Analysis: Trends around Social Networking

Did Facebook find a monetization model worth billions $s yet?

Did Twitter find a good monetization model really?

What should we really talk about Social Networks?

All the talks that I’ve recently had with fellow entrepreneurs and friends, almost everyone is sick of talking about Social Networks these days. Like many, I too started feeling sick about them. With the hype around them, there seemed really little value-proposition in building another social network.

Is it especially because we see more and more networks targeted to the Indian masses and none of them with a real good mass appeal?

However, with every day feeds pouring into my inbox, I can see a trend. A trend which is against most of our beliefs. Michael Arrington will surely agree to this, having profiled most of these startups on TC already.

Lat’s have a look at the few names below and their statistics:

Teens-Social-Networking

Buzzhubb – A social network (by Satjot Sah) which establishes boundaries around the university campus – you can only join a school’s BuzzHubb community if you are part of the school. It’s a LaunchBoxDigital’s portfolio company that works on YCombinator model.

Friendster – A long time player who denied an acquisition offer by Google. Went through ups and downs has recently hired Richard Kimer, Google’s MD of Sales & Operations for South East Asia as the new CEO and has raised $20 million fund recently to make a total of $45 million.

WetPlay – Youth-oriented sports social network. Raised $8.6 million in a series B financing led by Deep Fork Capital which brings the total capital raised to $13 million.

SGN – Social Gaming Network focuses on games that include social interaction, and claims 1.1 million daily active users across Facebook, Bebo, MySpace, and hi5, with a reported 54 million application installs. The company has raised some serious cash, with over $20 million in funding and investors including Jeff Bezos.

Zynga – Another social network around gaming, recently closed a $29 million Series B funding round led by Kleiner Perkins, and has raised a total of nearly $40 million.

Plazes – A mobile based LBS social networking startup which has recently been acquired by Nokia.

LabMeeting - A social network for Scientists, In May, 2008 it closed a $500,000 seed round from a couple of angel investors.

myYearbook – A social network for teenagers that launched in 2005, has raised $13 million in a Series B funding round led by Norwest Venture Partners, US Venture Partners, and First Round Capital. The new round of funding brings the company’s total funding to $18.6 million.

Piczo – A social network with a strong teenage following, was founded just about a year ago and since then they have raised $11 million funding.

Koofers – A social network, which has become the third-most visited site by students, behind Facebook and MySpace. It’s a LaunchBoxDigital’s portfolio company that works on YCombinator model.

And there are many such networks mushrooming all across the globe.

Couple of trends to observe here are:

1. Emergence of Vertical Social Networking platforms, with a focus on the niche segment.

2. Many of them can be joined only if you are a student i.e. you should be the part of a school (A concept championed by Facebook).

3. Location Based Social Networks are still rare. Soon as one comes, it gets acquired. Something to really keep track of and may be a way to tap into the future.

4. Most of these networks have emerged in last 2-3 years, which is a very small time for anyone to predict their future. Whichever came earlier are already the big names.

5. Investors are still Gung-ho about betting high on the Social Networks. Should we call it as the “Facebook effect“?

Investor’s Savior
The trend looks really interesting. This also reveals a fact that Social networks have become a default choice for most of the investors towards hedging their investment risks. A couple of social networks in the portfolio isn’t really a bad idea either. A single successful community play can turn things around for anyone in today’s scenario.

Would you have any other observations on the same? Like to share?