Facebook v/s Myspace; Who has Tamed The Real market?
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Last week, according to Comscore reports (Techcrunch reports), Facebook had officially caught up with Myspace by April 2008. Both services are attracting around 115 million people to their respective sites each month.
Though one thing to be noted here is that Myspace is still much favored a brand in the US. MySpace still dominates the social network scenario in the U.S. market, with 72 million monthly uniques. Facebook has 36 million monthly uniques which are up from 23 million a year ago.
Facebook added 75 million monthly uniques over the last twelve month but just 13 million of those visitors are located in the U.S. MySpace added 5 million U.S. unique visitors during that period - at this rate it will take more than 4 years for Facebook to catch up to MySpace in the U.S. market. Obviously, Myspace will not sit back and lose its share of
“The Gold mine” (the U.S Social media space). According to Alexa, Facebook is rated 5th in the US (as compared to Myspace which ranks 3rd) constituting 39% of its traffic, though there are many countries where Facebook is still No. 1 traffic vise but still those only constitute 2-3 % of its user base share, therby confirming the fact of having a high U.S traffic.
So, why is the U.S market so important and taming, or even retaining, it is so important as compared to having a global footprint?
This is majorly because of two reasons :
1. US is the Trend Setter -
The United States is obviously the trend setter. Most of the newer Web 2.0 startups have an American style of content and users. Take Digg or Twitter for an example. Social Networking’s future lies in integrating these platforms , combining them and providing one unified platform to the users. Though Facebook has taken many innovative steps , to get maximum user base , it has still not struck chord with mindset , preferences of U.S visitors . Still U.S is the driver of how the world sees the web. Even my last blog mentioned that even to Digg Indian , Think American. Any social network that works better with “the driver user base” is obviously positioned better to take on world market as well.
2. Geographical Focus = better Advertising ROI
All the major advertisers would agree that inorder to attract more ROI or the conversion rate , its very important to have geographical focus.
Consider that if you wre shown banners of a U.S travel portal here in India, it is obviously not going to be useful. Myspace in this regard can think the American way and just has to focus how it has to cater the U.S market. On the other hand Facebook with the same number of users will have to understand individual locations and the need of that location for a successful program.this means more resources and thus more headache for facebook Ad employees.( Though their Customisable Ad network has solved their problem to some extent).
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Hi Sahel,
I beg to disagree on couple of points that you have outlined. Traditional marketing principles elaborate on something called as an FMA (first mover advantage), myspace was the first and foremost initiatives in the social networking media space, thus they enjoy high unaided salience (thereby leading to a domino effect)and higher unique visitors per month. To say that facebook hasnt been able to entrench the US market, wouldnt be appropriate at this point in time. I have always compared social networking sites to cellphones, its like having a ‘unique number’ and the entire friend circle on a particular platform. There are always behavioural implications in moving / changing platform (changing number if I move from airtel to virgin, and therefore even if they are offering money back on incoming calls - I will find it difficult to move because I will have to put in ‘loads of efforts’ in sharing my new number with everyone!). An almost similar scenario is faced by social networking site. If I have all my group on myspace, I will have to move all of them to facebook, now thats a real challenge. So although a facebook might be offering more number of applications, pure product benefit wont allow me to switch, since there are other behavioural costs involved, and as a consumer I dont see payoff being more than the cost involved at this point in time!
I think from a business perspective, the challenge that the likes of myspace, facebook, orkut etc are facing is identifying the revenue channels - it simply cant be just online advertising. My understanding and study of these sites lead me to conclude that we will see these sites moving up the value chain and becoming a modified version of - e-bay, classifieds and social networking (thereby allowing friends to interact, sell stuff and search for listings).