[aikiai]

Somewhat. Different animals, part of the same ecosystem.

If people are using your site, that implies you are providing value for them. Which implies you should, somehow, down the line, be able to find a way to make money - even if it isn't immediately apparent how.

This logic isn't entirely flawed, despite the fact that it's as unfashionable now as it was fashionable 3 years ago.

A few fundamental flaws to look out for.

I. Being one source of a cheap abundant resource. Very few people will pay for a chat client, no matter how much value it provides them. There are too many freely available competitors.

II. Transaction costs. This mostly refers to the time, hassle, and risk that come along with making online payments, that ultimately come out of the amount you can charge. If the value you are providing is very small, but among a billion people, these transaction costs can prevent you from monetizing.

Any other things to look out for before going for a monetize-later strategy?

[michael_dorfman]

I don't disagree. The question in both of the cases you mention comes down to value-- in both cases, the marginal value provided to the user is too small. The fact that people are using your site doesn't necessarily mean that there is much value there to be extracted.

I'm not suggesting a "monetize-later" strategy, mind you, but if that's the plan, I'd think it a good idea to make sure you have something that can actually be monetized.

[logicalmind]

Another thing that is somewhat interesting about the social networking aspect of some of these ventures is that it makes it easier for people to socialize against you. This could mean something like "fight facebook so they don't charge us" to "let's move to shmacebook they have cool feature xyz". So switching from non-pay to pay could be more troublesome than anticipated.