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Jan. 5, 2009

Overall, virtual communities are the main driving force as the wireless Internet rapidly expands from a novel app into a mass-market phenomenon.

Long-time and established Web giants are strongly dominating their mobile-centric counterparts.

With claims that it now has over 120 million total members, Facebook is now the second-most popular site among U.S. mobile surfers using Opera ASA’s Mini browser.

Meanwhile, MySpace is number three, effectively giving way to Facebook for the very first time. Friendster finished sixth, according to recent numbers from Opera, the Norwegian browser company.

Those numbers are in line with figures published by ABI Research that indicates that about 50 percent of all social network members have visited their favorite sites on their mobile phones and smartphones.

About 69.7 percent of all mobile social networkers have visited MySpace, barely outpacing Facebook’s 66.8 percent.

The uptake of mobile social networking destinations is strongly expected to continue, as wireless users move beyond updating their activities and checking messages on their cell phones, and opt to perform more active functions like posting photos and commenting on the walls of their friends, according to a recent report from ABI Research.

And while about 16.8 percent of users accessing a social network on a mobile phone do so on a daily basis, the disparity between the two platforms will shrink as the lines between the mobile and fixed-line Web are still a bit confused and more time is needed to get a better overall picture.

As a whole, Facebook is doing rather well among mobile users around the world, according to Opera’s numbers. For example, it is the most popular mobile site in South Africa, ranks second in Canada, Egypt and the U.K., and is a top-5 destination for users in France, Indonesia and Italy.

But the current increase in mobile activity comes as wireless industry analysts are beginning to doubt at just how much money there is to be had in the overall social networking segment.

Overall valuations may never have been higher: witness Facebook’s reported $500 million offer for Twitter, which was spurned despite Twitter’s inability to produce income. Analysts say both Facebook and MySpace are poised to see substantially winnowing revenues in the next few years as current advertising deals expire and likely to be replaced by far less attractive pacts.

eMarketer has now reduced its forecast for U.S. ad spending on MySpace dramatically for 2009, and worse, lowering its 2008 estimate 21.2 percent to about $585 million.

However, smaller players in the mobile segment are still making headway.

Friendster is popular in some worldwide markets, and wireless-focused startups like Bebo, Getjar, Orkut and Peperonity are also gaining traction in addition to more market-specific communities such as Nasza Klasa in Poland and vKontakte in Russia and the Ukraine.

Others, like itsmy.com and Newbay appear to be gaining ground as well, and tens of dozens of newcomers are vying for a share of the rapidly-expanding market.

ABI analyst Michael Wolf says “the fact is that more consumers are really starting to adopt social networking on their phones. The combination of more capable phones with flat-rate mobile broadband and pre-installed social networking software will solidify social networks as hubs for entertainment and communication.”

It will be interesting to see how these new trends unfold themselves in 2009, and the overall impact they will have on social sites.

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Source: ABI Research.