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Niche social sites seek growth under Facebook's shadow
July 28, 2009 / 2:59 PM / 8 years ago

Niche social sites seek growth under Facebook's shadow

BANGALORE (Reuters) - What do you do when you’re a small online social network trying to compete against a behemoth like Facebook?

<p>Job seekers look through online job listings at The Work Place, which provides comprehensive employment and career services in Boston, Massachusetts July 2, 2009. REUTERS/Brian Snyder</p>

The answer may be to try to carve out a separate path by becoming a niche website for a specific audience base that advertisers, hopefully, want to target.

While this is no easy challenge -- given Facebook’s intention to become everything to everyone -- some small social media sites appear to be finding their footing and growing at rapid rates, albeit from a very low base.

Ning.com, which allows users to build their own social networks, opinion aggregator Sodahead and fansite Fanpop have shown triple-digit growth and notched up a few million users very quickly.

“There will always be a place for niche sites that have a focus, whether the focus is gaming, or a regional focus, or a functional focus like Twitter, or a vertical or demographic focus,” Gartner analyst Ray Valdes said, though he added that does not see them becoming as big as Facebook.

Facebook’s popularity with professionals and older users might be putting off some younger users, according to Chuck Schilling, a director at Nielsen Online.

“The original people who were on Facebook -- those of college age -- are becoming a bit disenchanted and will soon find their own outlets, now that their parents are coming to Facebook in droves,” Schilling said.

“People are branching out from the popular sites. They are exploring,” he said. “There’s a lot of room in the game.”

Advertisers are spotting an opportunity with smaller sites.

“The promise of niche social networks and social networking applications is a more targeted audience around a specific interest that will be extremely attractive to advertisers seeking relevant content and conversations against which to place their ads,” IDC analyst Caroline Dangson said.

BIG GAP

Clearly, the gap between the biggest social networks and the rest is huge.

Facebook had about 77 million U.S. users in June. With the exception of Facebook, News Corp’s MySpace and privately held Twitter, only a couple of social media sites had more than 10 million U.S. users, comScore data shows.

But there are many rapidly growing sites with 2 million to 10 million users, including Ning, Sodahead, Fanpop and Funadvice. And steadily growing in double digits are older sites like Hi5, Digg and LinkedIn.

“The fact that this is such a growing space overall does enable other players in the space to ride the coattails of some of these bigger sites,” comScore analyst Andrew Lipsman said.

Funadvice is a site where users give answers to all sorts of queries; Sodahead lets people to participate in instant polls; Fanpop gathers fans of movies, television and music under one roof.

Then there is Imeen, which focuses on music, and Eons, which targets the baby boomer generation. United Online’s Classmates.com helps users track acquaintances from school and college. Along ethnic lines, BlackPlanet is for African Americans and MiGente eyes Latinos.

Behind some of these smaller sites are big names: Time Warner’s AOL owns Bebo and Google owns Orkut.

Being second rung to Facebook is no fun, especially as developers of applications that attract users to these sites, such as games, tend to flock the biggest players.

Some of the second-tier social media sites have formed a consortium to address the problem. Google-led OpenSocial’s members include Yahoo, Hi5, MySpace, Friendster and LinkedIn.

Advertisers go where users are, but it is no easy task to amass an audience. So some Internet startups have chosen to become an application provider rather than try build a site.

Application maker Slide had an audience of 32 million in the U.S. in June; Rock You had 26 million, said comScore’s Lipsman. Zynga provides social gaming applications. The three have a strong presence on Facebook.

“In order to build a destination site, there are more challenges to gain that audience,” Lipsman said. “So it’s an increasingly viable business model to build an application that can reside or build off the infrastructure of other sites.”

Editing by Tiffany Wu and Jarshad Kakkrakandy

Our Standards:The Thomson Reuters Trust Principles.
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