“If you can tap into that and then there’s sharing, if you have a big audience that’s engaged with you, you will be able to make money off it,” said Jupiter Research analyst David Card.

Although many fun-and-games widgets do have this viral power, analysts believe there is more money to be made by making these applications richer.

Useful widgets that let people share experiences naturally aid viral marketing and increase the efficacy of targeted advertisements, while keeping people online longer.

“Widgets that keep you updated on concert tour dates for your favorite bands, weather widgets — there’s a lot of promise in that kind of campaign,” Card said.

— By Anupreeta Das

SAN FRANCISCO, Reuters

A conviction that this is the road to success for social networking has led many investors to fund useful widgets.

Silicon Valley venture firm Khosla Ventures and IAC/InterActiveCorp’s Ticketmaster have invested in iLike, a program that lets people post songs on profiles and has a link to Apple Inc’s iTunes store so friends can sample and buy the music.

But many analysts cautioned that marketing tailored to people’s online behavior — while an exciting opportunity for companies — might not succeed if people feel their privacy is intruded upon.

Sites are also grappling with the challenge of serving up unobtrusive ads that will entice users to click and share with friends.

Facebook’s Beacon was an early experiment in such marketing, but “it was perceived as forcing users to recommend their purchases indiscriminately to their entire circle of acquaintances,” said Datamonitor’s Pierce-Grove.

But with many analysts expecting social networks to eventually become one-stop destinations that meet all online needs, from e-mail to e-commerce, marketers are likely to continue to try to make money by encouraging users to share with friends and then targeting ads based on their behavior.

People are not yet accustomed to such advertising, said Michael Osterman, who runs Osterman Research. But he noted that while marketing via e-mail initially caused a furor, people now expect it.

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