New social network players say don't call "game over" simply because MySpace and Facebook are pulling in about 70 per cent of the web traffic that's headed toward the top 57 social networking sites.
They are instead developing new strategies, have narrow customer focuses, and product twists to lure audiences and catch the eyes of business developers.
"Developers need to iterate and develop quickly," said Jeremiah Owyang, social networking analyst for Forrester Research. "There's no best practice or rule-of-thumb yet. There's room for anyone to come in and become a dominant network."
Even though they don't compete as social networking sites, there are also thousands of web applications, widgets, and communities vying for eyeballs, ad clicks, and screen turf. (One Web 2.0 directory listed 2,604 logos earlier this month, and Facebook alone claims 400,000 developers).
Like other early players, PeopleJam, Inc. (DEMOfall 08) had to quickly change and overcome users' resistance to joining yet-another social network.
The company "evolved in many ways we would not have predicted when we launched," said Matt Edelman, CEO, PeopleJam. "When we appeared at DEMO, and for the first several months, we pursued a rather classic definition of a new type of site - social media. We found over the first several months, from user feedback and users, that the idea of having another profile, another place for your identity beyond the main social networks, was becoming burdensome, users were feeling profile fatigue."
"We started to observe, not just with PeopleJam, but also with other social media sites trying to drive connectivity around content and around lifestyle interests, that we don't see any successes in the market," Edelman said. "So we began to evolve the business to drive a different type of value proposition which is much more in the category of being a social utility. We've developed to be a social utility for people interested in social improvement (launched Aug. 4) as a component of our site that will be layered on top of the social media."
Blogger Paul Gillin advises, "To survive, you've got to focus," advises blogger Paul Gillin, author of the upcoming book, Secrets of Social Media Marketing."Find customers who have attractive demographics. If there's one thing that the Web 2.0 experience should have taught us by now, it's all about targeted, small markets."
PeopleJam has a clear sense of its target audience: the personal development market, which, it says, "exceeds $11 billion annually and is growing at approximately 11 per cent per year, attracting an estimated 45 to 60 million adults with highly desirable purchasing power."
For some companies, it's not about building another social website, but creating products with social networking twists. "I wouldn't try to launch another social networking site," says Chris Anderson, CEO of Capzles (DEMO 08). "We are a tool with social networking aspects."
Later this month Capzles expects to announce musicians and other brands using Capzles, and, said Anderson, "We'll be offering a widget so you can make it look like part of your website, embed it on your blog, Facebook - like a YouTube video or a Flickr slideshow, but letting people pop it to full-screen."
"We're doing great, in terms of growth," Anderson states. "We're up over 1,000 per cent from the beta." Based on key metrics about engagement - how long people are staying on the site, and how many pieces of content or pages they look at, "We rank very high versus established sites."
Another social networking company evolving its strategy is YouChoose (DEMO 08), which started out focusing on causes and this fall plans on branching out to topics.
"On the member side, we've been doubling about every three months," said Mike Dever, YouChoose CEO. "We've got close to about half a million members across the social network groups. Some of the top brands will pay for placement on the channel, (or) for their own channel."
One example of a new social network twist is Diigo (DEMOfall 07), which started as a web annotation service, and re-launched in March as a knowledge-sharing community. Today, Diigo calls itself a "social bookmarking and annotation service, and, claims"almost a million users at present," said Diigo founder Wade Ren."We're not yet profitable, but we are generating revenues. We will becoming out with a full fee premium service soon."
Two-year-old Me.dium (DEMO 07) brings another twist to the social networking scene. Not claiming to be a social network, Me.dium recently launched Me.dium Social Search as a way of "gaining social information based on the activity of others," said David Mandell, co-founder and vice president of marketing.
"It's the first 'crowd powered search engine,' getting information based on what other people have been searching," Mandell said.
Survival comes down to generating revenue.
"Revenue continues to be a challenge," Gillin said. "The advertising model is the most popular, but not necessarily the most desirable. Ads combined with premium (or) gated members seem to be best."
PeopleJam's Edelman agrees. "I don't think you can be successful these days with less than two million unique visitors [sessions] per month," he said. "For a social media site depending on revenue from advertising, anything less won't be successful. And you don't start getting into powerful business models until you're well over five million uniques per month."
One important change, notes Gillin, is that the cost of launching a website and services is dramatically less than it was a few years ago."Companies don't need huge amounts of venture capital and ads to survive. Guy Kawasaki launched his Trumors website for $13,000, where five years ago it would have cost him about a half a million."
Will niche social network players survive?
"That's unknown," states Owyang. "If they can get a thriving community, advertisers come in and fund it. For example, 'communities around cars' have a great opportunity. We'll definitely see a shake-out."