Three and three quarter years is a long, long time in social networking

So Google will pay $900 million (BBC) to Fox Interactive Media for a search deal across its various properties (read MySpace) over three years and nine months, provided various traffic targets are met. Fred says that the MySpace purchase is "starting to look like the best Internet purchase ever"; some of the details of the deal appear at PaidContent.

I can't see the details of those traffic targets anywhere (indeed, "certain traffic and other commitments" says TechCrunch, my emphasis), so let's just say that's the small print of the deal that makes this a practically risk-free win for Google and a big headache for Fox. (Do the traffic guarantees include pages as well as users? If so MySpace's page-farm interface (Jay Small) isn't getting fixed any time soon.) Yes, MySpace is about to go through its 100 millionth member. No, that doesn't mean it will have the entire population of the earth by 2010 or even that it will be able to keep the traffic it currently has. Three and a half years looks like an awfully long time - look at how fast Friendster was superseded and eclipsed or how well Bebo is growing against MySpace (BBC) in Europe.

The recent proposed ban on MySpace and friends from schools and libraries (and not just in the US) seems likely to make the next social networking battle one for mobile as young consumers shift their affinities to devices they can actually use at school: MySpace isn't strong as a mobile app and that throws the game wide open again. Consumers are fickle: sure, MySpace has a network effect going for it but it's a weak network, just watch what happens when the right handful of mavens and super-connectors shift their allegiance elsewhere. 100 million users sounds like a lot but it doesn't mean anything in social networking terms, not like it does for a market like eBay: what matters to each individual user is the 150 people they're really connected to (Yelvington), not the hypothetical presence of a hundred million spare strangers with whom they don't even share a language.

If MySpace manages to stick to its traffic (and other) guarantees, then yes, it makes $900 million between now and 2010. I expect that well before that point MySpace will slip, see much of its traffic dwindle away, and breach those covenants. Three and a half years is just too damned long.

Comments

[Anne Baker]

Mobile social networking is the next emerging trend as sites like Myspace gain popularity and media attention. A cell phone is an adept device for young people (target market for social networking sites) who lack the patience to get behind the screen of a PC to i.e. upload photos. Mobile phones can also provide location-based services that will allow users to physically locate friends. It's functionality like this that will drive social networking faster than we have seen so far. However, it's still questionable whether Myspace will be the winner as social networking picks up on the cell phone. The phone and the PC are two very different mediums and companies need to consider that when they develop their mobile strategies.