Mobile Social Networking Set To Take Off

    September 2, 2008

Online social networking continues to grow, but mobile social networking is on track to attract 140 mobile users who will generate $410 million in subscription revenues by 2013, according to ABI Research.

"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," said Michael Wolf, ABI research director.

"That uptick is based on assumed acceptance levels in the giant emerging markets such as Brazil, Russia, India, and China. Those countries are wildcards, very difficult to estimate, so we are quite conservative in our forecasts."

Some mobile versions of social networks will follow the same model commonly used today by MySpace and Facebook, offering free browser based access. Those models are problematic for mobile operators as they limit the revenue they charge 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," said Wolf.

Outside of subscription revenues that mobile social networking will generate, there will also be more opportunities in mobile advertising and mobile content sales. Mobile users of social networks are more likely to consume two or three times the amount of digital mobile content, including photos, music, video and games than their peers.

That indicates a significant marketing and advertising opportunity but Wolf says that is not occurring.

"They are not offering the right kinds of products for these users. The advertising isn’t that sophisticated yet."

"Social networking applications have to be uniquely mobile and not reliant entirely on advertising-based revenues, at least not initially."