There’s no hiding the fact that Facebook is the largest social media network in the world today.

Ranked #2 for global internet traffic and with a membership now of over 500 million, that’s a huge network that is no doubt the envy of every internet marketer out there.

Naturally the success of Facebook has resulted in many competitors trying to emulate the success of the social giant over the years but thus far none have prevailed.

One of those competitors is MLM startup YourNight, who appear to be the first to partner social networking with an MLM income opportunity.

Social networking with an MLM compensation plan? Hmm…how’s that work?

The primary difference between Facebook and Yournight is the $10 subscription fee required to earn a commission through YourNight.

This is required because YourNight pays out a commission to its gold members and that money has to come from somewhere, but more on that later.

YourNight as a social networking platform aims to combine several social media niches under one banner and over time grow a sizable memberbase.

The phrase ‘jack of all trades, master of none’ continued to resonate through my mind as I conducted my research into YourNight.

Without even looking at the compensation plan, the problem with YourNight’s social networking model is that it’s profit driven and competes with several well established social networking sites in their own respective niches.

These already established sites are mostly offering superior services for free although some do have a subscription based option.

The value in these established sites however isn’t the services offered to members but rather the member base themselves.

Think about it, would you join Facebook today if nobody you knew was on it?

The memberbase is the commodity and what sites like YourNight fail to realize is that, no matter how good or bad your service might be, nobody is taking these established sites down without a mass exodus.

When Facebook made MySpace irrelevant, it wasn’t something that gradually happened over time – it happened overnight.

There was no hype driven pre-amble, no ‘Facebook will be the next MySpace’ campaigns… instead, they just opened up the user to user communication experience in ways MySpace couldn’t compete with and the rest is history.

Overnight Facebook made MySpace redundant and Facebook are going to stay on top till somebody does the same to them.

The big question then I guess is whether or not YourNight is that company.

Being a social networking site, YourNight itself doesn’t retail any tangible product but instead generates revenue via membership subscriptions.

Paid subscription members who join YourNight are encouraged via their compensation plan to go out and recruit other members and get them to subscribe to the premium Gold service.

Signing up to YourNight is free and places you under what they call ‘basic membership’.

The main differences between a Basic membership and Gold is that Basic restricts you to just three of the five profiles on offer.

Whilst Gold offers you a family, friends, business, dating and blogging profiles, basic membership cuts it down to three, restricting the professional and dating profiles for Gold members only.

The other major disadvantage of the basic membership is that you are not eligible to earn a commission on those you refer.

You can still earn some money however via theĀ  (as far as I can tell yet-to-be-launched) shopping portal. This commission is 1% of the affiliate sales your downline purchase via the shopping portal.

I couldn’t find any information on whether or not the shopping portal has launched yet so I can only assume it hasn’t.

I did however find a barrage of ‘coming soon’ marketing spiels about the portal dating back several months, indicating the shopping portal has been a long time coming and missed several release deadlines.

YourNight’s money-maker lies within its Gold membership offering. For $10 a month members are granted access to all five social networking profiles on offer and more importantly, are entitled to earn a commission on those they’ve referred to the network itself.

The YourNight compensation plan is an infinity wide and seven levels deep matrix. The monthly residual payout is as follows.

Level 1: $2 per Gold member

Levels 2-7: 50c per Gold member

Note that there is a promotion running for Level 7 offering $1 per member to the first 1000 YourNight members who reach Executive Gold status (5 paid gold memberships on your frontline).

As far as I can tell this is still on offer which is a bit worrying considering YourNight launched back in November 2009.

Despite wild estimates ranging from a few million by June 2010 to 50 million by November 2011, YourNight had only managed to attract 104,000 members by July 2010 with 65,000 of those being active.

Not a small number as far as MLM startups go, but let’s face it – not much in the hundreds of millions userbase that use social networking today.

The worrying aspect of course is that the fact that YourNight hasn’t reached 1000 executive gold members yet after nearly a year of operation is a rather bleak indiciation of the company’s success thus far.

Or more precisely, the success of YourNight’s members in signing up other members and encouraging them to purchase the Gold subscription service.

As you can see from the compensation plan, YourNight primarily pays out commissions based on how effectively its members can sign up new people and get them to sign up to the paid Gold subscription membership.

With no tangible product other than access to the company’s social networking services, this of course is a bit worrying.

With the shopping portal active YourNight might have a shot at legitimacy but currently you’re only paid out if you recruit new members to the site who in turn sign up to the paid subscription service.

Then, out of the $10 per month they pay – you take home at best $2 and the company makes $8. Remember, this is monthly recurring and the primary source of revenue for the company.

YourNight primarily generating revenue from subscription fees via its members who have a primary financial incentive to recruit others to the paid subscription service is of course again another red flag.

Advertising does feature on YourNight but is obviously not a primary source of income. The YourNight terms and conditions state that

YourNight has a NO REFUND policy on all paid subscriptions in order to keep a balance in the Rewards and Donation program offered by YourNight.

This strongly indicates that YourNight is solely relying on subscription fees to fund its compensation plan, rather than retailing any tangible product.

Stepping back from the ‘next biggest social network’ hype, it does appear that YourNight’s business model is relying heavily on a pre-existing user base integrating with a monthly paid subscription service.

Apart from the convenience factor of having most of your social networking sites linked together, I see little to no incentive to join YourNight without the business opportunity attached.

And of course there’s always the question of is that convenience really worth $10 a month?

The user base is small and at the end of the day the size of the user base is the greatest asset of any social networking company.

This should be the incentive to drive new members to the site rather than any financial reward – especially if the company is being touted as a business opportunity.

Simply put, YourNight doesn’t yet have a sizable user base so you’re not really paying for access to their user base.

Without the shopping portal, in essence you’re paying for the ability to earn commission from people you sign up, who are then also encouraged to go find people to sign up so that they too can start earning a commission.

This process is then duplicated and repeated again and again as you must recruit a minimum of five Gold members to start getting paid recruitment commissions.

I know what that sounds like to me…


Update 31st May, 2011: Despite projecting 50 million members by November 2011, sometime in May YourNight has ceased to exist.

The website domain has been decommissioned but is still registered to CEO Verne Packer till 2017.

Apparently Packer is rebranding YourNight under the new name BizOppers.

BizOppers prelaunched back in January 2011 and is going into launch (or leaving beta launch) come June 1st.