Wednesday, December 12, 2007

Churn, Churn the Wheels of Change

Social Networking sites have become really popular. The growth is being driven primarily by Gen Y'ers with young Gen X'ers following up.

However Gen Y is known as being quite fickle and will go looking for the next big thing if something changes. A trait that has suffered cell phone operators has started to be felt in the growth world of Facebook, MySapce and Bebo. The trait of churn.

Many users, for many reasons, have churned away from MySpace and headed over to Facebook. The reasons need to be analyzed and addressed if the share is to be maintained. Why do users churn? are they looking for more control, more privacy, more applications, less stickiness. Stickiness is usually a strong point. However one of the best example of stickiness going wrong is AOL. They make it very difficult to change ADSL vendors. One reason is the way that your email contacts are so difficult to retrieve to import to a new service like Gmail.

Bebo has recently announced support for Google's Open Social API set. Plaxo also supports this new standard that should allow better integration between social platforms. This will allow users to migrate between services and allows for the social networking equivalent of the Telco MVNO (like Ampd, ESPN Mobile etc) i.e. services that cater for a niche market or have a core brand that they wish to promote.

Something like iLike where the users share a common interest in music and get news updates, free music downloads from their favourite artists combined with the ability to network with people with similar tastes.

This not only affects the social networking sites but is starting to become visible in the business networking platforms as well. Established business network provider Linkedin could well be under pressure from Plaxo. Being a member of both I am seeing the same names appear across the platforms. Linkedin has been changing has recently offered a news service that is context sensitive to your company and competitors. Some of the restrictions have been lifted but the strength of Plaxo is it's crossover approach. With one dimension for business contacts, another for friends or family it allows the user to tailor which content is visible and shared based on which circle the connection is in.

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