Growth cools at social networks

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The era of astronomical growth for social networking sites in the U.S. could be over as MySpace and Facebook have cooled off in recent months.

After experiencing rapid growth in the first couple years of its existence, MySpace's unique visitors totals have settled during the past six months at about 60 million. Although it still is the dominant leader in the category, the News Corp.-owned site saw a 2.4% decrease in unique visitors for January compared with December, finishing the month with 58.7 million, according to Nielsen Online.

The year-over-year numbers still are up, with the site gaining 8% since January 2007. But it's a far cry from the growth witnessed in March, for example, when the site saw a year-over-year jump of 54%.

While Facebook still is seeing an increase in visitors, its meteoric rise also has been tempered in recent months. The site saw a 12.6% jump from October to November -- after having been stagnant for a couple of months -- but has gained only 6.2% since then. Still, the destination is up 99% year-over-year; in April, however, it was up 152%.

The slowdown has been even more pronounced in the U.K., with visitors to MySpace and Facebook down 5% in January compared with December and Bebo losing 2%. MySpace, though, is the only one of those sites taking a year-over-year loss in Britain, down 9% since January 2007. Facebook and Bebo are up 712% and 53%, respectively, in that time period.

Heather Dougherty, director of research at Hitwise, attributed part of the slowdown to "user fatigue" around social networking sites. She said members of the sites increasingly are concerned about privacy and advertising issues and that for Facebook users, especially, there might just be too much activity on the destination to keep up with.

"Some of these things are starting to annoy users quite a bit," Dougherty said.

Another reason for the downturn could be the fact that, with hundreds of millions of users already signed up, there simply aren't many people left to be initiated into the sites. Dougherty pointed out that 95% of MySpace users visit month to month, so the rate of growth inevitably will slow down.

"There should be an adjustment of expectations," Dougherty said. "You can't keep up huge amounts of growth forever. The challenge now becomes innovation."

She said a new product, like the rumored MySpace Music offering, could spur renewed growth to the site.

Nielsen Online is owned by the Nielsen Co., parent company of The Hollywood Reporter.
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