Just came across buzz.org.au.

The site is ugly as hell (part of the reason I’ve kept their logo so small here) and is a social network backended by Ning’s white label social networking platform.

The pitch appears to be no ads, no apps and a commitment to donate to charity based on the number of members it gets.

In reality it’s a social marketing tool for GMHBA - a private insurance company run out of Geelong, Victoria.

That may not sound too exciting, but they appear to be doing well. Their stats say they have over 7500 members.

Based on the suggested valuation models for social networks put up on TechCrunch a few weeks ago, and assuming that all their users are Australian, their 7500-odd members would value the site at over US$1.1 Million (or over AUD$1.13 Million)

That however, is based on the average annual advertising spend per Aussie Internet user being US$148. At first glance their no-advertising policy would severely affect this, but by using the site as a marketing play for their own private health insurance services they might still be able to do OK.

A quick glance at GMHBA’s policies shows the cheapest annual health cover rate is $368.25 (assuming that the users of Buzz aren’t over 65) for a single with the lowest coverage. Using the NIB as a guide though, where their 328,000-odd policy holders helped them to revenues of approximately $666 Million last year, or $2025 per policy-holder, there’s reason to suggest that each policy holder should be valued much higher.

Either way, i think it’s safe to say that each conversion returns GMHBA between 2.5x and 13.5x the annual revenue of a traditional social network user. Not bad.

It’s all guesswork here as to what the reality is, what the conversion rate is, how profitable each type of revenue stream is etc. but the point is that there are business models for social networks, that can exist outside of 3rd party advertising, for companies who are willing to experiment.

Should be interesting to see how this one progresses.