Weekly Digest of the Social Networking Space: Feb 18, 2009

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I’m respecting your limited time by publishing this weekly digest on the Social Networking space, which I cover as an industry analyst. By creating this digest (I started this over a year ago) it really helps me to stay on top of the space I cover.

I’ve created a new category called Digest (view archives). Start with the Web Strategy Summary, then quickly scan the succinct and categorized headlines, read text for my take, and click link to dive in for more.

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Web Strategy Summary
Twitter raises a very large round of funding, potentially enough to last the economic drought for their small company. LinkedIn and Facebook demonstrate they continue to grow –especially in a recession. More individuals are worried by Facebook’s new Terms of service, which the CEO has responded to.


Funding: Twitter raises $35mm –without generating any revenue
Raising money in a recession is always tricky, valuations fluctuate, and business models do too. Twitter raised a cool $35mm (one of the largest rounds since the recession was announced in Oct 08), despite not generating any revenue. Their hype, buzz, and accelerated growth (albiet a small community of estimated of around 5mm from some news sources) leave many wondering if they will generate revenue from brands.

Recession: Linkedin continues to grow during a recession
The social networking industry has opportunity during economic downturns, perhaps this is due to people having more time to after being laid off, those want to connect and find new opportunities, or the natural instinct in many social animals to find safety in numbers. Comscore data shows an increase in total unique views since the recession was announced in Sept. Do see this report from Pingdom that indicates that Twitter and LinkedIn’s network availability may be changing.

Stats: Facebook continues to grow
Now reported to have 175mm users with 600k new users everyday this social newtork continues to grow. Already saturated with you, now the fastest growing demographic is “Women over 55, up 175.3% in the last 120 days. Facebook growing faster with women than men in almost every age group.”

Feature: MySpace to index and search images
MySpace has confirmed that it recently went live, and indexes around 3 billion of the site’s 7 billion photo according to coverage by Techcrunch. This feature will allow people to quickly find related content, and could help with contextual advertising.

Security: Dangers of Social Networks
Recent PCWorld article discusses with so many people in one location the dangers of a social network being hacked and exposing a great degree of personal information in one place. Given users don’t’ pay for a contract, nor terms of service, this is a liability most don’t foresee.

Privacy: Facebook’ Terms of Service Scare
More than a few folks are concerned about private and personal data, but when articles that suggest that Facebook’s terms of service mean they can do anything they want at anytime, (like forever) it starts to scare on folks, do read Mark Z’s response.

Ning continues to grow, despite porn removal
A few months ago, Ning made a bold announcement to remove all adult content from their network, despite this gash in content inventory, they still continue to grow, Techcrunch cites Comscore data

Usage: Surge in Europe, acceleration in France
Comscore reports that social networking in Europe is up, with France having a 45% year of growth. Key finding: “Of the 282.7 million European Internet users age 15 and older who went online via a home or work computer in December 2008, 211 million visited a social networking site – representing a penetration of 74.6 percent”

Culture: Facebook is for the old?
Time Magazine gives some pretty silly –and somewhat true reasons why Facebook is for old folks, funny thing is, my parents nor my grandma is on it …yet.

Culture: Hackers take aim at celebrity accounts
Apparently, Miley Cyrus, who plays Hannah Montana, knows how to write a lot better than her hackers led on. This is the second case we’ve heard of Twitter being ‘hacked’ in a few months.


If you’re a social network, or widget company, I want to know of your news, send me an email, or leave a comment below. Help me stay up to date.

Hungry For Social Networking Stats? Then you should see my collection of Social Networks Stats for 2008 and 2009. Bookmark them, then share it with others as I continue to update it.

  • http://blog.stealthmode.com francine hardaway

    I must have an empty life, because I have read all these news stories before the digest:-) Keep up the good work!

  • http://www.racetalkblog.com Kyle Austin

    This is a nice wrap-up Jeremiah and has become part of my weekly reading to check-up on what I may have missed / looked over.

    Question – Wasn’t Twitter in decent position to weather the recession already with $20 million in earlier funding? I realize that they aren’t making any money but their burn rate can’t be that high?

  • http://www.web-strategist.com/blog/ jeremiah_owyang

    Francine, You gotta wait for me ;)

    Kyle, we don’t know what Twitter’s server and network costs are yet.

    Also, this money isn’t just for ‘holdin on’ but for growth and expansion.

  • Craig

    Over the last two months, my mother, and hence all of her age 60+ friends, have joined Facebook. This from a woman who thought it was for “bad things” not six months ago.

  • http://www.web-strategist.com/blog/ jeremiah_owyang

    Craig

    I noticed a surge in my own world of friends and family around xmas time.

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  • http://www.kunocreative.com John McTigue

    For Twitter, don’t you think it’s the same old Internet play, jack up the membership and sell the whole thing to the highest bidder?

  • http://www.web-strategist.com/blog/ jeremiah_owyang

    John

    For an early site, yeah, but the acquirer needs to eventually have a sustainable business model.

  • Jenifer Olson

    Hi Jeremiah,

    Thank you for this great summary… very helpful! That said, I have a quick question for you on a recent topic.

    A recent post by Advertising Age listed 9 ways Twitter could monetize the business:
    1 Charge for it
    2 Advertising
    3 Create a contextual ad engine
    4 Charge for analytics
    5 Enable Mobile Payments
    6 Create subscription based groups
    7 A Twitter Pro version
    8 Merchandising
    9 Sell the company

    Interestingly, I hear via The Industry Standard that there is even betting now on what the new business model will look like.

    What are your thoughts on this and, knowing what you know, how would you monetize the business if it were your call?

    Thanks,
    Jenifer

  • http://www.web-strategist.com/blog/ jeremiah_owyang

    Jenifer, I do see the need for enterprise brands to get involved, so if that’s their strategy it makes sense.

    Secondly, providing brands services and analytics means it won’t be a advertising solution, non-disruptive to the user experience.

  • http://www.LiveWorld.com/Bryan Bryan Person

    For all of the Twitter hype, isn’t it impressive that Facebook is getting a Twitter’s worth of new users every 7-10 days?

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