How Long Before Social Networks Enter a Consolidation Phase?

by Khalid Hosein on August 14, 2007

It seems like everyone is hopping on the social networking bandwagon. Just last week, address organizer Plaxo launched a social networking site (Pulse), and I was blown away to see that there at least 43 sites/applications to build social networks (Reviews 1, 2).

Now think back a bit to when every company in and outside of Silicon Valley stood up a portal. Companies like Netscape, Yahoo and Excite competed for users; I remember having an account with quite a few of them while trying to figure out which ones was best. Luckily I chose My Yahoo, as it prevailed in that battle, (although with the advent of RSS, I’m now a Netvibes user). Netscape went on to become a Digg copy, and the others pretty much died off.

How about search engines? When you think search engine, many think Google. Once upon a time, Google didn’t exist, and the big players were Alta Vista, and even Excite. How many of the many search engines got bought up or simply went out of business? The market may be big, but not that big.

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Now when it comes to social networking, how many accounts can a single person have and adequately maintain? I can barely keep up with just a MySpace account, let alone a Facebook account as well. Do I really want or need to have a dozen? I just don’t think many of these companies that are trying to be the next MySpace or LinkedIn are going to succeed. And if they do start making some headway, then those bigger companies should be smart and eat them.

I give it less than a year before we start seeing acquisitions of social networking sites by other sosh-net sites.