Reunion.com and Wink hook-up

Even top social networks such as MySpace and Facebook have a tough time monetizing traffic. So, just imagine how hard it is for the smaller players.

Perhaps one approach to deal with this issue is consolidation, right?

Well, this week Reunion.com and Wink have agreed to a merger. In fact, the companies plan to create a new brand (to be launched early next year) and focus on so-called "people search." The goal is to build a database with 700 million user profiles. How? There will be integration with the myriad of social networks across the globe.

There will be resources to execute on the business model as last year Reunion.com snagged $25 million in venture capital.

In fact, Reunion.com is profitable since the company charges for premium services, such as to view certain user profiles and since it has attracted an older demographic (because of the desire to reunite with former friends and classmates).

Despite all this, VCs are showing less enthusiasm for social networking deals. In other words, Reunion.com and Wink will likely need to be frugal in building out their new brand, which will certainly not be an easy task.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.