BUSINESS
Review 2010: Social media snowballs
30-12-2010
by Sylvia Leatham
While some social media players snowballed to victory in 2010, others got frozen out of the game.
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If social media is a numbers game, then Facebook was the clear winner this year, notching up a staggering 550 million users by year-end. To put that number in perspective, if Facebook were a country its population would be the third-largest in the world, behind only China and India.
Facebook's 25-year-old CEO Mark Zuckerberg celebrated a triumphant end to the year, being named Time magazine's Person of the Year in December, just months after being immortalised in the box-office hit The Social Network.
Facebook wasn't the only network experiencing explosive growth this year. Microblogging king Twitter quadrupled its user base during 2010, with registered users leaping from 45 million at the end of 2009 to 175 million by October 2010.
Business network LinkedIn announced that it now has 85 million members in over 200 countries, while location-based social network Foursquare witnessed a massive upswing in numbers, leaping from a mere 200,000 users in 2009 to 5 million users in 2010.
The runaway success of social media was underscored in May when visits to social networking sites overtook visits to search engines for the first time in the UK.
Money moves
This year was also notable for attempts to further monetise social media. In spring Twitter unveiled an ad programme, Promoted Tweets, that allows advertisers' tweets to appear in search results on the site. Twitter also revealed plans for a second phase that would see ads pop up in users' streams automatically, even if they don't follow the advertiser or search for related keywords. No date was announced for this more controversial move into the ad space.
LinkedIn also began to explore more ways to make money from its user base, in addition to standard site ads. Late in the year it announced the rollout of Company Pages, a way for companies with LinkedIn profiles to better showcase their products and services.
Hot on the heels of LinkedIn's announcement, Facebook revealed a revamp to its user profile pages, a move many viewed as a bid to court professional networkers. The tweaked profile page encourages users to display key information like work experience and educational background.
Facebook also continued its campaign to become a serious social commerce player this year, with a number of companies launching apps and widgets to make it easier for users to buy products from retailers without having to leave the site.
And as if Facebook hadn't infiltrated our online lives enough already, the social networking giant made a move late in the year to position itself as an e-mail provider, encroaching into the space currently occupied by Google's Gmail and, to a lesser extent, Microsoft's Hotmail. In November Zuckerberg announced a replacement to Facebook's existing messaging system that he said would offer a "single social inbox" for users, integrating e-mail, instant messaging and SMS.
Buzz off
You wouldn't expect Google to take a challenge from an upstart like Facebook lightly, and indeed the internet behemoth made a serious -- albeit unsuccessful -- effort to enter the social space this year.
In February the search giant unveiled Google Buzz, a seemingly rushed attempt to capitalise on the clamour for social media. Within days of launch, Google was blasted for the Gmail add-on's apparent privacy holes, attracting a class action lawsuit and the attention of several government regulators. While Google did tweak some of the Buzz settings in response, the damage was already done and Buzz failed to ignite a critical mass of users during the year.
Don't expect that to be the end of the internet dominator's social campaign, however. Around the middle of the year rumours began to circulate that Google was prepping a Facebook challenger, thought to be named Google Me. Google's intention to take another stab at the world of social media was also signalled by the string of acquisitions it made this year, including social widget firm Slide, social payments firm Jambool, social games company SocialDeck and intelligent search firm Angstro.
Failures and reboots
The year was also notable for another massive social media failure: Bebo. In April, parent company AOL announced it would not be investing any more money in the social start-up, whose visitor numbers had dwindled to just 5 million in the US by February.
Then in June AOL announced it had completed the sale of Bebo to investment group Criterion Capital Partners, for an undisclosed amount believed to be a fraction of the USD850 million AOL paid to acquire the company just two years earlier.
Another once-great network, MySpace, was keen to make a fresh start this year, after pretty much conceding defeat in the social space at the hands of Facebook in 2009. In February, CEO Owen Van Natta stepped down after only 10 months on the job. Chief Operating Officer Mike Jones and Chief Product Officer Jason Hirschorn replaced him as co-presidents.
Then in October MySpace released a beta version of a redesigned site that it said would "redefine the company as a social entertainment destination for Gen Y". The new design seems to be an attempt to reposition MySpace as a content-sharing, trend-watching destination, and some analysts have suggested that MySpace would be open to offers if a buyer came calling. It remains to be seen whether MySpace can ever recapture the social media cachet it once had.
Expect to see social media gain even more market traction in 2011, as elements like location-based services and mobile payments get more integrated into our social networks.
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