Social networks revealed Tuesday, November 13, 2007

Interesting piece on Read/Write web today on demographics of social networks

Some highlights, followed by full details below from Rapleaf:

Facebook Users
- 2.6 million users identifed in Rapleaf
- 63% female, 36% male
- 17% <18>45 yrs
- 2.9 major social networking sites used on average
- 62% are on Myspace, 5% are on LinkedIn, 9% are on Friendster, 10% are on Plaxo, 22% are on Hi5

Myspace Users
- 11.3 million users identifed in Rapleaf
- 63% female, 36% male
- 20% <18>45 yrs
- 2.4 major social networking sites used on average
- 15% are on Facebook, 2% are on LinkedIn, 9% are on Friendster, 6% are on Plaxo, 17% are on Hi5

LinkedIn Users
- 0.8 million users identifed in Rapleaf
- 38% female, 61% male
- 2% <18>45 yrs
- 3.2 major social networking sites used on average
- 16% are on Facebook, 25% are on Myspace, 12% are on Friendster, 16% are on Plaxo, 8% are on Hi5

Friendster Users
- 2.3 million users identifed in Rapleaf
- 58% female, 41% male
- 12% <18>45 yrs
- 3.0 major social networking sites used on average
- 10% are on Facebook, 44% are on Myspace, 5% are on LinkedIn, 5% are on Plaxo, 26% are on Hi5

Plaxo Users
- 1.3 million users identifed in Rapleaf
- 62% female, 37% male
- 16% <18>45 yrs
- 3.6 major social networking sites used on average
- 20% are on Facebook, 53% are on Myspace, 11% are on LinkedIn, 9% are on Friendster, 15% are on Hi5

Hi5 Users
- 4.5 million users identifed in Rapleaf
- 60% female, 39% male
- 21% <18>45 yrs
- 2.8 major social networking sites used on average
- 13% are on Facebook, 43% are on Myspace, 2% are on LinkedIn, 13% are on Friendster, 2% are on Plaxo


Whilst this based on a sample using people they managed to identify, they are pretty sizeable sample sizes. I do wonder to what extent those people are active on multiple social networks rather than having simply left a footprint behind on sites they no longer use. The male/female ratios are also intriguing between the various communities - is it a surprise that LinkedIn is male dominated?

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This social is cookin' Thursday, November 01, 2007

According to Mashable, MySpace may join the OpenSocial party. As I mentioned in my previous post today, this would make perfect sense. My Space can play catch-up but without looking defensive, since they are joining an "industry initiative" as a good internet citizen.

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Concerns that 'in-person' social-networking could corrupt children Wednesday, August 01, 2007

As you'll know, it important for investors to keep up with trends in consumer behaviours to inform their investment outlook. Thus, I was intrigued by this story on NewsBiscuit

A controversial new teenage social-networking trend is emerging across the country, causing alarm amongst parents and community leaders. Rather than using the safety of computers or mobile phones to talk to each other, young people have started meeting up in person to chat, listen to music, share photographs and even form relationships.

This dangerous new craze goes under many benign-sounding names including, ‘hooking up,’ ‘hanging out’ and ‘seeing my mates,’ making it difficult for parents to realise that their children are embarking on a risky pastime.

If borne out, this would mark a worrying development for all internet Social Networking sites and could result in dramatic falls in their current valuations. It may well be the reason why Facebook opened up its' community to adults who have lost the ability to have a real social life and hang out at the Amusement Arcade, as well as to developers who have a new reason to stay in coding.

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Does Murdoch have shares in Facebook? Thursday, June 21, 2007

The Times ran a story yesterday that Murdoch is offering MySpace to Yahoo in exchange for 25% of Yahoo. This would put a valuation of $12bn+ on MySpace at current prices, not bad for a company bought in Summer 2005 for $580m.

The general consensus is that Yahoo would be mad to accept the deal at such a crazy valuation. But more interesting is how such a proposed price makes an alternate purchase i.e. Facebook, look such a steal at say anything less than $3-4bn. I've blogged in the past about how by introducing a competing item at a crazy price can influence choice.

So, let's assume I was sitting in Yahoo HQ. I might now conclude that I should go buy Facebook, as this will be a better deal than accepting Murdoch's terms. Why, Murdoch has already commented that he is worried about Facebook growth affecting his portfolio.

However, Murdoch is not stupid and you can see how he might win in many ways here

- They accept his offer and acquire MySpace for $12bn. RESULT. What a return on investment.

- They reject his approach and buy Facebook. Great, coz he just forced them to probably pay more than they needed by putting an overly high valuation on MySpace that upped Facebook's perceived "value". Moreover, the price Yahoo pays re-enforces the value of MySpace i.e. if Facebook sells for $3bn, then MySpace must be worth more, and so must Murdoch in turn!

But an additional cunning plan might be that he has persuaded an investment bank to sell him a synthetic long position on Facebook's value or, better yet, a synthetic pairs trade with a long position in Facebook and a short position on Yahoo. Such a deal would give him a payoff if the value of Facebook went up and the value of Yahoo declined. Consider how he could do this:

- Buying an interest in Facebook. An exising holder could "sell" their interest in Facebook at a pre-agreed price (call it $2bn equivalent price, which would have appeared to be a good price a week ago) thereby locking in the price they will receive. Murdoch "buys" at $2bn and keeps any upside above this, when it eventually sells. Putting this trade on ahead ahead of his manoeuvres this week would create an impressive profit.

- Selling an interest in Yahoo. Yahoo is a quoted stock, so getting a short position would be straight forward enough either through the options market or selling and then borrowing the shares. He clearly only profits if the price falls. It might do so if Yahoo buys Facebook at a price considered over the odds. It seems certain to fall if they accept the MySpace deal. In this latter case, if Murdoch took the 25% of the company shares and they fell in value, these would cover his short position and crystalise his short. As it happens, Yahoo could even look bad if they do nothing and see their stock price fall!

Has he really done this? Probably not and if he had it might be questioned whether he was insider trading. But what a strategy!

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In M&A, almost anything goes - MySpace & Photobucket Tuesday, May 08, 2007

A few weeks back there was a little news rumpus over the fact that MySpace had disabled Photobucket photos from appearing on MySpace pages. There was much discussion on blogs about why this had happened and how MySpace was throwing its weight around but how Photobucket was one of the most popular embedded items on MySpace pages and thus MySpace should be ready for some pushback.

Well, it turns out that this show of "force" was simply part of a negotiation tactic by MySpace who yesterday acquired Photobucket in a competitive bidding situation.

As Techcrunch observes "Some would argue that they play dirty poker, but shutting Photobucket down at a crucial point in the acquisition negotiations was a brilliant move, and may have shaved hundreds of millions of dollars off of the purchase price." Not to mention, it will have scared off some potential buyers in the race, worried about the impact on revenues and traffic this could have if implemented permanently.

Techcrunch contends that this was much better deal that YouTube was at a price of $250m on projected revenues of $25m. Or "To look at this another way, YouTube was paid about $67 per unique visitor. Photobucket got just $13."

It's ironic that another photo sharing site, Zooomr, had been struggling to find funding. I bet they find it easier now, although there is always a huge premium for being number one in a market and one of the potential future buyers will probably now be out of the running, unless of course they bought Zooomr for its technology and founder. Likewise, Flickr will probably be kicking itself for having sold for $25m.

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