Social networking to plateau

By Candice Jones, ITWeb online telecoms editor

Johannesburg, 19 Oct 2007

Active registrations for social networking are expected to slow to a more realistic rate in the next four to five years.

This is according to the Mike Stopforth, CEO of social and mobile media company Cerebra, commenting on a recent global report released by Datamonitor.

"Every technology innovation has an adoption curve of around seven years, and the social networking phenomenon is no different," he says.

The report, "The Future of Social Networking", states that the "explosive growth in social networking will plateau by 2012; earlier for the US".

Says Stopforth: "We are one or two years behind the rest of the world, but we will see a similar stabilising of growth in the social networking arena over the next few years."

He says SA has been playing a catch up game with Web technologies, primarily because of high broadband costs and access.

"However, this has changed dramatically. We have followed the rest of the world by adding to the explosion of social networking. This will definitely slow down over the next three to five years.`

Money-spinner

According to Datamonitor, by year-end 2007, Asia Pacific will account for 35% of the world`s social networking memberships.

Europe, the Middle East and Africa will hold 28% of memberships, and the Caribbean and Latin America will account for 12%. North America is expected to hold 25%. The company expects membership growth in all regions to have peaked by 2009 and to have levelled out by 2012.

"Notwithstanding the fact that many users have multiple memberships, this represents an extraordinary cultural trend," says Ri Pierce-Grove, technology analyst at Datamonitor and author of the report.

He says revenue from social networking services should reach $965 million and grow to $2.4 billion by 2012. "Infrastructure providers, social network providers and wireless players stand to profit largely in the near-term."

Pierce-Grove says large firms and other commercial ventures will consolidate the trend. "Market experimentation will continue as operators seek the optimal combination of features and functions, as well as more sustainable operational models. However, the sites themselves will not necessarily consolidate; special interest social networking services will continue to play a valuable role."

As the market becomes more crowded, it will become harder for social networking sites to remain independent, he states.