Q 46Q 46
Not long ago, it seemed that four companies would forever dominate the web in traffic and ad dollars. Each of the Big Four-Google, Yahoo!, Microsoft's MSN, and Time Warner's AOL-attracts more than 100 million unique visitors a month. Collectively the group accounts for roughly 90 percent of gross ad dollars online. But now those companies are facing a threat to their dominance. Today's massive social networking systems are rapidly becoming webs within the web-one-stop shops for a wide range of services (from content to communications to commerce) that were once the unique province of the Big Four.
Facebook, Myspace, LinkedIn, and other social-networking sites have been the rage of the tech industry lately. Following investments by Microsoft, News Corp. and Goldman Sachs, the companies are valued in the billions of dollars and are considered blueprints for how to build a website. Facebook has become the web's largest social network as measured by active users, which offers bread-and-butter portal services like email and instant messaging as well as photo posting and video sharing. In addition, Facebook has partnered with Amazon.com to produce a shopping application that lets users buy items at Amazon without leaving Facebook's site, while using opt-in "news feeds" that broadcast activities on Amazon, such as product reviews and wish list updates, to Facebook friends. Additionally, Facebook now uses a chat feature that automatically populates itself with a user's Facebook "friends," that may render older instant messaging services, such as AOL's AIM, defunct.
Jumping on the wireless apps mega-trend, Facebook uses mobile alerts to deliver mobile services for traditional styled cell phones and more intelligent smartphones. Applications for popular devices, such as the iPhone or BlackBerry, deliver even richer social experiences. Video has taken off, too, with 45 million clips uploaded on Facebook including higher- resolution video formats allowing Facebook users to send video messages from the site and from mobiles devices.
Launched in 2003, Myspace became one of the most visited websites in the world within a few years. With almost a billion visits per month, Myspace is considered the most popular social network (by traffic volume). The site was originally started by musicians as a tool to help users discover new music and engage with bands. Today, Myspace members leverage the service to discover people with similar tastes or experiences. Utilizing a system of adding friends to your network, the ability to customize your profile, write blog entries, play favorite MP3 tracks, join groups and enter discussions, Myspace allows users to interact in a way unparalleled before its emergence. However, the most compelling reason to join Myspace is for fun. There are many avenues toward entertainment on the social network including browsing through musician profiles and exploring areas dedicated to television shows or movies. But Myspace isn't just for fun, as many businesses maintain Myspace profiles in order to use the social media site as a form of marketing. For musicians, actors, authors, entrepreneurs, and others that maintain a public image, a Myspace profile can be a very important connection to fans.
Since it scored a $900 million, three-year deal with Google in 2006, Myspace has been profitable. And it has given News Corp. a nice turn on its $650 million acquisition in 2005. Myspace has recently formed partnerships with major record labels Sony BMG Music Entertainment, Warner Music Group, and Vivendi's Universal Music Group to offer its 117 million members tickets, ring tones, and artist merchandise. Driving a good chunk of sales is a project launched last summer called HyperTargeting, software that mines the profiles of Myspace users to deliver ads tailored to their interests. Hundreds of advertisers are part of the program, including Toyota and Taco Bell. Another income source is the sale of mobile ring tones and ads.
When it comes to enterprise collaboration and social software, LinkedIn rules the roost. LinkedIn is more effective at meeting the requirements of social computing the enterprise environment demands. With more than 30 million users representing 150 industries around the world, LinkedIn is a fast-growing professional networking site that allows members to create business contacts, search for jobs, and find potential clients. Individuals have the ability to create their own professional profile that can be viewed by others in their network, and also view the profiles of their own contacts. While Myspace and Facebook are tailored to keeping members in touch with friends and family, LinkedIn is perceived as being "more professional" for business users.
Social networking sites are also growing at exponential rates and attracting users of all ages. Facebook's fastest-growing segment is users over 25 years of age. LinkedIn, the business-oriented social networking site, claims more than 30 million active members with an average age of 41. The social networking websites are typically divided into three categories: general interest, niche sites with a specific theme, and international sites. The following are the top sites in these three categories:
Myspace: Started in 2003, Myspace was a driving force in popularizing social networking and still maintains the largest userbase.
Facebook: Founded by Mark Zuckerberg, Facebook was designed as a social networking site for Harvard students. After spreading from Harvard through the university ranks and down into high school, Facebook was opened to the public in 2006.
Hi5: A fast-growing social network with a strong base in Central America, Hi5 has more than 50 million users worldwide.
Ning: A social network for creating social networks, Ning takes the idea of groups to a whole new level.
Flixster: With a tagline of "stop watching bad movies," Flixster combines social networking with movie reviews.
Last.fm: Billing itself as a social music site, Last.fm allows members to create their own radio station that learns what the person likes and suggests new music based on those interests. In addition to this, you can listen to the radio stations of friends and other Last.fm members.
LinkedIn: A business-oriented social network, members invite people to be "connections" instead of "friends." LinkedIn is a contact management system as well as a social network, and has a question-and-answer section similar to Yahoo! Answers.
Xanga: A social blogging site that combines social networking elements with blogging. Members earn credits for participating in the site and can spend credits on various things such as buying mini-pictures to post in the comments of a friend's blog.
Badoo: Based in London, Badoo is one of the top social networking sites in Europe.
Migente: A social networking site targeted at Latin America.
Orkut: Originally created by Google to compete with Myspace and Facebook, it has mainly caught hold in Brazil.
Studivz: A German version of Facebook with a strong audience in students.
Corporate Use of Social Networking
Corporations and smaller businesses haven't embraced online business networks with nearly the same abandon as teens and college students who have flocked to social sites. Yet companies are steadily overcoming reservations and using the sites and related technology to craft potentially powerful business tools. Recruiters at Microsoft and Starbucks, for instance, troll online networks such as LinkedIn for potential job candidates. Goldman Sachs and Deloitte run their own online alumni networks for hiring back former workers (called boomerangs) and strengthening bonds with former alums. Maintaining such networks will be critical in industries like IT and health care that are likely to be plagued by worker shortages for years to come. Social networking can also be important for organizations like IBM, where some 42 percent of employees regularly work from home or client locations. IBM's social network makes it easier to locate employee expertise within the firm, organize virtual work groups, and communicate across large distances. As another example of corporate social networks, Reuters has rolled out Reuters Space, a private online community for financial professionals. Profile pages can also contain a personal blog and news feeds (from Reuters or external services). Every profile page is accessible to the entire Reuters Space community, but members can choose which personal details are available to whom. While IBM and Reuters have developed their own social network platforms, firms are increasingly turning to third-party vendors like SelectMinds (adopted by Deloitte, Dow Chemical, and Goldman Sachs) and LiveWorld (adopted by Intuit, eBay, the NBA, and Scientific American).
Are Facebook, Myspace, and LinkedIn using disruptive or sustaining technology to run their businesses