I usually find the various market research stuff that floats around is relatively useless as stand-alone bits of information. I used to wonder who paid for that stuff, but over the years have learned that the money tends to come from the companies that want to appear in the list of recommended vendors at the end of the research report. The numbers tend to be more interesting when considered at a more abstract level and it may even be possible to infer something meaningful by looking at the number of projections in a particular space and their spread, but I haven’t had time to refine my thinking on that one.
For now, here are a few interesting data points in terms of market value for Mobile Social Networking…
- The global market for Mobile Web 2.0 (social networking, user-generated content, mobile search and mobile instant messaging) will increase from $5.5 billion currently to $22.4 billion in 2013 of which social networking/UGC is expected to comprise half of that 2013 figure. (Juniper Research)
- For reference, social network advertising (in general, not just mobile) continues to be experimental to marketers, but 2008 revenues are predicted to be over $1.5 billion. One firm (eMarketer) projected that advertisers would spend $1.6 billion on social network advertising this year; in May, the firm lowered that forecast to $1.4 billion.
- In 2006, mobile social networks made more than US$1.5 billion and that amount more than doubled in 2007. By 2012 revenues generated in this industry is forecast to reach US$28.9 billion in the most conservative scenario and $52 billion in the high growth scenario. (Informa)
… Hmmm. $52bn. That is a pretty big market, but that is the global number and I suspect that it covers a wide range of activities. Indeed, that is the problem with the category of Mobile Social Networking - it is a broad, catch-all category. For reference, all global mobile revenue this year is likely to be in excess of $800-$850bn.
Here is some usage data from research and specific company references…
- % of mobile subscribers who access social networks over the mobile Internet: 1.6% (USA - 4m users), 1.7% (UK - 812k users), 0.6% (Italy - 293k users), 0.8% (Spain - 290k users), 0.6% (France - 255k users), 0.2% (Germany - 141k users). (Nielsen)
- 49.7% of iPhone users accessed a social networking site in January, nearly twelve times the market rate in the USA where the figure for smartphones in general is 19.4% and the figure for the market in general is 4.2%. (M:Metrics)
- mobikade, the Japanese ad-funded mobile social networking service that launched in 2007 in the UK, now has 50,000 members and generates 6m monthly page views in the UK (although no one I have asked has ever heard of it).
- There has been 86% growth in the number of consumers accessing social networks on their handsets in the year to the end of March 2008. That equates to 17.1 million consumers in total in six countries. (M:Metrics, numbers apply to the markets they research)
- the number of mobile social networking users exceeded 50 million, approximately 2.3% of the global mobile user population on December 31st, 2007, although some of these users were registered in multiple mobile communities. (Informa)
- MocoSpace, the social network for mobile phones, is the 3rd most trafficked site on the mobile web in the US according to web browser company Opera. According to the report, over 63% of US mobile web traffic is to social networks. The report indicated that MocoSpace is one of the top ten destinations in a number of countries including the US, UK, South Africa, India, and Indonesia.
- The same report from Opera showed that Germany-based Peperoni Software (www.peperonity.com) is” one of the most successful companies” in the mobile social networking business. The ad-funded platform contains almost 4 million user created pages with a strong presence in India and South Africa. The company states that it had more than 340 million page impressions and about 10 million unique visitors per month and that more than 770,000 users have designed approx. 4 million individual sites.
- In May, Vodafone UK revealed that Facebook was the most visited site by its mobile Internet users, with MSN, Bebo, MySpace and YouTube all appearing in the top 10.
… I’m told that some analysts reckon there are nearly 1bn mobile users who use their phone for some kind of “infotainment”, so 50m doesn’t sound unrealistic and maybe half that number in terms of real, unique users. I was going to include more company announcements, but adding together all the users of the various venture funded companies in the space quickly seems to go beyond the population of the planet.
Now for the projections of users…
- Analysts estimates that by 2012, there will be about 30 million mobile social network users in the USA from the ~18-25 age range. The expectation is that the service providers will generally struggle to monetize mobile social networks. (In-Stat)
- More than 800m people are predicted to use social networks via a mobile phone by 2012… I have no reference to the geography, but will assume it is global. (eMarketer, May 08)
- Internationally, the number of mobile social network users will frow from 525 million this year to 975 million in 2012. (ComputerWorld)
- 950 Million Users Will Access Social Networking Sites via Mobile Devices. (Pyramid Research)
- 32% of social networkers believe mobiles will be used to alert users to friends or family in the vicinity (Wadja, sample size of 500 in Europe)
… the numbers have a pretty wide spread, but much of this probably relates to different definitions of the term “mobile social networking”. Perhaps one billion people using mobile devices to interact with some kind of intermediate social site in 2012? Not impossible if the space is defined broadly enough.
And some interesting news snips…
- T-Mobile has launched its “My Social Sites” application that “provides users with a single and easy to use interface, which allows social networkers to manage their most important sites in a simple way, direct from their mobile phone.” The application is based on a product from San Diego-based Intercasting.
–> This raises the question of how much money might be made and raises the issue of *who* will make the money from mobile social networking.
- Vodafone acquired Danish social networking company ZYB, for Euro31.5 million. ZYB operates a social networking and online management tool that enables users to share and back up their handset’s calendar and contact information online.
–> Should note that some view ZYB as a good contacts back-up facility and are doubtful of the company’s social networking credentials, but hey, 31m Euros is 31m Euros.
Last but not least, some data points on funding…
- Pelago has raised $15 million in venture financing, money that the Seattle startup will use to expand its mobile social networking application in Europe and Asia. The company’s application, Whrrl, is some kind of city guide that also allows users to see friends on a map. Investors included the recently announced iPhone fund.
- Jaxtr raised $10 million in a second round of venture capital led by Lehman Brothers Venture Partners bringing total funds raised to $20m. The company is positioned as a mobile social network, but is biased towards enabling cheap calling. Users get a bundle of free monthly minutes and then need to pay for additional calls. The company claims to have more than 10 million users in 220 countries after about a year in business.
- Mobango Received $5.7 Million for a Mobile Social Network proposition that lets users create, upload, store, convert, share and play all sort of content for mobile devices. The company claims around 3 million registered users.
- Kyte raised $15 million in funding in Dec 07 taking total funds raised to $17m. The company has developed a multimedia service that allows mobile phone users to share video, pictures, music, or text that can be posted on web sites such as MySpace, blogs, or broadcast to other mobile phones.
… Overall, VCs invested $431.2 million into 92 mobile social-networking companies in the first three quarters of 2007 (PWC)
So, what do I think…?
- Mobile social networking will be an extension of social networking. I think the sustainable plays in the space will seek to add value to the social networking experience in general by developing capabilities that leverage specific benefits of mobile to enrich the overall social networking experience. In other words, I think it is less interesting to try to create a new social network that just works on mobile.
- The interesting companies are the ones that are developing unique capabilities that enrich the social networking experience and find innovative ways to leverage the unique properties of mobile.
- Mobile operators have a big role to play either in supporting and facilitating or in further opening up data tariffs and getting out of the way. At the end of the day, it needs to be easy and relatively inexpensive for consumers to use data services on mobile.
- Many of the existing web-oriented social networks will try to focus on doing their own thing on mobile. Unfortunately, mobile is hard. Really hard. When they realise this, there will be some convergence opportunities and while some players will buy in a mobile social networking capability, there will be a strong residual opportunity for players on the mobile side to more easily extend and enrich the web experience with some mobile functionality.
- The party is pretty much over for new entrants into this space …
OK, I’d better stop here before I stumble across more projections or funding announcements. I’d love to know what people think.