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It’s Official: U.S. Social Networking Sites See Slow Down

January 29, 2008

I just got a hold of the ComScore numbers for U.S. social networking sites, and it ain’t pretty folks. (See an abridged version of the chart below this post.) After peaking in October of 2007 with 71.9 million users, MySpace, the leading social network, has seen its audience fall back to around 68.9 million unique visitors. December saw no growth over November, though visitors were up 13% from last December.

More alarming are the engagement metrics. Since December 2006, when MySpace engagement peaked at about 234 minutes spent per visitor, time spent on the site has dropped consistently throughout the year. In December, time spent per visitor saw its biggest month-to-month drop, of about 8.5%, to 179 minutes per visitor per month, down from 196 minutes in November. That equates to a 24% year-over-year drop.

But the pain is not just a MySpace problem. It seems to be an industry-wide issue. The total audience of U.S. social networks seems to be stuck at a low-to-mid-single digit growth rate, while the engagment metrics are falling for just about everyone. Time spent on Bebo.com has been sliced in half over the last four months, while Friendster’s time spent has plummeted nearly 75% in the same time period. Overall, minutes spent per site fell 5% in December 2007 compared to the year-ago period.

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Even Web darling Facebook can’t buck the entire trend. The good news for Zuckerberg & Co. is that the company continues to grow its U.S. audience. In December, Facebook claimed abut 35 million visitors, almost double its year-ago audience of 19 million. The bad news is that Facebook’s engagement is down sequentially, and only up 13% year-over year.

So what does this all mean? For starters, slowing and/or decling growth will make it harder to generate sales and profit growth from these sites. That will put more pressure on the advertising programs to deliver results. Of course, they could offset the declines through overseas gains. But so far, advertisers have been leary of marketing on social networking sites outside of the U.S.

All eyes will be on the News Corp. earning announcement on Feb. 4 at 4pm. Then we’ll find out how the slowing growth has actually impacted the sales and profit potential of these sites. My hunch is that the numbers won’t be as rosy as the company would like.

Average Minutes per Visitor Dec-06 Jan-07 Feb-07     Oct-07 Nov-07 Dec-07
Total Internet : Total Audience  1,764.90 1,746.90 1,721.90     1,817.70 1,732.70 1,684.90
MYSPACE.COM 234.6 227.5 184.8     192.9 196 179.3
BEBO.COM 213.3 417 302.7     231.8 246.8 173.9
FACEBOOK.COM 150.4 170.2 199.9     195.6 189.7 169.4
HI5.COM 22.7 34 28.1     53.6 62.5 56.6
FRIENDSTER.COM 39.5 38.6 31.5     109.2 69.8 39.2
Windows Live Spaces 17.3 14.6 17.2     14 13.2 14.9
LINKEDIN.COM 8 6.7 5     8.7 9.9 7.1
                 
                 
Unique Visitors (000) Dec-06 Jan-07 Feb-07     Oct-07 Nov-07 Dec-07
Total Internet : Total Audience  174,199 175,559 175,653     182,206 182,362 183,619
MYSPACE.COM 60,887 61,524 64,443     71,982 68,746 68,905
FACEBOOK.COM 19,105 18,961 16,737     32,910 33,660 34,658
Windows Live Spaces 9,589 9,057 8,320     9,854 9,884 8,912
BEBO.COM 2,977 3,602 2,641     4,442 3,674 4,279
LINKEDIN.COM 872 1,122 1,211     2,782 2,784 2,868
HI5.COM 3,029 2,299 2,640     2,454 2,165 2,483
FRIENDSTER.COM 1,103 1,288 1,379     1,668 1,687 1,791

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