• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • CommentGo Back
Download
 
 
 July 2008
byJennifer Simpson, Consumer Research Emerging Applications Senior Analyst,jsimpson@yankeegroup.com, 617-598-7310 Jennifer Simpson
© Copyright 2008. Yankee Group Research, Inc. All rights reserved.
Yankee Group published this content for the sole use of Yankee Group subscribers. It may not be duplicated, reproduced or retransmitted in whole or in part without the express permission of Yankee Group Prudential Tower, 800 Boylston St. 27th Floor, Boston, MA 02199. Phone: (617) 598-7200.Fax: (617) 598-7400. E-mail: info@yankeegroup.com. All rights reserved. All opinions and estimates herein constitute our judgment as of this dateand are subject to change without notice.
The Brief Wondrous Lives of SocialNetworks
The Bottom Line:
To keep audiences engaged, social networks must provide unique features and service to meet consumer needs, make distribution of content from and to the social networks easier, and maintain high degrees of privacy controls among users.
Key Concepts:
Social network, socialization of the web, developers, applications, monetization, users, accounts
Who Should Read:
Business strategists, marketing professionals, R&D
Practice Leader:Eileen Eastman, Chief Research Officer,eeastman@yankeegroup.com, 617-598-7281
Executive Summary 
The phenomenon of social networks’ explosive growth in 2006 and 2007 is evolving. The story is no longer about simply how to develop audiences, but how to maintain audiences, build revenue and make the web itself more social. With this, the myriad of companies and individuals expected to participate in social applicationdevelopment, application hosting and content development is set to explode. Yet Yankee Group foreseesaudience growth for social network participation leveling off during the next 5 years (see Exhibit 1).
Exhibit 1.User Growth Throughout North America Will Remain Relatively Flat During theNext 5 Years
Source: Yankee Group, 2008 
0102030405060708090
201220112010200920082007 CanadianUsers(in Millions)US Users(in Millions)
0102030405060708090100
NorthAmericanUsers(in Millions)
 
 
 
2
 
© Copyright 2008. Yankee Group Research, Inc. All rights reserved.
 
This Yankee Group Report looks at both the growth of social network users through 2012 and the growth of accounts held by usersfor the same time period. We must make an important distinction between users and accounts for the purposes of this Report:Although the number of unique users is an important measure of success for social networks, the number of accounts that eachunique user has is equally important. This forecast is pertinent to the large social networks, which do not focus on a specific audienceor segment but appeal generally to a wide audience.To date, social networks have benefited from media buzz and expanded availability to demographics beyond college kids (particularlyfor Facebook) to grow audience numbers. Although applications deployments have been able to expand the amount of time usersspend on social network sites and develop targeted advertising based on user preferences, applications alone have failed to drawsignificant new numbers of users to the networks.The largest challenge for social networks will be revenue generation from advertising. Equally important to consider are three key areas:the ability that social networks have and the steps that they (or partners such as Google) must take to support their developer community; building social functionality into third-party web sites (especially those of content providers or those providing onlinestorage capabilities); and taking appropriate measures to protect consumer privacy. Yet another struggle for social networks is creatinginnovative features and applications to meet the needs of restless consumers who are always looking for the next big thing online.This Report provides forecasted data for audience growth and account growth as well as a state of the union view of large consumer-oriented social networks in North America.
 
July 2008
 
© Copyright 2008. Yankee Group Research, Inc. All rights reserved.
3
 
Table of Contents
I.
 
Introduction··························································································································································· 4
 
In the Beginning There Was but One Social Network.................................................................................................................. 4
 
II.
 
How to Succeed in Business and Only Kind of Try······························································································· 5
 
Expanding Audiences............................................................................................................................................................................ 5
 
Growing and Supporting Developers Inhibitors of change......................................................................................................... 6
 
III.
 
Cutting Revenue Projections, Despite Audiences································································································ 7
 
Show Me the Money............................................................................................................................................................................. 7
 
IV.
 
Forecast Analysis···················································································································································· 8
 
Forecast Methodology......................................................................................................................................................................... 8
 
Forecast Analysis................................................................................................................................................................................... 9
 
Number of Users vs. Number of Accounts...................................................................................................................................... 10
 
Applications and the Cloak of Innovation....................................................................................................................................... 10
 
V.
 
Conclusions and Recommendations······················································································································ 11
 
Watch This Space: Social Media Will Remold the Web................................................................................................................ 11
 
Recommendations for Social Networks........................................................................................................................................... 12
 
Recommendation for Developers...................................................................................................................................................... 12
 
Recommendation for Enterprises and Brands................................................................................................................................ 12
 
VI.
 
Further Reading······················································································································································ 12
 
I.
 
Introduction
In the Beginning There Was but One Social Network
The web was a lot simpler in 2006 when Yankee Group first began to map out social networks, media and platform providers. The divisions of the social web were clear and distinct, with the interest and growth insocial networks (particularly MySpace) fueling interest in the phenomenon. Now, social features bothconnected to and completely separate from large social networks are spread across the web. These featuresenable users to pull content back into their social profiles and publish personal information from their  profiles on third-party content sites. They’ve also given consumers a plethora of options to choose from interms of which social networks they join.
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...