Social Networking Going Mobile

3 Sep, 2008 By: Erik Gruenwedel

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Social network Web sites such as MySpace and Facebook attract millions of users and revenue. Now, a new report says the global phenomena is going mobile, with more than 140 million global subscribers projected to interact via cell phone by 2013.

The report by New York-based ABI Research found that subscription numbers for mobile social networks would climb slowly over the next four years but then ramp up significantly as cell phone technology and user interest embrace the concept. Subscription revenues for the mobile services are projected in excess of $410 million.

Specifically, the report said awareness in emerging markets such as Brazil, Russia, India and China would be key to the global success or failure of mobile social networking, according to research director Michael Wolf.

“So, we are quite conservative in our forecasts,” Wolf said.

He said mobile versions of social networks would likely follow the business models of MySpace and Facebook by offering free browser-based access. Wolf said such business strategies, however, could pose challenges to mobile operators by limiting their slice of the revenue to a charge for data traffic.

“The ideal scenario for the mobile operator includes a recurring revenue stream, including a subscriber paying $1.99 or $2.99 a month to have this application on their handset,” he said.

The ABI report established that mobile operators could significantly increase revenues through ad-supported content and electronic sellthrough of pictures, videos, games and music.

A recent end-user survey conducted by ABI found that mobile users of social networks are likely to consume two or three times as much digital mobile content than their “asocial” peers.

Indeed, Wolf said mobile operators heretofore have not catered products and advertising specifically to the social network user. The result, he said, is that social networking has thus far remained a PC-based activity.

“Social networking applications have to be uniquely mobile and not reliant entirely on advertising-based revenues, at least not initially,” he said.

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