The rise and rise of social media

As social media websites overtake personal email online, are they really about to change the world?

Last Updated: 31 Aug 2010

More than two-thirds of the world’s online population now use social networks and blogs, according to research firm Nielsen Online. Apparently, that makes it the fourth most popular online category after search, portals and PC software, pushing it ahead of personal email for the first time. What’s more, their usage is growing more than twice as fast as any other category: last year it accounted for 9.3% of all times spent online around the world, which is half as much again as the previous year. So is this a fundamental change? Or just a passing fad?

Apparently the UK is one of the most enthusiastic adopters of social media: Facebook has a greater market penetration in the UK than anywhere else, while social networks and blogs more generally now account for one in every six minutes spent online in this country. We’re also more likely to access these sites via our mobile phones than anywhere else. However, we still lag well behind Brazil, where social media sites have a penetration rate of 80% and account for a quarter of all online time. Aren’t the Brazilians talking to each other any more?

In some ways it’s not surprising that social media sites are on the rise at the moment. In tough economic times, entertainment providers always tend to do well, as people look for a little cheer among the gloom. For instance, figures out this weekend revealed that UK cinema-going hit new heights last year, thanks to films like Mamma Mia (to our lasting discredit, now the highest-grossing UK film of all time), and Quantum of Solace: admissions were up 1%, while takings rose nearly 4% to more than £850m. And if a trip to the cinema represents a fairly cheap night out (with an average price of £5 a ticket last year), a night in with your favourite social network is even cheaper (i.e. free, usually). So they’re unlikely to lose custom to the credit crunch.

But according to Nielsen CEO John Burbank, it’s not just a cost-driven flash in the pan. ‘Social networking will continue to alter not just the global online landscape, but the consumer experience at large,’ he insists. He believes these sites have brought about a fundamental shift in the way people interact online – so companies must also communicate with us differently, working with social networks to develop new ad models that are more about ‘participating in a relevant conversation’.

However, it also seems pretty clear that nobody’s cracked this yet – and until they do, some of the dotcom-like valuations attached to Facebook et al are still going to look pretty exorbitant to us...

In today's bulletin:

IMF: Brace yourself for 'The Great Recession'
Greggs looks forward to baking weather
YouTube kills the music video star
The rise and rise of social media
Is this the perfect time to do an MBA?

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