By Jason Ankeny
The present state of the mobile social networking segment is a lot like the messages posted on the average Facebook or MySpace page: Some genuine enthusiasm, some over-the-top pronouncements...and precious little substance. Operators, advertisers and social networking service providers are all circling the space, but consumer interest isn't in step. According to a recent study released by media research firm The Nielsen Company, the numbers are increasing, but still underwhelming: More than 4 million U.S. wireless subscribers--1.6 percent of the total U.S. mobile consumer population--now access social networks via a mobile device. MySpace is the most popular mobile social networking site among U.S. subscribers, logging 2.8 million unique mobile users in December 2007, while Facebook enjoyed 1.8 million unique mobile visitors.
"We're still at that point on the curve where hype is exceeding substance and driving expectation, compared to actual revenue growth," says Mark Bole, CEO of mobile social media services provider ShoZu. "But this is not a market that's still looking for its target audience. We're not that far ahead of consumers."
The challenge facing companies like ShoZu is far different from the one facing other sectors within the mobile data space: While subscribers have so far shown little interest in watching TV or downloading music, they're sending text messages and snapping photos in record numbers. In other words, social networking behaviors are already ingrained in consumers--the next step is creating a simple and intuitive user experience that generates revenue by moving those photos off handsets and onto social networking sites.
"You can carry your cellphone anywhere, so you can create, consume and publish anywhere," says R. Paul Singh, president and CEO of mobile user-generated content solutions provider PixSense. "That is the power you don't get from other platforms. It takes it to the next level."
Operator involvement is central to expanding and improving the mobile social networking experience. "Carriers are an intrinsic, integral part of the business--they control billing, the relationship with consumers and on-deck placement," says Nick Desai, CEO of social media solutions developer Juice Wireless. "If you're not working with a carrier, you're working against them. Off-deck means no distribution and no revenue model."
But operators are coming around to the potential of mobile social networking. Case in point: As of this writing, MySpace Mobile has signed 23 carrier partnerships in 13 countries. The consensus thinking is that carriers recognize the platform's potential to drive data traffic and nurture their 3G network strategies.
"There is a commonly shared understanding that [mobile social networking] is some kind of lightning rod that unlocks value," says Shawn Conahan, CEO of mobile social networking platform provider Intercasting. "A year ago, mobile social networking was all very conceptual, but in that time it's gone from an interesting fad to something all the carrier executives are making a priority. The realization is that this isn't a fad--it's an evolution of personal communications that makes perfect sense in the mobile space."
The continued maturation of mobile social networking also hinges on surviving the hype cycle. "When something works, everyone thinks they can get in on the action," Desai says. "Because mobile is a natural extension of online social networking, a lot of people have rushed in--but when you hear about a company like 3Guppies [the mobile social networking service provider shuttered by investors late last year], it makes people think the space doesn't have legs."
Potential advertising revenues are also contributing to the mobile social networking ballyhoo. "It's notable how so many companies have turned up claiming their sole source of revenue is advertising--we've seen tremendous growth over the last six months, but monetizing the experience with advertising is over-hyped," says ShoZu senior marketing director Jennifer Grenz. "We all have to figure out how to balance revenue share between service providers, content providers and everyone in between."
The future also depends on cultivating a deep understanding of the wants and needs of the ever-growing social networking user populace. Perhaps the biggest transformation impacting the social networking space is the growing presence of enterprise users who've embraced the platform as a networking tool: Last fall, Facebook even announced a partnership with device maker Research In Motion to develop a mobile social networking software application for BlackBerry smartphones.
"We're seeing different stratification by age group or social networking persona or location--a 30-year-old in the U.S. has different motivations from a 30-year-old in China, and each requires different tools," Singh says. "People tend to think [PixSense's PSP mobile photo and video sharing solution] is a product only used by the 20-to-30 age group, but we've found the product is also used by 30-to-40 age group. The preservation of memories is more important to older users--for users under 30, it's more important to publish and share their content. There's an urge to make everything public."
But for all the different players, solutions, business models and consumer demands shaping mobile social networking's future, the fundamental human requirements for communication and self-expression seem to guarantee its future is bright. "When you look at all of these [social networking] sites side-by-side, you find about a 99 percent feature parity," Conahan says. "In fact, they all do about 12 things, and those 12 things can be divided into two categories: To either communicate with friends you already have or to make new friends. The experience is about increasing or maintaining your social capital. These are tools that are being embraced universally, and mobile is a reflection of that.