Blog Post

Too Many Social Networks?

Business Week’s Social Netwoking Gold Rush had highlighted how social networks became the new black. And apparently, people, err… investors can’t get enough of them. Well, two more social networks have raised money. Rafat Ali has the details on the $15 million investment received by Bebo, a social network that is big in UK, Ireland and New Zealand. Benchmark,is the lead investor in Bebo, making this their second social networking investment. Friendster was the first, and was growing like mad when they invested.

Bebo is growing like crazy as well – it is ranked #10 by Comscore. Jeff Clavier notes that Alexa rankings put them ahead of Tagged, TagWorld, Buzznet and MyYearbook.

And there is news that Harvey Weinsten, formerly of Miramax along with ex-AOLer Bob Pittman have invested in, an invite only social network for the rich-types – aka anti-MySpace. If this is as exclusive a network, well, why not charge members for the privilege and use those funds to grow? Or is it really true – rich don’t pay for anything.

I am not sure where it is all going, but not all social networks are going to be around when the whirl-a-gig stops.

16 Responses to “Too Many Social Networks?”

  1. Instant Messaging could be considered an early version of invitation only social networks… They proliferated as well to include AIM, Yahoo Messenger, ICQ, MSN Messenger etc. But then Trillian came around (5 years ago) to provide a single interface for the major IM tools – and simplified life for many of us…

    Is anyone thinking of creating a Trillian type interface that will “aggregate” all the various SocialNets a user may belong to…?

  2. Isn’t that what World of Warcraft and the stock market are really in disguise? :)

    Here’s a bit for you. Aww thanks, and here’s a bit for you back. Hey that cost us one bit of electric each. Good thing we have the sun, the oceans, and the trees huh?

    WHAT?! am i think the only person who stays up all night playing Animal Crossing on my Gamecube?

  3. I just read a similar article on TechCrunch about Bebo. There are a lot of little guys chasing this space. Most of them offer no real point of difference. Many of the networks mentioned have little impact. MySpace and FaceBook seem to be owning it. I hate Friendster, but the fact is they have more opportunity than many of the above mentioned sites. AOL’s recent launch of their network is sure to steal a little market share from some of these little guys.

    Are YOU a Lost Cherry? Find yourself at I did:

  4. I don’t see the value of multiple networks for multiple target groups. A social network is only becoming successful when its a proven online brand. Building an online brand is hard, keeping customers in the network is even harder. Multiple sites will be uncool soon. Probably one of the Big 5 will become also leading in this space, so are they all the VC’s gambling on that exit?

  5. There is still plenty of room in the social networking scene especially among the foreign markets and certain niches. Lets not forget even here in the US with Myspace and Facebook there are still other very profitable social networks (i.e., that have a solid user base and are growing at a very healthy rate.


  6. “To join, you need to be invited by a trusted member. “

    this is anther issue on social communitys.. where the rich maybe hording their wealth to share ONLY amongst themselves..

  7. There will always be a need for “general interest” social networks such as MySpace and Bebo. However, general interest social networks are the most volatile. The user base is often fickle and subscribe to a “follow the pack” mentality. A general interest social network’s only added value is its size.

    The future of online social networks can be seen with LinkedIn and deviantART. “Niche interest” social networks will stand the test of time. They provide functionality their user base cannot live without. They are also a meeting place for likeminded individuals.

  8. The amounts of $ raised and corresponding valutions will lead to a blood bath among the generalists with but a few able to survive.

    We’ve seen this script before.

  9. “I am not sure where it is all going, but not all social networks are going to be around when the whirl-a-gig stops.”

    Certainly. The social network is much a like AOL. It was this gigantic place for everyone. Then a lot of people realized there were communities outside of Plato’s Cave (AOL).

    Where are they going? Mini, specialized communities such as I started for alphageeks/alphajunkies: Alphas Network. The thought of one’s voice and identity being lost among the masses will drive adoption of smaller and smaller communities.

  10. I don’t disagree with you but for one thing: unless they ramp outrageously by spending a lot of VC $$$, many of these SNs are going to be profitable. They might not show the growth rates that are required for spectacular exits, but they might become self sustaining businesses.