Social networking, via the Internet, has grown in the past 3 years into a major global cultural phenomenon, with key players including MySpace, Facebook, Friendster and YouTube.

Ben-Avinoam: The Time is Now for Mobile Social Networking

The speed of growth in people visiting social networking Websites is astounding.  Founded in 2004, Facebook boasts more than 67 million users worldwide, and an average of 250,000 new users join each day. Friendster has over 50 million users.  YouTube, the user-generated site for uploading and sharing videos, has previously been reported to host over 6 million videos  while MySpace, according to a recent report, is currently the fifth most popular website in the world.

As the competition and revenue generated from social networking sites have increased, many of the top players are making the strategic decision to expand their user-bases by allowing access via a mobile network.  They have recently begun offering WAP access to their sites directly from mobile phones, and YouTube has now released a mobile Java-based client application with greater user interface.  These steps in turn have created a growth in users accessing social networking sites over a mobile network.

There are a number of factors driving the growth of mobile social networking, beginning with the truly staggering amount of mobile handsets being used today.  There are now over 3.3 billion cell phones in the world today – approximately one for every two humans on Earth.  That number is far greater than the number of Internet users.  Realizing that, social networking Internet sites clearly want to expand the number of users by allowing access via a mobile network. 

CAPITALIZING FINANCIALLY
From the other side, mobile operators, wireless B2C and content providers are trying to take advantage of the online social networking phenomenon in the hope of capitalizing financially.  Portability is certainly a major advantage of mobile phones in terms of access to social networking sites.  Whether it be a student on the way to school, a family on vacation, or a business traveler trying to keep up to date, the ability of a mobile phone to be constantly available in the user’s pocket is a clear advantage that mobile Internet users have over one who is surfing the Internet through a fixed-line computer. Users generally have their mobile phones with them most of their waking hours.  Finally, thanks to GPS and other technologies, a cell phone has an innate ability to “know where it is” – which can be used allowing the users to consistently change their location status, and locate other users wherever they may be.

With the advent of Internet content technologies and services, the deployment of 3G and 4G networks and the development of smart portable devices, mobile users are now rapidly consuming more and more content, while seeking an improved user experience. At the same time as the weight of the traditional revenue generation from voice and messaging is declining, the mobile market is now seeking new business models.

The future of the mobile industry will focus and rely on content-related strategies. The market transition into new content-related business models results in a need for a variety of revenue schemes and an adaptable flexibility in business schemes and tracking of market trends.

CHALLENGES
However, simply translating existing fixed-line Internet models won’t work well.  There are clearly many challenges that mobile operators face when looking to capitalize on developing mobile social networking services.  While almost all new mobile phones are equipped with Internet access, users wanting to connect have to pay relatively high costs.  Users of social networks on the fixed-line Internet do not have to pay high costs to use such services.   Operators also must find ways to minimize current high costs of data services over a mobile network.  Finally, the user interface varies significantly among different handsets and different operator networks, while popular current social networking services are, quality-wise, uniform across the spectrum of different fixed computers.  These and other challenges must be overcome for the highest value-added service to develop. 

Once these challenges are met, the potential for growth is substantial.  A recent Informa report,  predicted that mobile social networking revenues could reach $52 billion by 2012. The future of the mobile industry will focus more on content-related activities.  Though the current mobile content market is already a significant business, it’s still developing and far from reaching its full potential. 

How can Web-based social networking services, mobile operators, wireless B2C and content providers best position themselves in relation to the mobile social networking expansion?

The key is to create a platform that maximizes the aspects of online social networking sites that users love – being able to locate their friends, connect with people of similar interests, professional networking, etc.  At the same time, the platform must use the advantages provided by a mobile phone, such as user penetration, portability and location-based services.  In order to bring in revenue for these services, mobile operators, wireless B2C and content providers must provide the most optimized platform that clearly defines the advantages in their service. This requires new concepts that will enable providing a universal “unlimited” search space, instead of today's limited portal-specific approach; offering virtually unlimited access to all kinds of content from licensed copyrighted materials to user-generated content in one universal and user-friendly way; sharing of all the content on a social community basis.

The new concept has yet to offer fully monitored access and sharing of content in a way enabling to enforce the individual policies to comply with copyrights, to promote specific content and to support a variety of monetizing schemes from paid to free ad-funded content consumption.

It’s clear that much of mobile social networking is still in development. Only time will tell how much revenue is brought in, and how fast the technology will develop.  What is clear though is that the time is now for mobile operators, wireless B2C and content providers to accelerate their platforms, and to make social networking as portable and profitable as possible.

Ben-Avinoam is CEO of Nareos, a California-based technology company that operates the PeerBox Mobile, a mobile content-sharing and social networking service.