Social networking going vertical
June 29th, 2010 § 1 Comment
When an industry starts to segment itself into more vertically distinct platforms, that’s a sign that industry has achieved acceptance among a larger user base, and is maturing. Such a maturing is clearly evident in the social networking industry. What was just two years ago an explosion of new entrants, new platforms, many with the same target audience or business model, has now started to display the classic vertical segmentation of a maturing industry.
Two examples point toward this trend, although there a numerous others that support the argument. First is Yammer.com. This is a business segmented social network that brings the benefits of social networking to the business enterprise. Yammer uses a familiar pricing model of a free option for basic services, followed by the typical SaaS approach of seat licensing for additional services and users.
A different category of social networking, but again an example of this move into vertical segments, is Socialgo.com. Socialgo appeals to a different segment, that of consumer interest of community, and enables affinity groups to build their own social network. And the pricing model is different, using a fixed monthly fee depending on level of features. So the group can build and grow as large as they want, for a fixed monthly rate.
This monthly rate approach from Socialgo adds an intriguing point: the shift away from the typical free approach, with advertising sales as the primary revenue model, toward a low-rate monthly fee. As the perceived value of the service increases within a segment, the opportunity to adopt new and different business models follows.
Social networking is still in its development phase, but this trend toward vertical integration accompanied by the enormous numbers of users, points to a maturing industry that still has great opportunity and lots of change.
Thanks for the blog, Keith, I am so glad to see that people are finally starting to recognize this trend.
I fully agree that the emergence of such verticals is a sign that social media has reached mainstream and been accepted.
The company I work for, DevelopmentNow, actually builds niche social networks for specific verticals and, though you briefly mention it here, there are a surprising number of people that want to create a social network, however, much like socialgo, determining a viable revenue model or acquiring sufficient funding for development can be a challenge.
It is a process that I hope will become much more clear as such vertical networks take off!