New social networks invent twists to stay in game

New social network players say don't call "game over" simply because MySpace and Facebook are pulling in about 70% of the Web traffic that's headed toward the top 57 social networking sites. Scrappy new players are devising engagement strategies, narrow customer focuses, and product twists to lure audiences and catch the eyes of business developers. The market is still young and up for grabs.

"Developers need to iterate and develop quickly," states Jeremiah Owyang, social networking analyst for Forrester Research. "There's no best practice or rule-of-thumb yet. There's room for anyone to come in and become a dominant network."

Even though they don't compete as social networking Web sites, there are also thousands of Web applications, widgets, and communities vying for eyeballs, ad clicks, and screen turf. (One Web 2.0 directory listed 2,604 logos earlier this month, and Facebook alone claims 400,000 developers).

Like other early players still swimming after MySpace and Facebook canon-balled into the pool, PeopleJam, Inc. (DEMOfall 08) had to quickly change and overcome users' resistance to joining yet-another social network.

The company "evolved in many ways we would not have predicted when we launched," said Matt Edelman, CEO, PeopleJam. "When we appeared at DEMO, and for the first several months, we pursued a rather classic definition of a new type of site - social media. We found over the first several months, from user feedback and users, that the idea of having another profile, another place for your identity beyond the main social networks, was becoming burdensome, users were feeling profile fatigue."

"We started to observe, not just with PeopleJam, but also with other social media sites trying to drive connectivity around content and around lifestyle interests, that we don't see any successes in the market," Edelman said. "So we began to evolve the business to drive a different type of value proposition which is much more in the category of being a social utility. We've developed to be a social utility for people interested in self-improvement (launched Aug. 4) as a component of our site that will be layered on top of the social media."

Blogger Paul Gillin advises, "To survive, you've got to focus," advises blogger Paul Gillin, author of the upcoming book, Secrets of Social Media Marketing."Find customers who have attractive demographics. If there's one thing that the Web 2.0 experience should have taught us by now, it's all about targeted, small markets."

PeopleJam has a clear sense of its target audience: the personal development market, which, it says, "exceeds [US]$11 billion annually and is growing at approximately 11% per year, attracting an estimated 45 to 60 million adults with highly desirable purchasing power."

Tasty - if they can grab a slice.

For some companies, it's not about building another social Web site, but creating products with social networking twists.

"I wouldn't try to launch another social networking site," says Chris Anderson, CEO of Capzles (DEMO 08). "We are a tool with social networking aspects."

Later this month Capzles expects to announce musicians and other brands using Capzles, and, said Anderson, "We'll be offering a widget so you can make it look like part of your Web site, embed it on your blog, Facebook, et cetera...like a YouTube video or a Flickr slideshow, but letting people pop it to fullscreen."

"We're doing great, in terms of growth," Anderson states. "We're up over 1,000% from the beta." Based on key metrics about engagement --how long people are staying on the site, and how many pieces of content or pages they look at, "We rank very high versus established sites."

Another social networking company evolving its strategy is YouChoose (DEMO 08), which started out focusing on causes and this fall plans on branching out to topics.

"On the member side, we've been doubling about every three months," said Mike Dever, YouChoose CEO. "We've got close to about half a million members across the social network groups. Some of the top brands will pay for placement on the channel, (or) for their own channel."

One example of a new social network twist is Diigo (DEMOfall 07), which started as a Web annotation service, and re-launched in March as a knowledge-sharing community. Today, Diigo calls itself a "social bookmarking and annotation service, and, claims"almost a million users at present," said Diigo founder Wade Ren."We're not yet profitable, but we are generating revenues. We will becoming out with a full fee premium service soon."