Abstract
2007 was the year that social networking became the norm for many Internet users, as initial strong growth pushed the user base into the multiple millions. But it was also the year that sounded warning bells for those who believe social networking represents the next frontier in online advertising revenues. A sobering slowdown in growth, combined with a more worrying drop in usage of social networking sites, has highlighted the significant challenges that the big established players, in particular, face in keeping users engaged.
This could well sway the odds in favour of some of the more specialised sites, who are able to focus on catering to the needs of different audiences. In the short term, all players will be aggressively developing new ways of making sites stickier (and more profitable) and forging new partnerships with third parties, ranging from mobile operators to application developers.
Table of Contents
- Key Messages
- Market development
- Social networking companies: tread carefully on valuations
- 2007 sees high growth... and a tailing off
- User engagement is on the decline
- Social networking becomes the norm
- Normal can also mean banal
- Social networking goes global
- Facebook versus MySpace: the draw of rich media
- Privacy and protection: key issues
- The importance of user control
- Who' s got my data?
- The fight for better protection
- Social networking 3.0: the shape of things to come
- The next big online opportunity?
- The fight for revenues will get tougher
- Can targeted advertising come to the rescue?
- A softer, more subtle approach
- New applications, new revenues?
- The mobile opportunity
- New audiences: getting closer to users
- The draw of higher security sites
- Special interest groups
- More value, more revenue opportunities
- Developing markets
Table of figures
- Figure 1: Social networking: total visitors December 2006- December 2007
- Figure 2: Average minutes per visitor: December 2006- December 2007
- Table 1: MySpace versus Facebook usage
- Table 2: Top online sites by genre where ads were placed, 18- 24 February 2008
- Table 3: Facebook demographic profile
