MySpace May Still Dominate in the U.S., But (Surprise!) Facebook is Catching Up Fast Worldwide

Here’s a little anti-spin on the Hitwise numbers that just came out showing that MySpace still rules social networking in the U.S. (See Duncan’s earlier post). Hitwise says that MySpace commands a 72 percent market share of visits to the top ten social networking sites, while Facebook has only gained a 16 percent market share. I find the way Hitwise discloses its data to be confusing—72 percent of what exactly? Why don’t they just tell us how many people they think visited the site? We can do our own math.

Any way you slice it, the numbers are surprising. Isn’t Facebook supposed to be on a rocket ride? So I decided to look at what comScore has to say on the matter of MySpace versus Facebook (not that they are perfect, but at least they give an actual estimate of how many people they think visited a particular site).

The numbers on comScore corroborate that Facebook is still lagging MySpace, but not by as much as Hitwise would have you think. In December, comScore reports that MySpace had 69 million unique visitors compared to 35 million for Facebook. That would give Facebook about half the market share of MySpace, not one fifth.

Maybe by”visits,” Hitwise means page views. Again, the comScore numbers confirm that MySpace is trouncing Facebook in the U.S. with 38 billion page views in December 2007, versus 13 billion for Facebook. Even so, that gives Facebook a third as much “market share” as MySpace. Of course, Hitwise data and comScore data are apples and oranges because they’ve been collected using different methods and different sources. I offer this more as a gut check.

Regardless of what data better reflects who is winning the social-networking race in the U.S., the real story is happening elsewhere. A peak at the global comScore numbers (as of November 2007) produces this doozy: Facebook has nearly caught up to MySpace with 93 million unique visitors worldwide versus MySpace’s 105 million. And in minutes spent on the site, it has actually surpassed MySpace with 21 billion minutes for Facebook versus 17 billion minutes for MySpace. (Although, it is still lagging in page views, 42 billion to 48 billion). The Web is a global game, and MySpace might be about to lose it.

Link to TechCrunch Article

Smiles, Everyone

Online hookup site MySpace is beginning to look a lot less like Facebook and a lot more like MTV.

The show writes itself. four cute girls fresh out of college move into an apartment in Los Angeles. In one episode a leggy brunette, Peyton, walks in on Violet while she's in her lacy underwear. Another time Violet rubs on lotion and takes a bubble bath. Later in the season Peyton makes out with a guy on the couch in front of her friends.

This is Roommates, a new faux reality show that is getting heavy promotion on MySpace. It has the distinction of being the first series conceived by, and exclusively for, the social networking Web site. Episodes are only three minutes. Plot is mostly nonexistent, and it seems to be a ripoff of MTV's The Hills, another show about young women living a reality-nonreality conundrum in L.A.

MySpace says Roommates is a hit, but that depends how you define "is" and "hit." The series' 19 shows have garnered a combined 3.7 million views, about half of what Katie Couric gets in one night. A typical YouTube hit gets 1 million views.

Hit or not, Roommates is making some waves for MySpace, owned by News Corp. (nyse: NWS - news - people ) MySpace is still the biggest in the business, with 72 million unique visitors in the U.S. in October, according to ComScore (nasdaq: SCOR - news - people ). Its home page is one of the most valuable on the Web, with 130 million page views each day, says MySpace. MySpace has been a great investment for Rupert Murdoch since his News Corp. swooped in with a $650 million deal for Intermix, the former parent of MySpace. This year MySpace is expected to earn News Corp. $200 million to $300 million before interest and taxes on $800 million in revenue.

But MySpace's user growth is slowing, those who go there are spending less time per visit, and rival networks such as Facebook are rising fast. And try as MySpace might to dominate Internet video, YouTube has pretty much walked off with the business (see chart).

"Everyone thinks YouTube is taking over TV on the Internet, but we had 51 million unique streamers [in June]," says MySpace Chief Christopher DeWolfe. But by September, that figure fell to 38 million. With growth slowing, DeWolfe is having to get creative--and that means going Hollywood and making his own content. "We have done dozens of new deals with Sony (nyse: SNE - news - people ), Fox, NBC, the NBA and the NHL, and now we have our own content," he says. He sees Internet video becoming one of MySpace's primary revenue streams.

Social networks were supposed to be anti-Big Media, created by and for other members. And while most of what's on MySpace continues to be of the babies-eating-dog-food genre, it turns out that this isn't worth much to advertisers, nor are the couple hundred million member-profile pages plastered with photos of people showing off their abs. "Brands like P&G do not want to advertise on Web pages that have 14-year-old girls kissing each other," says Jared Pobre of Ideal Exposure, an ad firm in Irvine, Calif.

But show a commercial before or during a professionally produced video and you can bring in as much as $60 per thousand visitors in ad revenue. MySpace has aired a teen drama series from Michael Eisner's Web production company, edited-down versions of retro TV shows such as Starsky & Hutch and in November debuted Quarterlife, a prime-time-quality drama series.

YouTube and Facebook have avoided spending money on original content and instead stick to letting their users and other producers make stuff for them. Previous attempts by Internet companies to become production houses--even when run by former TV executives--have failed. In early 2005 Yahoo (nasdaq: YHOO - news - people ) Media Group announced big plans to produce its own shows for the Web, to be spearheaded by former ABC Entertainment Television Group chairman Lloyd Braun. But Braun left under a cloud in late 2006, and Yahoo now produces almost no original content.

MySpace TV General Manager Jeffrey Berman insists he will not suffer the same fate: His bets are small, and he always tries to line up a sponsor first. "We're not going to do this if it means throwing millions of dollars down a hole," he says.

Online shows like Roommates can be made for $3,000. Per minute, that comes to 1% to 2% of what producers spend making prime-time shows for broadcast networks. MySpace is financing the 45 episodes, which are being made by Iron Sink Media, a producer in L.A. The show was profitable before the cameras rolled, thanks to an estimated $500,000 sponsorship from Ford. In one episode Sigourney buys a new car. Guess which brand? Viewers like girls more than ads. The episode in which Sigourney test-drives her Ford Focus has had 47,000 views so far. "The Exhibitionist," which features a half-naked girl, has had a million plays.

A year ago MySpace was unsure how to make money on its vault of videos. That changed in April when MySpace aired Prom Queen, an 80-episode (each a minute and a half) teen drama by Michael Eisner's new-media studio, Vuguru. The episodes, which aired on multiple sites, brought in an average 200,000 views apiece. Eisner's team sold product placements, proving that there was a way to make money advertising in online videos. A spinoff aired this summer.

MySpace TV became an official division in June under Berman, a former public defender from the D.C. suburbs. He has hired a handful of people from the TV industry, including folks from CNN, HBO and Scott Rudin Productions. They've already signed content deals with some veteran producers. MySpace distributes Sony's Minisode Network, which offers pared-down versions of old shows like Fantasy Island and What's Happening!! Honda (nyse: HMC - news - people ) is the sponsor.

Quarterlife is a show about coming of age in the blog era, by Marshall Herskovitz and Edward Zwick, the duo that created TV classics Thirtysomething and My So-Called Life. Herskovitz and Zwick, who originally conceived the show for prime-time TV, put up at least $50,000 to shoot each eight-minute episode. MySpace gets to run it exclusively for the first 24 hours. Then it gets syndicated to quarterlife.com and a week later to multiple sites, including YouTube, Facebook and Imeem.

Berman would rather keep the content on his site and grab more of the ad revenue. In MySpace's Artist on Artist, celebrity actors, musicians and filmmakers interview one another, coincidentally around the time they release a new record or movie, as was the case when The Darjeeling Limited director Wes Anderson and actor Owen Wilson did the show. The program, like many others, was conceived by MySpace's marketing department and leaves a subtle "I think I've just been advertised to" aftertaste.

MySpace has also put on 100 free concerts, called Secret Shows. Dates and locations are shared only with "friends" of Secret Shows. Headlining bands have included the Killers and Gnarls Barkley. Secret Shows spawned a similar program for comedians called Secret Stand-Up. MySpace also streams live concerts on its site and has its own record label.

Social networking sites have worries other media companies do not, like trying to avoid their association in the public's mind with perverts. In September MySpace arranged for starlet Amanda Bynes to appear at a free, MySpace-hosted screening of her new film, Sydney White. MySpace invited members who had "friended" MySpace's Black Curtain Screenings online. Bynes, 21, stood in front of the theater against a MySpace banner and fielded questions from the audience, which was filled with young girls and some older men who sat in the rear. One girl asked Bynes, who has MySpace pages for her movie and clothing line, if she also had a personal MySpace page. "No," said Bynes. "Why not?" asked the girl. "My parents won't let me. For security reasons. I don't want to get stalked." MySpace's marketers groaned.

MySpace cofounder Thomas Anderson is dismissive of the utilitarian approach taken by its faster-growing rival Facebook, which focuses on the software and leaves content creation to thousands of developers who've made popular games and other diversions that keep people coming back. "They want to be an operating system. We want to be fun and cool and relevant to culture," he says. Anderson is considering a number of new ventures, including offering an online invite service and helping MySpacers share reviews of restaurants and clubs.

It's too early to rule on MySpace's ability to dominate popular culture. Meanwhile, another episode of Roommates tapes at a nondescript house in L.A.'s Studio City, and Jeffrey Berman and his staff of mostly oh-so-cool kids in their 20s sit around a table in Beverly Hills, discussing a dozen ideas, including a dating show, a hidden camera show and a spoof on cop dramas.

Link to Forbes Article

MySpace Prepares Talib Kweli, M.I.A. Album Exclusives

MySpace is now pushing a number of high-profile streaming album exclusives, part of its growing music initiative. Starting this Friday, MySpace is offering an exclusive peek at the upcoming Talib Kweli album, Eardrum. The preview, at myspace.com/talibkweli, will last through the album release date of August 21st. Kweli (Blacksmith/Warner Bros.) has roughly 200,000 MySpace friends.

Also in the mix is M.I.A. (XL/Interscope), who is readying her second studio album, Kala. The Sri Lankan artist is now previewing the release on myspace.com/mia, though the action only lasts through Thursday. Additionally, MySpace is also featuring a preview from the New Young Ponys (Modular), a UK-based group that is now pushing their debut album in the United States.

MySpace now boasts a total band population of roughly three million. Previous album previews have come from the Black Eyed Peas, Weezer, Nine Inch Nails, Depeche Mode, Neil Diamond, Queens of the Stone Age, R.E.M. and Audioslave.

Link to Digital Music News Article

MySpace Leads U.S. Mobile Social Networking

by Tameka Kee, Wednesday, Aug 15, 2007 6:00 AM ET

MYSPACE EMERGED AS THE LEADER in mobile social networking in the U.S., with some 3.7 million monthly users in July according to M:Metrics. Facebook placed second, with 2 million, while YouTube rounded out the top three with just over 900,000. The mobile media measurement company, in its first report from a study of social networking via mobile phones, found that although some 7.5 million Americans accessed mobile social networking sites last month, they accounted for only 3.5% of all mobile subscribers. But according to Mark Donovan, senior analyst, M:Metrics, user adoption is set to grow, because "for an increasingly wide audience, social networking sites have become an indispensable part of the digital lifestyle." Indeed, sites like MySpace and Facebook have forged on-deck agreements with mobile service providers such as Helio, Verizon and AT&T, with the goal of increasing audience penetration--and analysts predict the demographics of mobile social network visitors will mimic those in the online space, expanding beyond teens and early adopters. "Nearly every online social networking site has added the ability to connect to these communities with a mobile phone," said Donovan. "With the mobile phone playing a central role in people's social lives, it's only natural that social networking sites are working to bridge the gap between the online and mobile worlds." Compared to Western Europe, however, U.S. mobile subscribers are most apt to visit social networking sites on their handsets. M:Metrics studied mobile social network use in five countries (the U.K., France, Germany, Italy and Spain, in addition to the U.S.)--and while none topped the U.S. in use, Italians clearly had the social networking bug--as some 1.3 million users (or 2.8% of the subscriber population) visited a site like Bebo or MSN/Windows Live Spaces last month. The U.K. came in second with 1.1 million (2.5%)--followed by Spain, with 751,000 (2.3%), Germany (1.9%) and France (1.7%). In the U.K., MySpace garnered the most mobile users, but MSN was the social networking forum of choice for users in the other countries. Link to MediaPost Article

Web networking boom blasts into the workplace

LOS ANGELES (Reuters) - After years of socializing, Facebook and MySpace mean business. The sites, which started as a way to help people stay connected with friends, in the past year have begun catering to professionals, offering networking and advertising opportunities.

Some companies are embracing the trend, while others are trying to shut the Internet's virtual doors as firmly as possible.

Barbershop owners Erin Portman and her husband, Michael, of Austin, Texas, created a page on MySpace.com, the site owned by News Corp and especially popular with teens.

MySpace "friends" of Bird's Barbershop often post photos and comments about their haircuts on the music-filled MySpace page, with links back to their own personalized MySpace pages.

"We started collecting 'friends' before we were even open," Portman said. "I definitely think it has boosted our business." The shop now has more than 2,100 MySpace 'friends,' many of them customers.

MySpace rival Facebook.com, started up in 2004 and in 2006 opened registration to people with corporate e-mail addresses. Thousands of business networks and communities exist on the site among 32 million users, with much of the recent growth attributed to professionals.

Facebook says its fastest-growing demographic is people older than 25. It's chief executive is 23-year-old Mark Zuckerberg, who is also one of the founders.

While many businesses are using the sites, employees taking advantage of them during work hours are stirring up controversy.

More than two-thirds of London businesses have banned or limited employee access to the sites, says a straw poll commissioned by Britain's Evening Standard newspaper in July. The United States, the United Kingdom and Canada have the largest number of online networking users, according to Facebook.

Toronto prohibited its 40,000 municipal workers from using such Web pages three months ago, saying it distracts them.

"We want to ensure that city workers who are paid by the taxpayers are not wasting undue time on non work-related activities," said City of Toronto spokesman Brad Ross.

"NOT SAFE FOR WORK"

Many companies block inappropriate Web sites such as pornography from their computer servers. Some even monitor their employees' online activity.

Some networking sites allow users to post photos and videos, which may be deemed "NSFW" -- not safe for work -- on the Web.

But Jerald Jellison, a professor at the University of Southern California in Los Angeles, and an expert in change management and social relations, said companies should embrace networking.

"People who lead businesses are reluctant to acknowledge the extent to which hard-working professionals do other things besides strictly working," he said. "We're human beings. We socialize. It's going to go on whether you allow it or not."

People often meet other employees of their own firms through the sites, said Jellison, who argued that such connections could be used to share resources and increase productivity.

"If there is somebody who has experience dealing with clients in a particular company and I find someone else who has done business with this company, I could get information from him, which could help in terms of making a sale," he said.

International Business Machines Corp. has developed networking software designed for business clients to do just that.

"We tailor it to specifically help people organize their own activities," said IBM's Vice President of Emerging Technologies, Rod Smith. "The more you're isolated and not in the loop, it makes it tremendously hard to really define your work".

Link to Reuters Article

Yahoo to Add Video Component to Photo Site Flickr

In an effort to broaden the range of media available to internet users, Yahoo announced it would be adding a video component to its photo-sharing site Flickr.

GM Mike Folgner of Yahoo Video said the company is committed to building "a much better destination for you to access all this different content.''

A means to this end is to "put video everywhere you are on the Internet," with emphasis on Flickr, reports Bloomberg.

The move puts the photo-sharing site in the arena of Google's video-sharing offering Youtube. And while it is not expected to overtake Youtube, video remains a savory market, with 3/4 of US internet users streaming at least least 2.5 hours worth of video in May.

As of July, Flickr ranked the #2 photo site behind MySpace's PhotoBucket.

Link to Marketing VOX Article

Age-Verification Crackdown Looms for Social Media

Critics Say Laws to Block Access to Sites a 'Political Solution, not a Safety Solution'

By Jeremy Mullman

Published: July 30, 2007

CHICAGO (AdAge.com) -- Advocates of stricter identity-verification measures on social-networking sites got a boost last week when MySpace revealed it had deleted 29,000 registered sex offenders from its network, particularly in North Carolina, by far the furthest along of any state in attempting to legislate verification guidelines for social networks.

But critics say the North Carolina bill -- which requires minors to get parental permission to sign up -- illustrates the futility of trying to effectively verify who is online. "My son knows all my information, so there's nothing stopping him from signing on as me and giving himself permission to be on there," said Rick Lane, senior VP-government affairs for MySpace parent News Corp. "Verification is a political solution, not a safety solution."

The bill passed the North Carolina Senate by a 49-0 margin in May and figures to soon get a vote in the House. If it passes and Gov. Mike Easley decides to sign it, a lawsuit from one or all of the social networks -- and perhaps even from portals such as AOL, which has signaled its opposition -- is seen as inevitable.

Security questions
Providers have typically argued that adequate verification technology doesn't exist, and that imperfect verification would give minors a false sense of security.

While advocates such as North Carolina Attorney General Roy Cooper acknowledge that the technology is imperfect, they say the number of sex offenders already on MySpace makes not acting a worse option.

"It does give us more urgency," said Jay Chaudhuri, special counsel to Mr. Cooper. "It's illustrative of the potential harm that exists when you have predators mingling online with minors."

Mr. Chaudhuri said there are effective models of verification. He pointed to online tobacco sales in California, which require follow-up phone calls or postcards. He also cited the exhaustive methods used on most financial websites.

Negligible effect?
Some social-networking experts question whether gating online communities will do any harm. "I actually don't think it's something they should be afraid of," said Dave Gormley, chief product marketing officer for Tubes, which markets a tool that helps social-network users control who gets to view which information on their personal pages.

He said measures that increase privacy -- whether it's keeping personal information about a child from a potential predator or keeping weekend-in-Vegas photos from a would-be employer -- can enhance a user's experience on the site.

Link to AdAge Article

Facebook Proves Both Profitable And Desirable

by Gavin O'Malley, Monday, Jul 16, 2007 6:01 AM ET

WITH FACEBOOK AGAIN THE FOCUS of acquisition rumors--this time with Microsoft and Google in the suitor seat--observers are asking anew about the site's value. Well, the posh social network is profitable, will post a positive EBITA, and will do well over $100 million in revenue this year, according to Jim Breyer, managing partner of venture capital firm Accel Partners--one of Facebook's biggest investors along with Greylock Partners and Meritech Capital Partners. Breyer, also a Facebook board member, made those statements at the Fortune iMeme in San Francisco on Friday, as reported by Barron's Online and picked up by PaidContent. Referring to Facebook's precocious CEO Mark Zuckerberg, Breyer was reported to say: "In this case, neither of us wants to sell." "There are huge disadvantages right now around the hype," Breyer said, alluding to the intense pressure Facebook has been under ever since Yahoo emerged as a possible buyer last year. What could convince Facebook to sell? "Part of it is always price," Breyer admitted. Facebook has grown three times as fast as MySpace in the past year, according to Nielsen//NetRatings. Seeing a massive influx of first-timers, Facebook U.S. visitor numbers reached 26.6 million in May--up a full 89% year-over-year and 3.6 million more than in April, according to comScore. Worldwide, comScore reported, Facebook reached 47.2 million visitors in May--8.4 million more than in April, and with an average of 20.6 visits per user. According to major research companies, Facebook's fortunes will only improve as inventory on social sites switches from remnant ads provided by ad networks to more lucrative rich media and video ads. "Today, inventory on social sites is fulfilled largely through ad networks and contextual advertising, but as they mature, they will begin to use tactics such as behavioral targeting that allow for better monetization of their inventory," Jupiter Media analyst Emily Riley said in a recent report. Industrywide, eMarketer estimated earlier this year that social ad spending will reach $865 million this year, and grow to $2.2 billion in 2010. Still, just two months ago analysts and industry watchers went on record saying Facebook had missed the boat by failing to reach a reported $1 billion deal with Yahoo. "They're not going to see that kind of money again," Riley said at an industry event in May. "Boy, did [Zuckerberg] miss a big opportunity," mused David Rittenhouse, group planning director at neo@Ogilvy, at the same event. Link to MediaPost Article

MySpace Teens Begin Exodus to Facebook

MySpace is increasingly losing its teenage demographic to rival Facebook, reports the Associated Press on new stats from comScore.

Though MySpace still has a commanding lead over Facebook, US visitors under 18 have fallen 30 percent over the past year for MySpace, while Facebook's teenager population rose by two and a half times. Total, MySpace has 4.7 million users under 18, compared with 4.3 million for Facebook.

Both sites showed growth in all age groups. MySpace grew 35 percent to 70 million users, while Facebook doubled to 28 million.

Up until late 2005, Facebook was only available to college students, while MySpace has always been open to everyone over the age of 14.

Link to Marketing VOX Article

Social Networking Around the World

JULY 10, 2007 And social networking is biggest in... South Korea! About a fifth of adults have visited a social networking Web site, and an equal percentage of Internet users have done so in the past 30 days, according to a survey of several countries by Ipsos Insight. "The Face of the Web 2006" survey was conducted in November and December 2006 in urban Brazil, Canada, urban China, France, Germany, urban India, Japan, urban Mexico, urban Russia, South Korea, the UK and the US. Social networking was most popular in South Korea, with half of all adults there having visited at least one of these sites in the past, and over half having done so in the previous 30 days. The popularity of social networking in South Korea is driven by Cyworld. Three out of every 10 South Koreans have a Cyworld account. In comparison, roughly a quarter of Americans have ever visited a social networking Web site. In most of the countries surveyed, at least two-thirds of all Internet users that had visited social networking sites had done so within the past 30 days. A study by the UK Office of Communications with Synovate covered social networking use among broadband users in China and Japan, and European and US markets. Among adult Chinese broadband users, 80% had discussed hobbies or interests online via a social network, and 78% had used a social network to meet new people. Less than half of users in most other markets surveyed said they had used a social network for either of those purposes. eMarketer Senior Analyst Debra Aho Williamson says, "The year 2007 will determine whether a global social network strategy will make sense, or whether homegrown sites will win out. Two entities — MySpace and Windows Live Spaces — generate the lion's share of global visitors to social networking sites. But social networking is ramping up in a variety of markets." Link to eMarketer Article