[uxcn]

Social sites really aren't easy to monetize without pissing off your users. MySpace imploded, Twitter still isn't profitable, Google backed off'ish from Plus, etc... I think Facebook is one of the few that seemed to successfully monetize a free social site.

I think the issue is that Pao (et al.) genuinely don't understand their community. That's the major source of the friction. Consequently, they can't figure out a realistic plan to build a healthy business around it. They seem to manage to piss a large percentage of their community off with every minor change they try to make. It's a bit sad because it's a huge community.

Possibly Aether (http://getaether.net/) might be something like what you have in mind.