According to circulating rumors, MyYearbook is in the process of raising a huge round of funding. If you read my recent post comparing the demographical data of the top social networking sites, this should not surprise you. Sure MyYearbook is experiencing large growth but my bet is that’s not the primary reason why investors may have such confidence in it. The Compete graph below provides us with some great insight to this and why MyYearbook pwns Facebook and MySpace.
As you can see, MyYearbook’s average stay (number of minutes an average visitor spends on a site during each visit) time is greater than that of MySpace and Facebook. Furthermore, MyYearbook is seeing much more yearly growth for this metric: MyYearbook (20.3%), Facebook (13.3%), MySpace (-18.9%). Obviously MyYearbook appears to be doing a better job of catering to its specific user base to garner more engagement.
Additional reasons as to why MyYearbook may be getting more engagement from its users may have to do with user demographics, specifically age, income, and education level. According to the latest Quantcast data (May 2008), the percentage of users 17 years of age or younger is as follows: MyYearbook (56%), Facebook (36%), MySpace (33%). Why does this matter you ask? Well, considering most kids 17 and under don’t work full-time jobs and tend to have more available time to socialize with their friends online, it matters a great deal. The more time a user spends on your site, the greater potential for them to create revenue for you. Income and education level may also provides some explanation as to why MyYearbook is crushing Facebook and MySpace for this particular metric. As I alluded to in my previous post, there appears to be a negative relationship between income/education level and he amount of time users spend on a given site. Thus less educated individuals with lower incomes will spend more time on a given social networking site than the more educated and wealthier users.
The integration of games and/or game-like tactics for furthering social interaction between members may also be driving MyYearbook’s growth for user engagement as well. Web based games, specifically socially driven online games, do very well in terms of user engagement. For example, take a look at this chart from Flowing Data indicating the strength for gaming and fun based activities on Facebook.
Albeit MyYearbook doesn’t have an open platform for developers to create applications yet, the creators have successfully integrated socially motivated game-like tactics into their site through their points based awards system and features like OWNED!, Battles, and Match. Whether these tactics may be an integral part of MyYearbook’s future business model and whether that is what’s driving the rumored investor buzz over MyYearbook is yet to be known.
Regardless of the rumored investor buzz, however, the high school focused social network MyYearbook is clearly doing a much better job of engaging their user base than the more ambiguous and less user targeted sites like MySpace and Facebook. Perhaps this provides more weight to the notion that niche sites (e.g. Ning), which are designed specifically for their targeted user base, are destined to be the next generation of online social networks.
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I disagree with your statement “The more time a user spends on your site, the greater potential for them to create revenue for you” because I do not think it translates directly into revenue. Instead, I think it depends on a user’s characteristics. For instance, high school kids are not making online purchases and may not even own a credit card. Thus, their ad clicks are not going to generate money for advertisers. On the other hand, their high level of engagement is good for branding or raising awareness (e.g., for movies). I believe that an adult that is on LinkedIn for 3 minutes that clicks an ad is more likely to result in an online purchase. Important to note, I have no data to back up my thoughts.
Kevin reply on July 13th, 2008 11:08 am:
I totally agree with what you’ve said. I was making that comment based on a pure logical assumption that the more time a user is on a site the more potential for them to click on an ad (either accidentally or intentionally) and generate revenue for the site via PPC means. I agree that most young users aren’t going to have credit cards to make purchases on MyYearbook so affiliate sales commissions are not going to be a big source of income and that’s why I bet PPC and dedicated sponsorship advertisers that pay via CPM are probably their bread and butter for income. Indeed it looks like they have attracted ABC Family for sponsorship and are using DoubleClick/Google ads as well.