The blogosphere is abuzz on Hitwise's contention that MySpace is the most-popular Web site in the U.S., accounting for 4.46% of Web site visits during the first week of July. Frankly, I'm not sure how to interpret this “news”. First, I'm curious about Hitwise's ranking methodology, which involves the collection of data from ISPs, which is then run through Hitwise's proprietary software to produce its results, which do not – at least for public consumption – featurethe number of unique visitors. I'm not denying MySpace's populararity (ComScore reported it had 51.4 million unique visitors in May) but it is a surprise MySpace has become more popular than Yahoo in such a short period of time. Another interesting element to the “who's the most popular kid in class discussion is Youth Trend's research suggesting the most popular site with youth is….Google. For some other takes on the ranking issue, check out Mathew Ingram and Jeff Clavier.
Another intriguing issue about MySpace is what its popularity means as far as how advertisers approach social networking sites. Does this mean there will be a huge shift of marketing dollars to the social networking market, which also includes players such as Facebook and Bebo? My take is the the social networking “opportunity” is similar in many ways to China – the market is huge from a people and potential perspective but it looks like a hard nut to crack in terms of making money. For advertisers, MySpace, et al are moving targets because they are attract younger consumers, who fall out of love with brands – and Web sites – and quickly as they fall in love with them. For all anyone know, MySpace may be so yesterday by the time students go back to school in September. So what do you do if you're an advertiser tempted by MySpace's 51.4 million unique visitors. Do you step up and hope MySpace doesn't become the next Friendster? Or do stay cautious and spread your bets around?
If you think marketing is a challenge, take a look at the M&A market. After Rupert Murdoch spent $580-million to buy MySpace, the value of popular social networking sites has exploded in a way that harkens back to the dot-com bubble. Bebo, for example, apparently turned down a $550-million offer from BT. How is this value established? Have we gone back to bizarre dot-com tools such as unique visitors (aka as “eyeballs)?
Bottom line: lots of opportunity, lots of potential but lots of questions that should make everyone step back to get some perspective.
Update: CNet has a story that some U.S. politicians have accused MySpace and other social networking sites of failing to protect minors from sexual predators. For more, check out TechDirt and Reuters.