June 11, 2008

Saturation of the social networking fad

There is a mad rush towards online social networking space. Every second person wants to get on the bandwagon with his own social networking website with a silly-sounding name. In my opinion, most of these sites are just a fad and are not built on strong fundamentals in terms of a) revenue sources and b) the problem they solve.

What is online networking, btw?

The purpose of a social networking website is to help you keep in touch with your existing contacts and to generate more contacts! In case of social networking, the contacts are friends or prospective friends, whereas In case of business networking, the contacts are business associates or prospective business associates.

Now, answer this question – How much time and money are you willing you spend to keep in touch with your: a) friends and b) business associates. It is important to know this fact. Online market may be different, but it is closely related to offline consumer behaviour. Online business model can help in extending the product composition with new innovation and format of delivery. It is important to know if people are willing to pay for a given convinience. And if they are not willing to pay for the convinience, what alternate source of revenue do we have?

So how do you keep in touch with your friends?

In real life, you spend nothing to keep in touch with your friends. You call them up when you want to hang out with them, you give them a shout on their mobile phones or drop in to kill some time! If you are tech-savvy and love to announce a great news, you send them emails. Why will you like to send a scrap to someone (when you can simply send a short email or catch up on various instant messengers)? And why will you like to create such huge volume of personal content and share with millions of people on the Internet who are not even known to me.

Though you may have build friendship /relationship on social networking websites, they are generally not for long. And the long ones actually use the social networking as only the contact point and then evolves and flourishes offline.

What about business associates?

However, business networking sites will keep evolving, since it adds value to businesses. It help people refer / recommend a vendor or buyer to other people in a networked environment as a recommendation network. It has been very successful, when it comes to executive search and generating new business.

Again, the formal nature of relationship and privicy factor makes business networking websites a great place to get connected and exchange notes.

So, the conclusion is:

So, as on today, given the trend, I can say that social networking is a fad, which is getting saturated and is not supported by a proper revenue model. Online advertising cannot be considered a decent revenue model for a site where people come to kill time! However business networking is here to stay. Corporate intranets having social communities may stay. 

I have already written the orbituary of Facebook, My Space, Bebo and social networking platforms. These are evolving as a fad and will vapourize in the same way in years to come. I wish these trillion dollar valuations to be true, but my mind says otherwise. And I am not the only person saying this. Steve Rubel of Micro Persuation feels the same way to a great extent (may be for different reasons).

What do you think? 

Filed under Business Strategy, My Favorite Posts, Technology, Usability by

Comments on Saturation of the social networking fad »

June 27, 2008

Jason Anderson @ 11:32 pm

I strongly disagree that "social networking" is a fad.

I agree that there is a major saturation of social network sites….and that will be considered a fad. But…
The major sites like Facebook, MySpace, Yahoo Groups, etc will not fade away. Just the notion that starting your own social networking site will.

However, there will still be a large number of sites like ning.com that will probably survive as well.

But, yeah, after a person signs up for 100 social networks…they are only going to visit 2 or 3 of them in the long run. It's the 2 or 3 top ones that will thrive and the rest will drop due to lack of interest.

April 8, 2009

Abhishek Rungta @ 3:17 am

Hi Jason,

I am not saying that online networking will not stay. But the networking sites which fail to fulfill a purpose will surely wont be there. I do not see many of them including Myspace and to some extent Facebook doing that. They will have to evolve to survive.

Abhishek

September 30, 2009

aditya @ 7:30 am

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aditya @ 11:30 am

For the first time in India, PMI is hosting a three day conference on Project management where distinguished speakers from all over the world are invited. Know more at PMI conference website.

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