Online socializing in the downturn

I was surfing Alexa and Compete to see how the recent economic downturn (that we are not calling a recession) has impacted traffic to the popular social sites and saw some interesting trends.

Orkut traffic has gone down 36% over the last year while Friendster has lost over 20%. Unlike the latter, Friendster seems to inching upwards but Alexa shows traffic for Orkut  plunging over the last year. It’s interesting that neither of these sites has a major following in the U.S., Orkut’s traffic is mostly from Latin America, with Brazil accounting for over 50% of the traffic, while Friendster’s domain is Asia.

Friendster has been actively courting the Facebook developer community as well as expanding its  text alert  feature to several Asian countries, which no doubt helps increase site engagement. Orkut team on the other hand, recently introduced Orkut for iPhone but it’s not clear how many among its target audience use iPhone. Also, the site hadn’t opened access to third-party apps until this year to users outside Brazil and Asia (and Estonia??), which limited the possibility of engaging new users outside of the select countries.

Looking at the two dominant players in the N.American market, Facebook still seems to be going gangbusters with 70% YOY growth, thanks to a combination of user-friendly interface and new engaging features, while growth for the chaotic MySpace is leveling off.

I would assume that more people are socializing online during these interesting times, probably because there are more topics/issues to socialize over and thanks to the flurry of layoffs recently, more time on their hands to devote to it.

How many social networking sites do we need?

T-mobile’s Fav 5 campaign got me thinking about how many is too many? I think most people would agree that there’s an optimal number for everything. So the question begs to be answered, how many social sites does the online world really need?

Take credit cards, we all have a few but how many do you use most frequently? With the travel industry, you have your loyalty program once you get into one, you’re more likely to continue to use the same brand to rack up the points.

Let’s take a look at email accounts, most folks usually have a couple, one at work, another personal, one for perhaps your business, and maybe just one more super-secret, that no one, not even your significant other knows about..except the spammers, of course, there’s no escaping those  @@%%$$  but it’s usually in the range of 4 or 5 accounts. (unless of course, you have multiple personality syndrome combined with OCD and you feel compelled to email everyone with a different id. I know you folks are out there)

But my point is that there’s a magic number beyond which there’s no incremental value to having an additional card or email account, because chances are you will never get around to using it.

My pet peeve is the insane proliferation of social networking sites. Every other day, I get an invite to join some new social network or ‘community’ network because someone I know is on it. So now I have accounts on every possible social site in cyberspace and beyond. But how many do I actually visit regularly, meaning every day or at least once a week?! Maybe 4 or 5, at the most. Facebook’s clean interface won over MySpace’s chaotic design, I peruse LinkedIn every so often, for friends and family in Asia, there’s Orkut, and Twitter’s my all-time favorite choice for social-fun-about-nothing, but that’s probably about it. Law of finite time gets in the way of having too much ’socialization’.

I think it’s time, those who are thinking of starting a new social network or a community site should take a long hard look at their value proposition. At some point, acquisition is no longer that important, once you’ve signed up everyone from here to Kalamazoo (where ever that is). I’ve blogged before on the importance of user engagement. It doesn’t take much effort to sign up for a free account, but it’s far more difficult to stay engaged on multiple sites. There are so many choices out there and only so many hours in a day, even if you are an unemployed teen drop-out in the middle-of-nowhere-small-town-USA.

But despite my gloom-and-doom pronouncements, all is not lost. It does not mean the new social networks can’t win against the "incumbent" (it’s an election year, in case you haven’t noticed ). Facebook did it and so can your site. The key is to find your niche and grow that niche like crazy. However, it’s highly improbably (although not impossible) to pull users away from a site they’ve grown to like and replace it with your site unless you have some fiercely compelling value or offering. If you’re an aspiring new site, good luck to ya, it’s a long hard road ahead.