Mobile Social Networking To Top $410 Million By 2013

Sep 10, 2008 3:47 PM, MD&D News Staff

Social networking sites like MySpace and Facebook have revolutionized the way teens and now grownups and even businesses use their computers. With the advent of 3G cell phones and beyond, users will be able to take these networks on the road. In fact, ABI Research expects 140 million mobile social networking users by 2013 with subscription revenues exceeding $410 million.

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“Subscriber numbers for mobile social networking will climb at a relatively modest rate for the next three or four years, but will then start to accelerate sharply,” says ABI Research director Michael Wolf. “That uptick is based on assumed acceptance levels in the giant emerging markets such as Brazil, Russia, India, and China. Those countries are wild cards, very difficult to estimate, so we are quite conservative in our forecasts.”

Generating revenue appears to be a challenge, though, as current networks like MySpace and Facebook offer free browser-based access. Their online models are expected to use a similar model. Mobile operators, then, will find profits at first by charging for data traffic.

“The ideal scenario for the mobile operator includes a recurring revenue stream: a subscriber paying $1.99 or $2.99 a month to have this application on their handset,” Wolf says. While this may seem modest, operators also will find significant opportunities in mobile advertising and especially in mobile content sales.

ABI Research notes that mobile users of social networks consume two or three times as much digital mobile content like music, video, and games as their “asocial” peers. With this in mind, Wolf says, it’s a neglected market that’s ripe for growth, as long as it’s done right.

“They are not offering the right kinds of products for these users. The advertising isn’t that sophisticated yet,” he says. “Social networking applications have to be uniquely mobile and not reliant on advertising-based revenues, at least not initially.”