Social-networking is impacting search related advertising as millions flock to sites such as MySpace.com and Facebook.com. They have huge appeal, particularly - but not exclusively - amongst younger web users, and are now up there with the Big Five in terms of search traffic volumes. This has Wall Street taking note as it impacts the $14 billion online advertising business.
MySpace is currently in sixth place behind Google, Yahoo!, MSN, AOL and Ask and, while they're still comparatively tiny in terms of percentage, the fact that they're climbing the rankings ladder so rapidly has the industry questioning whether we're looking at the portals of the future.
For those of you who are still unfamiliar - and let's face it: you can't be blamed considering the lightning speed at which the industry grows - social-networking is the term that's been given to online interaction whether it be through sharing photos, videos, blogs, e-mail or instant messaging. MySpace.com has the majority of these facets covered and as a result has seen impressive visitor growth of approximately 250 percent in the last year.
The Big three haven't been idle either with all their social-networking sites seeing substantial growth in visitor figures. Google's social-networking brands are Orkut and Blogger, Microsoft has MSN Spaces now rebranded as Windows Live Spaces and Yahoo! has the innovatively named Yahoo! 360 which launched in March 2005.
Google, as ever, was at the forefront of this online revolution when it introduced Orkut in January 2004 on an invitation-only basis. Since then it has seen its growth pale alongside other brands, possibly because it doesn't include blogging or video and requires users to use Google Accounts to sign in. Google also owns Blogger.com, which it bought in February 2003, but this has yet to be turned into a true social networking site. Observers believe that Google is happy to concentrate on its core $6 billion search and advertising business, at least for now anyway.
Meanwhile their competitors are using social networking to gain tactical advantage. Microsoft sees social software as a shortcut in the search race. Moz Hussain, Group Product Manager at MSN Spaces, has stated that by incorporating social features into its sites the company is driving consumer loyalty and ad revenue. On his blog he observes:
"I think there are two prevailing models for social networking today. One is the 'wild west' approach where everyone is your friend. MySpace has become the icon of this model although others have tried it. The other is an affinity based network, based on a common trait such as your college. Facebook is the classic example of this. For Windows Live Spaces, we are taking a different tack. Our strength is really about the relationships users already have within the network, particularly through Messenger. Spaces social networking is optimized for you to meet friends of your friends, or your real friends. It is much more personal and allows you to expand relationships the way people do in the real world, through common interests and existing trusted relationships. You can still meet random people and that's a valid use of Spaces, but we are optimized for real friends."
This approach seems to be working for MSN Spaces as it has become the world's most popular social network. While many have written off social-networking as a fad the fact that portals such as Microsoft and Yahoo! are jumping onboard proves there are huge benefits to search related advertising.
