Year in Review: Social networks come of age
By the numbers, it's easy to say 2009 was the year social networking went mainstream. After all, if Facebook were a country, it would be the world's third most populated, behind China and India. — But the numbers only begin to show how social networks …
Context & Ripple Effects
Two years after Scripting News framed 2007 as the breakout year for social networks, and just after late-2007 commentary wrote Facebook off as stale heading into 2008 (Guardian), the Chronicle closes the decade's turn by declaring the category mainstream: Facebook's 350 million members collectively spend 10 billion minutes on the site every day, a user base the piece notes would rank as the world's third most populated country behind China and India.
The money is finally catching up to the audience. eMarketer, which in 2007 sketched out the advertising case for social networks, now projects Facebook will overtake MySpace in worldwide ad revenues in 2010 — $605 million versus $385 million — while Facebook itself is expanding Palo Alto staffing again and has consolidated into a former Hewlett-Packard manufacturing building near Stanford.
First-order effects
- Advertisers enter 2010 with a clear budget signal: eMarketer projects $605 million flowing to Facebook versus $385 million to MySpace, putting the younger network ahead of its established rival on ad spend for the first time.
- Facebook's own footprint scales with its membership — repeated Palo Alto office expansions and the move into the former HP site near Stanford track the headcount required to serve 350 million users logging 10 billion daily minutes.
Second-order effects
- MySpace is forced onto the defensive: ceding the ad-revenue lead puts pressure on the older network to justify its rates against a rival whose audience size now speaks for itself to brand buyers.
- Web services outside social networking face pressure to plug into these graphs, extending the 2008 thesis that search would transform social networking — the traffic now runs both directions, with social data feeding back into how the wider web organizes information.
Third-order effects
- If ad dollars keep following audience share rather than pageviews, social networking consolidates around a handful of scaled platforms, with engagement time — not clicks — becoming the currency media planners buy.
- At this scale a social network stops being a website and becomes default communications infrastructure, meaning product and privacy decisions made in Menlo Park carry consequences for a population larger than every country except China and India.
The trend: Social networking is completing its shift from early-adopter novelty to mass-market default medium, with advertising revenue and physical infrastructure now scaling behind user attention.