From the article, a viral expansion loop is:
"... a type of engineering alchemy that, done right, almost guarantees a self-replicating, borglike growth: One user becomes two, then four, eight, to a million and beyond. It's not unlike taking a penny and doubling it daily for 30 days. By the end of a week, you'd have 64 cents; within two weeks, $81.92; by day 30, about $5.4 million.
Viral loops have emerged as perhaps the most significant business accelerant to hit Silicon Valley since the search engine. They power many of the icons of Web 2.0, including Google, PayPal, YouTube, eBay, Facebook, MySpace, Digg, LinkedIn, Twitter, and Flickr. But don't confuse a viral loop with viral advertising or videos such as Saturday Night Live's "Lazy Sunday" or the Mentos-Diet Coke Bellagio fountain. Viral advertising can't be replicated; by definition, a viral loop must be."
This isn't just viral marketing, where a user finds something cool and passes it on, and they pass it one, and so on. Instead, the viral expansion loop gets people involved in identifying and organizing the content, and even the network itself. I create a network on ROI marketing, for example, and I invite my friends. They get involved and networks on search engine marketing, email marketing, and blog marketing result. What happens over time is that the more people involved, the more networks created, the more valuable it becomes and eventually, everyone is on some type of network. The network creates new networks constantly, resulting in extremely niche-focused content and users. What you end up with is "millions of little networks within narrow channels, each delivering the kind of targeted advertising that Google rode to vast riches," the article concludes.
As a marketer, this really starts to change the game. Instead of only trying to identify and target a specific type of consumer, (and networks like those on Ning make that even more possible,) I can in fact, play a role in creating such a network from scratch.
