SURF’S UP

The success of Facebook may be the talk of the town, says David Crow, but a number of serious competitors are catching up fast

In June, it was reported that Murdoch would be willing to swap the site in exchange for 25% of Yahoo!, a stake thought to be worth around $12bn. But recent developments suggest MySpace is serious about regaining the initiative. In October, it announced it was upping sticks and moving to San Francisco’s Silicon Valley to attract 200 new engineers. A much-needed redesign by one of the web’s most respected designers, Zach Klein, is also widely rumoured, showing this comeback kid is unlikely to accept the silver medal without a fight.

The race for the top spot in social networking is wide open, despite Facebook’s bumper performance in recent months. But the phenomenon itself is here to stay. In five years, half of all American internet users will visit a social networking site on a monthly basis, with more than 80% of teenagers following suit.

Facebook may have come unstuck with its recent advertising strategy, but the majority of users are happy to receive relevant ads in exchange for free sites. This is music to the ears of those in the digital advertising space. Advertising dollars spent on social networks are expected to hit $1.6bn in 2008 and $2.7bn in 2011. The biggest losers will be newspapers and television, as the threat from social networking and other online content mounts.

The Facebook Generation is up for grabs and Zuckerberg’s dominance is no longer guaranteed in 2008, as rivals differentiate themselves, win advertisers and lure fickle users. Indeed, the only guarantee this year is that mainstream media’s chance of getting the lion’s share of the Facebook Generation’s cash is becoming ever-thinner as the months roll on.