Social Networks Splinter

The Wall Street Journal wonders today whether the social networking world is beginning to splinter. [Registration required.]

Last month, Piczo attracted 10.2 million unique visitors, compared with Facebook's 15.5 million visitors, according to comScore World Metrix, a Web-tracking division of comScore Networks Inc. Piczo is also the No. 1 social-networking site in Canada, according to Chief Executive Jeremy Verba. The site's success has puzzled even its own founder, former software developer Jim Conning. "I didn't wake up one day and say, 'I'm going to start a Web site for teenage girls,'" the 40-year-old says.

The rise of these social-networking sites is another sign of the shifting tastes on the Internet, as niche audiences flock to new alternatives to MySpace and Facebook. That potentially spells trouble for those two incumbents.

The proliferation of these social-networking sites also comes as deal-making in the sector heats up. Big media and Internet companies, eager to gain more access to the young people who gravitate to social-networking sites, have recently eyed companies like Facebook. Facebook is in serious discussions to sell itself to Yahoo for an amount that could approach $1 billion. And last year, Rupert Murdoch's News Corp. bought MySpace for $650 million and quickly turned the site into a lucrative ad and promotional machine.

For now, however, the new sites are taking a modest approach to attracting visitors. Instead of trying to get people to ditch their MySpace and Facebook accounts, they're persuading kids to sign up for a third or fourth social-networking site, along with the ones they already use. "People used to pop up and say, 'We're a better MySpace,'" says Ben Bajarin, an analyst at the Campbell, Calif., research firm Creative Strategies Inc. "Now, all those sites have started to say, 'Well, we can't displace MySpace -- but we're complementary to MySpace.'"

This kind of evolution is inevitable, as the proliferation of cable television channels suggests, and it was one reason why we decided to invest in Real Girls Media, a digital network created by women for women. (There were many other reasons, of course, the principal one being our faith in Kate Everett-Thorp, RGM's CEO.) Glam - through its GlamSpace offshoot - also appeals to a very targeted niche of consumers who are interested in fashion.

Yes, there are too many social networks, but many of these are taking a completely undifferentiated approach to the market. A large number of these sites are chasing the same gaggle of high school and college students who are perfectly happy using MySpace and Facebook. RGM and Glam are definitely taking a different approach.