I’m getting asked by corporate folks to give them advice or summarize what’s happening in the active social networking arena, the following post is a addendum to the Web Strategy: What the Web Strategist should know about Facebook piece I released a few days ago, read that first as there’s other data points you must know. I’m planning on releasing these monthly summaries of what’s happening in the this industry going forward, my aim is to quickly educate the Web Strategy audience.
Digest of the Social Networking Space: August 15th, 2007
Web Strategy Summary
Adoption rates continue to grow, an excessive amount of white label vendors, many which are receiving funding of questionable amounts, savvy corporations are deploying either in existing networks, or building their own. Data and privacy continue to be a primary concern for users. Unless your audience does not share online, I recommend that corporations develop a strategy for this market quickly, and budget for 2008.
Macro Trends: History repeats itself
I’m watching this industry unfold, in fact, it reminds me of the Portal/CMS industry that was part of the first web phase. I distinctly remember many companies building portals that would aggregate content on one page and how we were racing to build it better than our competitors. (I was the UI designer for MyExodus, a portal at Exodus Communications). I’m noticing this trend, I’ve seen it before, if so, we should anticipate some large companies purchasing many of the white label companies in the coming years.
Trends: Adoption rates show growth
Facebook and Myspace continue to grow, demographic information suggests that white collar middle aged America is adopting Facebook. More stats on this post.
Money: Funding the bubble
It’s threatening and scary to see some white label (websites you can rebrand) social networking companies receive excessive funding. It’s almost as if the investors that fund the venture capital community are questioning “Why don’t we have a white label SoNet in our portfolio?” I’m sure this trend of money being thrown into this industry pot will continue, I’ve been keeping track ofrecent funding activity, Ning gets 44 Million, Hi5 gets 20 Million, Tagged gets 20 Million, Reunion gets 25 Million.
Money: Exit Strategies
While a legacy social network, Classmates.com is one of the oldest and most successful social networks on the block. I had a recent conversation with one of the employees yielded that they have access to much of the baby boomer market across the United States. It’s quite timely that they have an exit IPO (who does that now anyways?) of maybe 125 Million. We should assume that IPOs are the rarity and many will will have an exit from acquisition.
Market Place: Excessive white label vendors
There’s just a handful of standalone social networks (MySpace, Facebook, and a handful of others) but many white label versions (my list has over 60) so it’s very confusing for companies to be able to choose and pick which tool and thus strategy will be right for them. Mark at Techcrunch has done a high level feature matrix of these nine, and now these 34. The market is in need of some industry analysis.
Market Place: Stratification
I noticed a few months ago, that my list was starting to differentiate, there are a few White Label SoNets that were offering their product based on a ‘vertical’. Some would offer to be the best SoNet for sports communities, municipals, education, government, and any other industry segment.
Case Study: Corporations adopt
WalMart has entered Facebook’s widget platform, and has deployed a program for them to cross-up sell products in the college space. I know that many corporations (they email me or call me with questions) are confused about which white label to adopt. Peter Kim has aggregated some of the strategies and tactics folks are talking about.
Mobile: Adoption by necessity
When building your own social network, be sure your site is mobile friendly, communication for this highly connected world doesn’t end with the laptop, most are always on. Others are already playing with Facebook on the iPhone, and as applications and widgets get released for the mobile audience, expect other granularities in targeting useful contextual information to appear.
Advertising: Marketing Networks heat up
There are more players entering the advertising game in Facebook, such as: “Lookery, fbExchange and a RockYou product. VideoEgg now jumps in the mix with EggNetwork”. I see this as a solution for a company that doesn’t have the resources to formerly engage these networks, but wants to be present.
Privacy: Data Concerns
Data is power, so this is an area or intense scrutiny, we’ve suggested that Facebook is a black hole, but it appears that they are opening up so some data can be returned. On a personal onlie strategy, I assume everything I do on any website (except email) is public, I recommend you do the same.
Privacy: Access to personal information
It’s concerning that social network users are willing to offer up personal information to strangers, this test shows that users were willing to give up personal information to a fictional character. We should expect other unscrupulous groups to create a fake persona, connect to people and steal their identity.
Recommendations: Advice for the Corporate Web Strategist
While I understand that many corporations will be dipping their toes (see this adoption and usage list) in social media, I highly advise you to plan for some of these companies not to be around in 5 years, there will be a shake-out, acquisitions, and fall-offs. Be sure that your terms of service include for you to have FULL access to you data, and be able to pull it all out at any time. Secondly, start planning a strategy in your 2008 plans and budgets to enter this market, there are many tactics to enter, read the Web Strategy: What the Web Strategist should know about Facebook.
Let me know if this summary was helpful, if so, I’ll put more effort into it each month.