5 Comments

1. Did you see Datamonitor’s analyst’s report: “Social networking’s explosive growth set to level out in five years”?

   – TCG

2. Nah, I haven’t seen it – do you have a link? & that is contrary to every report I have seen – especially the growth of mobile social networks. “ABI Research found that “mobile social communities” currently count nearly 50 mln members worldwide, a number that is expected to reach 174 mln in 2011.” – that doesn’t look like levelling out to me… 🙂

3. Here is the full text. Hope we won’t break any copyright laws.

   –>>

   Social networking’s explosive growth set to level out in five years

   Virtual communities and online social networking sites are providing a new, powerful and extremely popular medium for human connection. Global active memberships in social networking sites are expected to reach 230 million at the end of 2007. However, the impressive growth of this market is set to level out by 2012.

   For social networking services, barriers to entry are virtually non-existent, and both competition and innovation are ferocious. Users have a vast array of options, from Titanic generalists like MySpace and Facebook to tiny individual networks on DIY platforms like Ning. This year, revenues from social networking services should reach $965 million, growing to $2.4 billion by 2012.

   Explosive growth in social networking will plateau by 2012; earlier for the US

   Social networking is growing around the world, everywhere people have internet connections. Most large social networking services, especially those that allow the distribution of content like video, have a very long tail of geographic distribution.

   According to Datamonitor, by year-end 2007, Asia Pacific will account for 35% of the world’s social networking memberships. Europe, the Middle East and Africa (EMEA) will hold 28%, North America 25%, while the Caribbean and Latin America (CALA) will account for 12%. Adoption curves vary dramatically by region, but membership growth in all regions is expected to have peaked by 2009, and to have leveled out by 2012.

   Currently, there are two strains of thought about this market, both strongly influenced by memories of the e-commerce boom at the beginning of the century. At the moment, prevailing sentiment is excitement combined with anxiety. Players fear missing the next Google, the next Yahoo. But mixed with this exuberance is a thread of cynicism. Investors remember how few internet startups survived the market downturn, and are repelled by what they see as overconfidence. The bulk of social networking sites are wise to postpone any consideration of an IPO.

   A sane approach to this market requires balancing the two perspectives. The extraordinary proliferation of online social networks is fueled by real innovation and is substantially changing the way we communicate. However, the hothouse atmosphere of easy capital, media attention, and user curiosity that stimulates creativity will not be sustained indefinitely. All players therefore must develop a two-pronged strategy in order to survive the extremes of heat and eventual chill that this market will undergo.
   A value chain is emerging

   The business of creating a social network and providing the infrastructure on which it runs are beginning to separate. Firms are bringing not just social networks, but social networking platforms to the market. Specialists are becoming involved creating the ‘look and feel’ of social networking sites for a broad range of clientele. This trend looks likely to continue, and so technology providers are advised to look for ways to support social networking services in the key areas of scalability and availability.

   Consolidation is inevitable

   Media properties, search firms and other commercial entities will look to lock down the new constellations of audiences brought together by social networking services. Market experimentation will continue as operators seek the optimal combination of features and functions, as well as more sustainable operational models. However, the sites themselves will not necessarily consolidate; special interest social networking services will continue to play a valuable role.

   As the market becomes more crowded, it will become harder for social networking sites to remain independent. Acquisition can solve scalability issues, improve content and search capabilities, and extend visibility and reach.

   <<-- – TCG

4. I meant to say that I couldn’t find a URL on the DM site. But they do have this

   – TCG

5. have u guys seen emarketer’s latest report on the subject: “Social Network Marketing: Where to Next?”

   From the exec summary: “The lead players, MySpace and Facebook, continue to perform strongly.They are set to account for 72% of all US online ad revenues in the category this year.The intense activity in the space will continue into 2008 and beyond, with hundreds of new social networking ventures competing for ad dollars. With this increased activity will also come increased scrutiny of the return on investment (ROI) of social network marketing— 2007 will be the year when marketers will demand results.”

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