Bebo & Ning: Second Place In Social Networks

Recent developments surrounding the world of  social networks are consistently pointing to a consolidation of social networks online.  Facebook currently touts over over 400 Million users.  It’s difficult to say how any users Twitter currently has.  The last numbers I saw were about 75 million, but I may be quoting an old stat.  Regardless,  these numbers trump Myspace and every other social network that has hit the web 2.0 scene.  On one hand, this is a story about the emergence of clear winners in the battle for clear market dominance.

The other half of this story is about social networks which are starting to falter, or admitting defeat.  Last week Ning announced that it was getting rid of free services and cutting 40% of it’s staff.  In even bigger new,  AOL has also announced that, two years after buying Bebo for $850 Million, the company will sell or shut down the site.  It’s becoming clear that a lot of second-tier networks are losing their user base and becoming ghost towns.

The emergence of a winner may have been inevitable.  However, I don’t have any interest in criticizing AOL for their acquisition of Bebo.  At the time of this transaction (2008),  social networks were still anybody’ game;  I believe MySpace was just over 100 million users at the time, 25% of where Facebook currently stands. In the social networking world network effects are profound, but as recently as 2008 the space was shaping up to remain fragmented, pulling in users of like interests and/or demographics very much the way forum-based communities still do.  If you were trying to establish a social media presence,  a brand or person used to build profiles on Friendster, MyYearbook Bebo,  Myspace and others.  When I was still working with record labels on social media strategy, we used to recommend web ubiquity, putting a profile on as many as a dozen social networks.  It seems that’s all over for now.

The 2007 social network world was killed largely by the sheer volume of consumers that poured into Facebook.   400 million active accounts is pretty much everyone when we’re talking about a place to put profiles.   But I’m not sure the world was a better place with the fragmented network system that we had before (the world of MySpace, Facebook, Bebo, NING, MyYearbook, Friendster, etc.). Yes, there were more choices and less restrictions for users, but all of these options are free for individuals so there’s not a price problem for consumers.  I think this presents some challenges for advertisers and I think this presents some serious challenges for developers.  Everything is platform dependent now and I’m not convinced that this is a good thing when it comes to Facebook.    Every time you get a clear market leader like Facebook, consumers and suppliers lose choice and the world becomes (just a little) less interesting.

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