively block them. We knew that we would be getting lower eCPMs by doing so, but we decided to switch from all the known social ad networks for basically this reason.

At the same time I understand why these up and coming ad networks can’t afford to remove these advertisers from their networks. Publishers flock to highest paying network on a whim and if a network drops 70% of their revenue, it will certainly die. Only Googles of this market can afford to fight these guys hard. I must give Facebook credit. They at least try to block these advertisers through their “ad policies” and even though I don’t agree with their method of combating these guys, at least they try.

What about publishers? Properties such as Zoosk that manage to directly monetize consumers have an easier way of turning down higher eCPM payouts by cutting scam ads (which I am super happy about . However, if advertising is your main revenue stream, it is very hard to turn down the higher eCPMs.

That being said, I want to argue that publishers should fight the urge to stay dependent on such ads for their own long-term livelihood. These ads and companies behind them won’t last long term. In many countries around the world consumer have finally been able to fight these scams. Over the past two years consumer rights groups have been able to pressure phone carriers to not allow these offers to operate on their network. As you can imagine carries play a very tricky role in this whole game. They don’t mind the revenue generated by these offers (sometimes they get half of the payout on these offers) but also don’t want to be known for supporting scams. And they have started to give in to the pressure from consumer rights groups. Even china recently passed laws that make the life for the companies behind these offers so hard that most of them have completely disappeared. I am sure US carriers will do so in the next 12-18 months as well.

Once 70% of revenue of ad networks disappears due to legislation or carrier policy change social media publishers relying on these advertisers will see a significant drop in their eCPMs (remember when Facebook forced Social Media and Cubics to clean their act to some extent last year? first effect was slashing eCPM rates). If your company is addicted to such incomes and hasn’t worked “harder” to figure out better ways to monetize you will be in a very grim situation once the plug is pulled. Not to mention that you would be doing your customers a big favor by saving them from these notorious scam techniques on the web today.

So what do you say Social Media publishers? Let’s fight these scams to both protect our users and also build companies that can outlast scammers.