The interesting thing about social networks, like other forms of social media, is that users create the content. A social network becomes more valuable as more users join and get connected with other users. This is known as network effects.
It is not necessarily the best social network that wins — in terms of architecture, design, and features — but the one that owns the majority of users. In other words, if all my friends are using a particular social network, that’s the one I’m going to use, because if I switch to another one, even if it has better service, who am I going to talk to? This is a trend that is also found among e-mail and instant messenger usage.
Some social content sites, such as YouTube and Digg, have added social networking features. While both social networks and social content are under the social media umbrella, convergence between the mediums is becoming increasingly common. The definition of a social network is becoming blurred.
The social network rankings globally are:
The social network rankings for the United States are:
There are additional, popular contenders, but their rankings are difficult to determine:
Some new contenders are aesthetically pleasing, but have not gained widespread market share:
There are thousands of existing social networks and new ones are being created everyday. How does one succeed in this market?
How several of the leading social networks initially won their global audience:
- MySpace won because it appealed to musicians and budding artists. Win over the bands and you have also gained their fan base. Good move. MySpace is far and away the leader in the music scene. MySpace has also branched out into classifieds, comedy, events, film, forums, video, and everything else under the sun.
- Orkut won using Google’s brand name. Many people don’t realize that Orkut is doing so well in the global market. To continue gaining share Orkut needs to capitalize on Google’s back-end advantages — such as Google File System, BigTable, Chubby, MapReduce — and web applications — such as Google GMail, Calendar, Maps, Talk.
- Friendster won because it was the first major social network and enjoyed first-mover advantage. While it faded for a time, it has recently begun a resurgence due to a cleaner and faster user-interface.
- Facebook won because they began seeding their user base in schools. Schools are habitats for viral marketing. Words spreads quickly. Later, they opened up their service to everyone. Currently, it has the leading social graph among social networks. To continue gaining share, Facebook needs to better integrate with media such as music and video.
Who is going to remain king of the mountain? Who are the up-and-coming challengers?
Right now, MySpace is the king. Orkut and Facebook, which remain far in the distance, are the social networks that are rapidly gaining. Remember, Friendster was the market leader not too long ago, but was quickly overtaken by MySpace.
Friendster relinquished their lead because their software was not architecturally sound or highly scalable. Users had to wait for long periods of time (between clicks) as they waited for Friendster’s servers to react. Additionally, Friendster would be shutdown almost daily as issues had to be fixed. Momentum and the fickleness of users play a large role in who remains the market leader. As Friendster’s multitude of issues rendered their service unusable, MySpace came along and crushed them.
MySpace has always had architectural and performance issues — reminiscent of Friendster. However, with such a sizable advantage, MySpace will have some time to adjust to its competition and their new features. Unless, MySpace remains flat-footed and does not address their architectural and performance issues, it should have no problems retaining their lead for a foreseeable time.
Why are social networks so valuable?
Why do grocery and department stores have club membership cards? They determine your shopping habits. They provide demographical data for each customer and for each region. This data is mined to determine what is optimal for your shopping experience and for their pocketbooks. The same type of thing is happening with social networks. That is why they are still being harvested by companies.
Remember the social graph? Google has a partnership with MySpace and owns Orkut. They also have multiple social networks in the works, such as Socialstream. Google continues to build on its social graph, for data mining purposes, from these social networks. Microsoft has partnered with Facebook. Yahoo has partnered with Bebo. All three companies — Google, Yahoo, Microsoft — know the importance of the data the social networks hold. These advertising brokerage and search engine companies see that with so many social network users, and increasingly more time spent on computers than television, that a social network can greatly influence consumer purchasing decisions. Thus, not only is social networking being blurred with social content sites, but now also with search engines.
Along with that, social network users generate their own content and connect to each other. Users define what they want to talk about, see, and hear. This is different than traditional media such as radio, television, and print. Instead of the studio creating the content, users create their own content. Thus, social networks have low overhead and can be highly lucrative.
According to this source, social networks are already a $6.5 billion a year industry.
What is the next killer application for the social network?
Interoperability. Just like we can call each other on different cell phone carriers or e-mail each other even though we have differing e-mail services, interoperability will allow communication between different social networks. This move will be highly disruptive, but beneficial to all users.
Do you need a niche to succeed in the social network market?
I don’t think so. I think it’s nice to have niche features. But they are not necessary. If you have good design, features, ease-of-use, and provide users with some freedom, the users will come. You can always add new features later.
If it is so difficult to succeed in this market, then why are new social networks still being created? And why are so many of them in the same niche market and still succeeding?
Note: Here’s a list of the most popular social networking websites. Read the list with caution. The user count is highly speculative, as each site may count their users differently. Counting unique users is difficult. Also, we need to factor in whether the user accounts are active accounts or left for dead. While MySpace lists 200 million users, others believe that it has around 80m unique users. Another way is to factor in total number of visits. But what is a visit? Some social networks allow a user to login indefinitely, while others automatically logout a user after 30 minutes. Thus, requiring users to re-login and increasing the total visitor count. Another way to factor in which sites are most popular is the total number of page views. Again, numbers can be deceiving.
While the battle carries on, and challengers try to unseat MySpace, one thing is certain, social networks have changed the way we interact and do business.
Which social networks do you like best? Send us your comments below.