Is Really That Popular?


Feb. 22, 2006 — -- There's been a lot of news recently about the popular social networking Web site

Questions have been raised about safety risks for its many teen users, the possibility of identity theft and a whopping $580 million deal that made Rupert Murdoch the site's owner.

But is MySpace truly worth the half billion-dollar price tag it generated, or is it a flash-in-the-pan fad that may not survive its own success?

All this week, ABC News Radio takes a close look at the popular and controversial You can hear these reports on your local ABC News Radio affiliate; check local listings.

"Certainly there are a large amount of people spending a large amount of time on this site," said Nate Elliot, an analyst for Jupiter Research. "When you look at the huge numbers they throw out there -- 50 [million], 60 million registered users -- those are a mirage."

Elliot admits that the site generates a lot of activity, and that it may indeed have tens of millions of registered users, but those numbers can be deceptive and only tell part of the story.

"They're promoting the number that is most advantageous for them to promote, but the simple fact is that only a fraction of the registered users ever go back," said Elliot. "And only a fraction of them use the site on any kind of regular basis, and then another fraction of them are responsible for the traffic."

According to the most recent survey, he said, 12 percent of Internet users in the United States say they're registered at an online networking site.

But more than half say they don't go back. Only 18 percent -- one in five -- of the registered users say that they visit networking sites weekly or more often.

That means that despite having large numbers of registered users, only a portion of those are active participants on the site.

"The reality is you can get a lot of people doing something without it being a major trend," he said.

Still, he says, there are plenty of very attractive advertisers willing to lay down large amounts of cash to get their message out.

However, Elliot doesn't think this situation will last due to the absence of active members.

"I wonder how interested they'll [advertisers] be in reaching the same small group of users, thousands of times a month," he asked. "Because that's not how advertisers like to spend their money."

For teens who are always looking for the next cool thing, MySpace was it -- for a while.

Now, Elliot says, it's cooled off and his theory is that it has the media to thank for it.

"People go there thinking it's cool -- it's nearly impossible to maintain 'cool' in a vacuum, certainly once they start seeing themselves on the 6 o'clock news," he said. "If time doesn't kill cool, then a network anchor will."

It's the attraction to what's not in the mainstream that often draws kids in, and Elliot points out that the abundance of press and buzz surrounding MySpace has hurt its 'cool' factor.

He points to the rise and fall of another popular social networking site, Friendster.

Part of what killed Friendster according to Elliot, was its own success. Once everyone knew about it, no one wanted to hang out there.

"Once you start showing up in Newsweek, and one of the largest media companies in the world pays half billion dollars for you, it's kind of hard to maintain that 'street cred,'" he explained. "Kids will find something else that has street cred and move on to that, and I don't know what that is and if I did, the fact that I knew about it, would probably kill it."

A representative for MySpace said the models of earlier social networking sites used in Elliot's analysis did not apply to MySpace.

"MySpace has grown at an unprecedented pace," she said, and any notion it will "flame out is absurd."

She said figures from Internet audience measurement service comScore Media Metrix placed the Web site only behind Yahoo! in terms of page views and that the number of unique users is currently at 35 million, up more than 40 percent since 2005.

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