Facebook’s recent takeover of Friendfeed, a smaller rival in the social networking space, seems to have set off rumours of a round of blood letting in the online world. Facebook, which is the largest social networking site today with over 92 million unique visitors as per data from comScore, leads a pack of over 400 varied sites focused on different aspects of the social connectivity spectrum. Friendfeed was ranked 421 before it was taken over.
The last year or so has seen a surprising number of upheavals, with Friendfeed sacrificing US coverage to focus on the Asia Pacific region, where it is considered one of the leaders, to the emergence of Twitter as one of the leading people connectors in cyberspace. And one time leader Myspace is losing its prominence with the number of visitors dropping month after month.
Experts on the social networking phenomena argue there is a lot of scope for the sector to grow, but admit that before the next stage of growth, a number of players may be forced to abdicate. A round of consolidation, restructuring, and reinvention is very much on the cards. With awareness of the functionality of Social Networking sites no longer an issue, users have begun migrating to where most of their friends can be found, thus consolidating the presence of a few players in the space, while others fall by the wayside. The main reason for this is the lack of time. People can access only so many social networking sites in a day and hence would prefer to be spotted on those that give them the maximum visibility. Mercenary, but understandable. This is the prime reason why sites like Twitter and Facebook are growing at the expense of smaller ones.
Another aspect of the reinvention includes monetisation of their subscriber base. Experts feel it will be difficult to reinvent a social meeting place as a commercially viable entity and several sites would lose out on this changeover. The reinvention is likely to create large sites with multifunctional utility which are frequented by many, and complemented by niche sites which cater to specific needs of the select few. Both models can succeed if the objectives are clearly defined now, say experts.
Clearly, the focus on revenue generation will be a defining force in the current scenario. For example, Myspace, owned by Newscorp, claims Chairman Rupert Murdoch, is focussing itself on the entertainment niche, with increasing amount of unique content in video, music and online gaming. Almost all of its content is sponsor supported. This could be a broad model for the larger players to follow. The smaller ones may go the way of Linkedin which has thrived on the current recession through its focus on job searches and skill development.
The current shift in industry focus should be an interesting study on the evolving market dynamics of cyberspace.