Will Facebook's Heat Make MySpace Meat?

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By every measure, Facebook is nipping at the heels of MySpace, the reigning champion of all things social media. Earlier this month, comScore reported that Facebook had seen a "flood of new users" after expanding its network beyond the college crowd last September.

According to comScore, Facebook had 26.6 million unique users in May, an 89 percent increase over the same time last year. Likewise, Nielsen//NetRatings also concluded that the social network had graduated to the big leagues, reporting a 110 percent spike in unique audience, from 7,898,000 in January last year to 16,547,000 this January.

Of course, MySpace grew as well, with a 30 percent jump in unique audience over the same time period. But if you're tracking momentum, it's Facebook's world.

While Facebook has become a Silicon Valley darling, it hasn't answered the most important question facing it: Will advertisers embrace the site in the same way they've touted the virtues of Rupert Murdoch's social-networking juggernaut? But to answer that question, one has to unlock the key to what makes a good social networking site.

Are you on Facebook?
Sitting in a recent iMedia staff meeting, our Editor in Chief Brad Berens asked the Culver City, Calif. office why he was suddenly getting so many Facebook friend requests. Exclamations from others in attendance indicated that Brad was not alone. Facebook, it seems, is everywhere these days.

In a nutshell, Facebook is hot. It's buzz-worthy. But for all of the love Silicon Valley wonks heap on the site, the heat might not mean much.

At the turn of the millennium, a site called Friendster was really hot, so hot that it made many of us still recovering from the dotcom bubble ignore the almighty question that troubles all great internet ideas: How will they monetize all that traffic?

The fact that I remember Friendster at all means I'm basically a digital dinosaur, but for many people around my age (29), Friendster was the first social networking site they joined. And in its amazing ascent and spectacular collapse, there is a lesson for would-be social networks and interactive marketers alike: Social networks aren't pure publishers. They are digital glue that people use to connect to each other, which means that how the site connects people and whether the site continues to be a meaningful way of connecting, people will determine the viability of it as an ad platform.

Unlike a static website or a TV program, it's not enough to have a large audience with a desirable demographic. The site has to actually work. 

Within a few weeks of signing up on Friendster, I reconnected with about 50 people I had lost touch with after graduating college, and I made some new friends, too. If there were ads, I don't remember them, but that wasn't the point of Friendster, which everyone thought was going to be the next big thing online. From a user perspective, Friendster did two things exceedingly well: It helped you find long lost friends, and it reminded you of important dates that you should've remembered but were too lazy to input into your Outlook calendar.

But then Friendster just vanished.

While I can't pinpoint the moment my friends and I migrated to MySpace, I can say that I don't even remember my Friendster password. The site, like so many other hot internet properties, simply fizzled.

Was MySpace all that better? Maybe. It let the users have more control over their pages, giving it a freedom-loving anarchic appeal that continues to this day. Friendster, by contrast, never got that. But the same could be said of Facebook, which has only now slowly started to open up the floodgates to allow extreme user self-expression.

But questions like how much room users should be allowed to personalize their pages are really just tactical considerations for the sites themselves. What matters for users initially and advertisers over time is that the site reaches a tipping point in terms of membership. While MySpace is probably there already, Facebook seems to be closing in on the mystery magic number that equals marketing gold.

The herd, self included, moved to MySpace because one day it just seemed like everyone you knew was on it. In fact, there are times when I think about quitting MySpace altogether, but then I realize that quitting MySpace (at this point in time) is tantamount to canceling my broadband connection and reverting back to dialup. Facebook certainly had that critical mass with the college crowd, but now that it's completely open, it's hunting for the same level of awareness MySpace seems to have wrestled away from Friendster.   

The challenges of life after college
When I spoke to Mike Murphy, Facebook's VP of media sales, for this article, one of the first things he asked was whether I had joined the site.

Sheepishly, I told him that I was a new member with only a handful of friends. When I asked him to give me a crash course in what makes Facebook unique, he hit me with some bad news. Facebook, he explained is actually a collection of about 50,000 smaller social networks, with each member belonging to several networks. My social network, with a pitiful number of friends, isn't really viable (yet) from a user perspective, nor is it enticing to an advertiser, either. But some of the larger networks on Facebook, the ones built by college students, the original pioneers of the site, are both enticing to advertisers and exciting for users.

The challenge for Facebook, according to technology blogger Mark Evans will be to assimilate new users like me while keeping the old guard happy in an increasingly ad-driven environment.

"What many people like about Facebook is it has a clean, easy-to-access look and feel," Evans wrote. "You login, you quickly see what's been happening in your world, and you do your thing. What happens when Facebook starts to introduce more advertising into the mix so it can start taking advantage of its billions of page views? Suddenly, the lean look disappears as the business model starts to move onto the scene."

Next: Facebook Ad.0



Keith Pape
Keith Pape July 31, 2007 at 5:33 PM

Hey Michael, You're making some great points - it's going to be interesting how this battle shapes up!

Matthew Haley
Matthew Haley July 27, 2007 at 11:20 AM

I won't deny that facebook is popular, especially for the high school / college crowd. But when I go see a band or hang out at a bar nobody ever says 'hey, hit me up on facebook.' I think there may be a false since of popularity based on 'growth' of new users. Here's why... Go to myspace and you can check it out and decide if you really want to sign up and use it. Therefore, those who sign up are likely to be people who actually come back and use it. Go to facebook and you have to sign up to even check it out. Then if you are like me and others I know, never go back to it. So facebook will get new people signing up, especially as they get more press, but not likely actual users.