I meant to post this article on the trend a few days back so, you know, here. Hey, topical!
Verne Kopytoff, Chronicle Staff Writer
chive/2004/02/09/BUGMD4RAMA1.DTL (Feb. 9 2004)
Jeremy Chipman's enthusiasm for Friendster, a Web site that allows users to keep in touch with friends, their friends' friends and beyond, tracks like a bell curve. Within a few months of signing up last year, he was logging on as often as three times a day to chat with a couple dozen friends and review his loose ties to thousands of others.</p>
But these days, Chipman is far less enthusiastic about Friendster. He visits the Web site once every few weeks, preferring to focus on his studies rather than gabbing.
"It was sort of fun at first -- you write glowing testimonials about friends, and then they write glowing testimonials about you," said Chipman, a graduate student at San Francisco State University. "Or you write or read funny items. But after a while, it became pointless."
Social networking, as the industry is called, has enjoyed phenomenal growth during the past year. Millions of Internet users have signed up with services such as Friendster, MeetUp and Tribe Networks, many of which are based in the Bay Area.
But the question remains whether the Web sites can keep users interested beyond the initial few months. After users link up with all their friends and browse their profiles -- then what?
It's a question that many social networking companies are only now addressing. Some are planning to add new features for dating, job hunting and business networking, activities that are already taking place more informally on the Web sites.
Online social networking is based on the idea that people prefer to meet others through friends. While common in the offline world, it has been difficult to achieve online, where anonymity is the norm.
To get started, users register and create a personal profile that can include photographs, a personal description and hobbies. They can then link up with friends, their friends' friends and so on until their network numbers in the thousands.
Users spend their time e-mailing back and forth, posting messages on bulletin boards and perusing other people's profiles. They can see how they are connected to individuals and offer to link up with them or accept invitations to link to others.
The interconnectivity is usually limited to four degrees. In other words, users can reach out only as far as a friend's friend's friend's friend.
The competition among Web sites is intense. Nearly two dozen companies are devoted solely to social networking, up from just a handful a year ago.
One of the latest is Google, the search engine in Mountain View, which entered the fray last month with the premiere of Orkut, named after the engineer who designed it.
Some analysts see many similarities between this latest dot-com boom and its bigger predecessor in the late 1990s. Indeed, many social networking sites -- flush with millions of dollars in venture capital investment -- have proven to be more adept at spending money than making it.
"It's definitely a space that has attracted a lot of attention," said Mark Argento, an analyst with ThinkEquity Partners. "Certainly, not all 30 companies are going to be successful.
"It's probably going to mirror the overall dot-com landscape of the past few years," he added. "You start wide and then, down the road, end up with 20 percent of the sites having 80 percent of the traffic."
Online hobnobbing isn't a new concept. Groups and message boards on Yahoo, MSN and America Online have served much of the same function, as have dating sites like Match.com and school reunion sites including Classmates.com.
But James Currier, chief executive of Tickle, a social networking site in San Francisco, believes the new crop of companies like his add a new level of sophistication.
"This is just a reconfiguration of what was already out there," Currier said. "But it turns out that presentation is important. The Web is all about presentation."
Friendster, based in Sunnyvale, gets much of the credit for the current social networking explosion. The company was founded in 2002, and was shepherded by a pedigreed team of investors that includes former Yahoo chief executive Tim Koogle.
To keep users interested, Lisa Kopp, Friendster's spokeswoman, said a number of changes to the Web site are under way. She mentioned an improved search engine, job hunting and expanded back shop technology, an effort to fix what has been a notoriously overloaded Web site.
"You add new services and benefits to users, and you keep them interested, " Kopp said. "You will be able to use Friendster as you always have, but use other things too."
Friendster says it has 5 million registered users. But the Web site had only 904,000 unique visitors in December, according to Nielsen/NetRatings, indicating that the vast majority of those who are registered didn't visit at all.
Users visit social networking sites for a number of reasons. They cite curiosity, voyeurism, reuniting with old friends and job hunting.
Gene Hwang, who co-owns a photography studio in San Francisco, signed up with several social networking services, including Friendster, Tribe and MySpace. In addition to advertising his business, he uses the services to keep in touch with friends, keep abreast of art gallery openings and land a handful of dates without really trying.
"If you can get dates and business, then it's the best of both worlds," Hwang said. But he added that finding something in common with another social networker is only the first step in dating, because "there is still the physical element and the connection."
Hwang said he likes the visual element that the social networking Web sites offer, such as photographs of users and the chance to see who knows whom. But he said that he signs on to the services less frequently than when he first started more than a year ago, when he spent a lot of time getting all his friends aboard.
"The first couple months, I was all over it," Hwang said. "But then you trail off."
For now, most social networking sites generate only nominal revenue, usually by selling advertising, according to analysts. However, after getting their Web sites up and running, many firms are now beginning to focus on turning the losses around.
Look for advertising on the Web sites to be ratcheted up, according to analysts. The sites collect enormous information about users from their profiles -- such as the sports they like and what types of pets they have -- and this can be used for targeted marketing messages.
Subscriptions are also considered to be a big part of the future. While most firms are expected to keep basic service free, they are planning to charge for new bells and whistles, such as extra e-mail storage, more photos and access to a broader range of potential friends.
For example, Tickle began a $19.95 subscription last month that gives users access to virtually everyone on the Web site, instead of just the usual four degrees. Users also get access to a separate dating site.
But Currier, from Tickle, isn't banking on social networking as his company's future. He believes that its business prospects are limited unless it's combined with other services, including dating and personality and career tests, which his company already offers.
"One of the questions about social networking is: Is there a business model?" said Currier, who added that his company has been profitable for seven straight quarters. "Probably not. But we think it's a good feature."
Of course nothing is stopping the big Web portals such as Yahoo, in Sunnyvale, from adding more social networking features. With their huge traffic, the portals could potentially reshape the industry to the detriment of the little players, according to analysts and some executives.
Several Web sites are trying to stand apart from the crowd by focusing specifically on business networking. Some of the major players include: LinkedIn, in Mountain View; Ryze, in San Francisco; Spoke Software of Palo Alto; and Monster.com, the job site whose parent company is in New York.
Users of these sites behave as if they are in an online Rotary Club. The goal is to make business contacts to land deals -- or at least get pointed in the right direction -- and potential employers.
John Girard, chief executive of Clickability, a San Francisco software company, has joined several business-oriented networking services. He uses the Web sites to schmooze and stay familiar with the social networking industry, which his firm may eventually sell software to.
So far, Girard says he has had mixed results. One small help has been the ability to do research on potential business partners.
Girard types their names into social networking sites to find out who they know and whether anyone at Clickability knows them. But he is often frustrated because people only put a fraction of their Rolodexes online, he said.
At least one company, Spoke Software, is trying to fix that shortcoming with a paid social networking service for companies. Depending on the setting, the software can cull through employee instant-message traffic and e-mails to better trace relationships.
Another irritation for Girard is the number of unsolicited sales pitches he receives from other users. Girard said he gets an e-mail at least once a week from a stranger who has tracked him down through his various business networking accounts.
"It's as close to spam as you can get," Girard said.
Sites for socializing
Social networking sites such as these offer users a way to connect with people at many different levels (friendship, dating, business networking, etc. ):
-- Friendster (www.friendster.com)
-- Friendsync (www.friendsync.com)
-- Friendzy (www.friendzy.com)
-- ItsNotWhatYouKnow (www.itsnotwhatyouknow.com)
-- Orkut (www.orkut.com)
-- Matcheroo (www.matcheroo.com)
-- MeetUp (www.meetup.com)
-- MySpace (www.myspace.com)
-- Palcaster.com (www.palcaster.com)
-- Squiby (www.squiby.com)
-- Tickle (www.tickle.com)
-- Tribe Networks (www.tribe.net)
These sites are specifically geared for business networking:
-- LinkedIn (www.linkedin.com)
-- Monster.com (www.monster.com)
-- Ryze (www.ryze.com)