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Future Of Social Media Sites
By Mikhail Tuknov (c) 2008

The current proliferation of social media sites is the most
pervasive phenomenon on the Internet today. Not since the
dot.com explosion has the there been an Internet trend that is
so widespread in its popularity. The comparison with the dot.com
growth is in fact one that is made by many industry observers,
and while there are a number of clear similarities, there are
also some important differences.

It is expected that by early 2008, all the various social media
sites will have more than 230 million members. That number is
predicted to grow until 2009, with a leveling off on the number
of new members expected by 2012.

The combined revenue from these sites, which in 2007 reached
almost $970 million, is estimated to balloon to a whopping $2.4
billion by 2012.

Membership growth in social media sites varies greatly from
region to region. The Asia Pacific region accounts for the
lion's share of users, with 35% of the total users expected by
the end of 2007. EMEA accounts for about 28% of all users, North
America follows closely with 25% percent, and the Caribbean and
Latin America trails behind with 12% of all users.

With the inevitable crowding of the social media site industry,
many observers feel that consolidation of the market is a sure
thing. This has given rise to some predictions that the smaller
individual social media sites will be swallowed up by the bigger
players in the field. Some experts feel however that this is not
necessarily the case. In particular, social media sites with a
focus on special interests are expected to survive the trend
towards consolidation.

The extensive hype and excitement currently surrounding social
media sites is perhaps what inspires the comparison to the dot
com boom, but in the midst of all the buzz, there is a certain
degree of trepidation felt by many as well. While many investors
are naturally excited about the potential of social media sites,
the fact that these types of web sites have not been proven for
the long term is causing some hesitation. The promise of riding
on the wave of the next big Internet phenomenon is a tempting
prospect, but it is tempered by the uncertainty of social media
sites as a long term sustainable industry. The most cautious
industry observers have even gone so far as to suggest that most
social media sites would do well to hold off on an IPO for the
time being.

The founder and chief executive of Facebook, Mark Zuckerberg,
has officially stated that despite his company's spectacular
growth, Facebook is still many years away from flotation.

While there is no doubt that social media sites are a genuinely
groundbreaking innovation that is changing the way we
communicate in many significant ways, past experience with
similar Internet phenomena shows that the hyper charged
atmosphere of excitement cannot last indefinitely. The industry
is currently characterized by easy capital, plenty of media
attention and widespread user curiosity – all of which directly
boosts creativity – but all that will come to an end eventually.

This does not mean that there is no future for social media
sites. On the contrary, the future is just as bright as ever and
at this relatively early stage of the game, it is hard to
predict just how huge the whole industry can get. What companies
and investors should do however is to adapt their approach to be
prepared for the changes that will inevitably come in the
future.

In a report published in 2007, Ri Pierce of Grove Technology
and an analyst at U.K.-based Datamonitor has detailed a few
suggestions that will help companies deal with the changes. Many
of these suggestions revolve around understanding market
strategies and various technological developments.

One of the most important things that companies can do to roll
with the punches is formulate a two pronged approach to deal
with the hothouse atmosphere that the industry is currently
experiencing as well as the eventual cooling off that is sure to
follow. This strategy will involve companies becoming more
heavily involved in establishing and maintaining the
infrastructure that is needed to run these types of web sites.
They would also do well to find effective means by which to
support social-networking services especially in the aspects of
scalability and availability.

As for the social media sites themselves, the most effective
means of ensuring continued popularity is through social media
optimization. There are a number of ways commonly used to do
this but five rules have been particularly effective in
attaining this goal. Formulated by Rohit Bhargava, these rules
are: Increasing the linkability of your social media site,
making the tagging and bookmarking process easy for your
audience, rewarding inbound links, helping your content travel,
and finally encouraging mashups, which are web applications that
combine data from more than one source into a single integrated
tool.
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Mikhail Tuknov offers ppc search engine marketing services
http://www.infatex.com
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