Is Really That Popular?

ByABC News
February 22, 2006, 4:21 PM

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.