SOCIAL NETWORKING
 A social networking site is an online place where a user can create a profile and build a personal network that connects him or her to other users. In the past five years, such sites have rocketed from a niche activity into a phenomenon that engages tens of millions of Internet users of all ages but especially young people. More than half (55%) of all online American youths ages 12-17 use online social networking sites, according to a new national survey of teenagers conducted by the Pew Internet & American Life Project.
The survey also finds that older teens, particularly girls, are more likely to use these sites. For girls, social networking sites are primarily places to reinforce pre-existing friendships; for boys, the networks also provide opportunities for flirting and making new friends.
According to Wikipedia "the first social networking website was Classmates, which began in 1995." Since then numerous Social Networking sites have been developed using a variety of models, with some achieving critical mass. Wikipedia again: "Google has a social network called Orkut, launched in 2004. Social networking began to be seen as a component of internet strategy at around the same time: in March 2005 Yahoo launched Yahoo! 360°, their entry into the field, and in July 2005 News Corporation bought Circle of Friends-based MySpace, followed by ITV buying Old Boy Network-based Friends Reunited in December 2005."
 "In the majority of these communities, an initial set of founders sends out messages inviting members of their own personal networks to join the site. New members repeat the process, growing the total number of members and links in the network. Sites then offer features such as automatic address book updates, viewable profiles, the ability to form new links through "introduction services," and other forms of online social connections. Social networks can also be organized around business connections, as in the case of LinkedIn."
"Blended networking is an approach to social networking that combines both offline elements (face-to-face events) and online elements. MySpace, for example, builds on independent music and party scenes, and Facebook was originally designed to mirror a college community, though it has since expanded its scope to include high school, job-related, and regional networks. The newest social networks on the Internet are becoming more focused on niches such as travel, art, tennis, football (soccer), golf, cars, dog owners, and even cosmetic surgery. Other social networking sites focus on local communities, sharing local business and entertainment reviews, news, event calendars and happenings."
Click on the link to see Wikipedia's list of Social Networking websites.
 There is no question that Social networks, mobile video and 'Googlism' will continue to transform the Internet in the years ahead. "The Google revolution is not over yet," said Safa Rashtchy, managing director and senior analyst at investment firm Piper Jaffray, speaking at the Global Internet Summit in California (USA) in June 2006. "Social networks are poised to shape the Internet's future, despite some skepticism about how they will make money. Social networks like MySpace.com are already challenging traditional portals. MySpace, for example, has surpassed MSN and AOL by a measure of monthly page views, and its traffic equals roughly 75 per cent of Yahoo's, the number one site on the Web."
However other panellists at the Global Internet Summit openly questioned how and if these companies make money, comparing the frothiness around social networks and video sites like YouTube.com to the height of the Internet bubble. The answer appears to lie with the established Media and Internet companies like News Corporation and Google which are undertaking a virtual land-grab of sorts, buying Social Networks and collaborative sites to gain access to their members and users and implement revenue earning models, primarily based on advertising and ecommerce.
"Growth opportunities within the market would be for niche communities targeted at middle-age or young Web surfers", Rashtchy said. The overarching thesis, according to Rashtchy, is that online advertising dollars continue to lag behind Internet usage in the US. Roughly 172 million Americans visited the Web in a month in 2006, according to ComScore, but online advertising sales, expected at $16bn in 2006, are still a small fraction of the hundreds of billions of advertising dollars spent annually."
"For this reason, content and communities are corners for investment and growth", Raschtchy said. One issue for advertisers is how to ensure they are not inadvertently associated with unsuitable material on blogs or social networks. However there are other growth opportunities and revenue channels too, such as mobile devices and video.
The Social Networks are clearly confident about their own potential which is not surprising given the impact they are having on the ability of individuals with access to the Internet anywhere in the world to communicate, collaborate and publish creative work (whether written, oral, music or film).
 BBC Click, in an article entitled "Rise of the web's social network" (30 September 2006), recently quoted social network Bebo's Sarah Gavin talking about the growth of Social Networking: "It's really powerful. I think it's the first time that individuals have got the power. We've got authors up there publicising their books. If they're just starting out as a film producer they have the opportunity to get their content up on the site and go out to the general public to see what they actually think about it. It's a hugely powerful medium and people are just starting to grasp how effective that can be."
MySpace is widely credited with initiating a revolution in the music industry that has put long-established "off-line" companies like EMI under financial pressure, enabling musicians like Lily Allen and the Arctic Monkeys to create fan bases online, inexpensively and without the backing of a record company.
As BBC Click reported, others have achieved success through sites like MySpace too, such as Club and radio DJ Dan Greenpeace who was introduced to Myspace by friends in America in 2005: "I use Myspace primarily for networking. What I like about it is people can access me and access information about myself and what I'm working on. It's a much more personal and interactive way of communicating with people out there who are actually interested in what you're doing."
Bebo's Sarah Gavin again: "One of the key things for us was music, which has been hugely successful for us. We've got over 100,000 bands signed up in six weeks. The other thing we've really seen in the last 12 months is a trend with video." (By June 2007 Bebo had 500,000 musicians registered on its site, including both undiscovered bands, and established acts, with about 4,000 bands estimated to sign up to the site each day.)
"On the smaller end of the scale, sites are specialising to appeal to specific groups. Dedicated music network Last FM uses software called audioscrobbler to track the musical tastes of its members. These profiles can be used to suggest community groups that like the same music, or introduce its members to new music which matches their existing profile. Last FM's Martin Stiksel says: "I think the future of social networks still lies in the connections between people and the potential that lies in these connections between people. If there is a possibility to pool all of this knowledge, like there is in a social network, to the benefit of everybody, that's a really, really powerful thing."
"Some social networking sites restrict who can use their site. While most social networking sites do not discriminate, and allow anybody to log on, a few sites have cropped up with a very particular sort of user in mind. Beautiful People's entry criteria are simple - good looks. Beautiful People's Greg Hodge says: "Beautiful People is like an elite online club where every member works the door. Essentially you put up a picture and a profile where you're rated over a three day period by members of the opposite sex on whether or not they deem you attractive enough. It is not just, as you'd expect, a dating site. It's become a site where people will help each other find apartments, find work, they have sensational parties."
 The concern for Social Network founders and investors alike is how long they will remain popular. As discussed on Knowledge@Wharton in May 2006: "Popular social networking sites, including MySpace and Facebook, are changing the human fabric of the Internet and have the potential to pay off big for investors, but - given their youthful user base - they are unusually vulnerable to the next 'new new' thing. As quickly as users flock to one trendy Internet site, they can just as quickly move on to another, with no advance warning."
"Wharton marketing professor David Bell says the long-term success of these sites will depend on their ability to retain the interest of their members. "There is a fad or a fashion component to all these networks. Some will come and go," says Bell. The classic example, he suggests, is Friendster, which burst onto the Internet in 2003 and soon had 20 million visitors. In 2005 it slipped below a million after MySpace and other sites with better music and video capability lured Friendster users away. "A lot of the [success] is serendipitous. These things can have exponential growth. Then, if another community shows up that has better functionality in some way, there can be a mass migration."
"Wharton marketing professor Peter Fader says the forces that make a hot site are difficult to quantify; any site could become the next outcast. "There is no reason to believe that these, or future ones that are emerging on the radar screen, will be any different. I don't think anyone can come up with a genuine reason why they have become so popular, outside of 20-20 hindsight."
It seems the smart money is on the Social Networking sites that are able to extend their reach beyond the computer screen to cell phones. "Cingular Wireless, Sprint Nextel and Verizon Wireless are starting a service that will allow users to post messages on Facebook's home pages or search for other users' phone numbers and email addresses from a cell phone. MySpace has a pact with Helio, a wireless joint venture between SK Telecom and Earthlink, that will allow users to send photos and update their blogs or profiles by cell phone."
 Other developments include the emergence of new "micro-social networking sites like Twitter.
On 12 June 2007 the Financial Times reported various new developments being launched by Social Networking sites, underlying the drive towards innovation:
"Apple is tapping into the popularity of social networking sites, as it announces a deal on Wednesday to embed its iTunes internet music download service into the Bebo website. From Wednesday, Bebo’s 8.8m users in the UK and Ireland will be able to buy music directly from the profile of any musician who has a Bebo profile and whose music is available on iTunes."
"The deal with Bebo will give Apple a deeper reach into the market segment of 16- to 24-year-olds, who are both keen users of social networking sites, and key consumers of music. Some 32 per cent of 16- to 24-year-old internet users visit social networking sites at least once a month, making the demographic the leader of the social networking trend, according to the European Interactive Advertising Association. However, 16- to 24-year-olds are also frequent users of illegal music downloading sites, and Apple is keen to encourage them to pay for music by making the process quicker and more accessible."
"Mobile telephone operators Vodafone and Orange have also signed deals with MySpace and Bebo, respectively, hoping to increase the use of the internet through mobile phones by encouraging social network users to access pages via their handsets."
"In May 2007 Facebook, another popular networking site, unveiled plans to allow outside companies such as Amazon, the online shopping site, to embed customised features in Facebook pages."
 In terms of current growth, Hitwise reported on 22 May 2007 that "MySpace and Bebo continued to dominate the UK social networking category in April 2007, with 67% of category visits. Whilst MySpace maintained a slight lead over Bebo in April (less than 1%), Bebo looks sure to overtake MySpace in share of UK internet visits in May, ranking #1 each of the past three weeks."
"The two social networking leaders continue to grow at a rapid pace, with UK Internet visits to MySpace increasing nearly two and a half times from April 2006 to April 2007 and visits to Bebo increasing 3 times."
"Facebook, which opened up to accept all Internet users in September 2006, has seen its share of visits soar, up 9 times since September. Previously it had been limited to those with a college or high school email address and more recently to business addresses."
“Social networks are derided by some as last year’s fad, however UK consumers are showing that demand continues to rise”, commented Heather Hopkins, VP of Research for Hitwise UK. “Social networks are increasingly part of the flow of Internet traffic, highlighting the importance for brands and advertisers to build a presence in these communities.”
The Market Share of UK Internet Visits to the Top 10 Social Networking Sites according to Hitwise, in May 2007, was as follows:
1st place - MySpace - http://www.myspace.com - 33.77% share
2nd place - Bebo - http://www.bebo.com - 33.53% share
3rd place - Facebook - http://www.facebook.com - 12.82%
4th place - Faceparty - http://www.faceparty.com - 4.00%
5th place - Piczo - http://www.piczo.com- 3.36%
6th place - Friends Reunited UK - http://www.friendsreunited.co.uk- 2.12% share
7th place - Tagged - http://www.tagged.com - 1.60% share
8th place - hi5 - http://www.hi5.com- 1.47% share
9th place - Windows Live Spaces - http://spaces.live.com- 1.10% share
10th place - Facebox - http://www.facebox.com- 0.93% share
For more about selected Social Networking sites see:
[This section is currently being updated - please check back soon.]
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