social networking is not a business, it’s a feature

eyeball time: 2.5 minutes but you might read faster…)

apple's ping...a social network for music

the dea skinny on what’s happening:

the world has gone gaga over social networking, thinking its a business. yeah, we get facebook. but ask rupert murdoch who bought MySpace in 2008 (News Corp.) for $580 million if he would buy another. despite it’s “now uncool to use” factor, he bought a business that has fallen to the #3 position in the social networking word…with facebook, twitter and youtube fighting for the top position above MySpace. now comes google. and apple just released its iTunes-centroic social networking offering called “ping”…which is built into iTunes…and points to the future of social networking.

the stakes:

the undocumented “law of markets” says that once a market is stable, it generally can only support 3-4 major players. this “law” is wildly disputed but go with us on this. there are dozens of social networking sites attempting to be stand-alone businesses. we won’t waste time on listing them all or their issues…we have a white paper on that we can give you, “social networking 101″…what is important is how digital entertainment businesses approach this space. the value of any social networking business is not just in its revenue model (although these are still very unclear), it is how it leverages other content, context and platforms. and the sustainability of social networking as stand-alone businesses has not yet been established. remember stand alone email businesses when email network email started? where are they now? gone!

the dea takeaway:

social networking is not a business, it is a feature. the big established players will likely co-exist but most will die off or merge. our research shows that users tend to be fickle about social networking usage. when they first sign up, it is like a torrid weekend romantic fling. a few months later, neglected and hardly logged onto. plus age demographics play a huge role. younger facebook users, for example,we have found,  have dropped off in usage now that their parents have discovered it. 45% of facebook users are over the age 45 last time we checked! so the kids migrate from “cool” social network to the next new new thing. they started with friendster, went to MySpace, then facebook. they are registered on all still but use none of them very heavily as before (except that laggard/late-adapters). kids nomadically graze across social networks like buffalo once did on the great western plains of the united states. them’ days is over!

for more information, please contact us at 512.825.6866 to discuss the issues more fully and the specific impact & implications to your business. it’s free!