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June 28, 2011

Facebook Domination Vs MySpace Fall : Data Comparison

Today Facebook is the 4th largest U.S. web property in audience size with 157.2 million visitors in May, representing its all-time high and a gain of 3.2 million visitors vs. the previous month. While other reports have been circulating that Facebook witnessed a pronounced user decline this month,

Latest ComScore data shows quite a different story. Given that Facebook now reaches 73% of the total U.S. Internet population each month, one thing we should anticipate is that the site’s audience cannot grow forever.

The law of large numbers says that once a site has penetrated the majority of a market, each incremental user becomes that much more difficult to attract. So given its size, Facebook’s future U.S. growth is likely to come more from increasing usage per visitor than its ability to attract new users in perpetuity. One impressive stat to note is that Facebook’s average U.S. visitor engagement has grown from 4.6 hours to 6.3 hours per month over the past year, so it appears to be succeeding in that regard.

While social networking continues to gain market share, what is interesting is the rapidly changing dynamics of the market today. For a long time, the social networking story was almost exclusively the horserace between Facebook and Myspace. In mid-2009 Facebook finally darted out ahead of Myspace and hasn’t looked back.

With each passing month it seems that social networking becomes more deeply ingrained into our digital lives. If we take a look back at the past few years we can see just how pervasive it has become. Back in 2007, social networking represented about 1 out of every 12 minutes spent online, while today it accounts for 1 out of every 6 minutes spent online.

According to Businessweek in its latest story on  Social Networking (
The Rise and Inglorious Fall of Myspace)  

While Myspace was  starting to flounder specialized social media companies began targeting Myspace customers. Tumblr offered an eloquent environment for self-expression. Twitter introduced a more efficient way of broadcasting ruminations to strangers. "Myspace had the right idea, where a band would have 900,000 friends," says Kent Lindstrom, the former CEO of Friendster. "That's what became Twitter. Myspace spent all their time working on tools around that, like media players, playlists, video. It turned out you didn't really need all of that."

Mark Zuckerberg's Facebook, meanwhile, introduced more sophisticated tools for communicating with users' real-life friends, through a clean, ad-free interface. "Facebook did a fantastic job of hiding behind the panic around Myspace and basically saying, 'We're totally safe,' " says Boyd.

Myspace's inability to build an effective spam filter exacerbated the public impression that it was seedy. And that, says Boyd, contributed to an exodus of white, middle-class kids to the supposedly safer haven of Facebook—a movement she compares to the "white flight" from American cities in the second half of the 20th century. Myspace was becoming Detroit (  You can read their  Coverage of  Facebook and MySpace here)

At its December 2008 peak, Myspace attracted 75.9 million monthly unique visitors in the U.S., according to ComScore (SCOR). By May of this year that number had dropped to 34.8 million. Over the past two years, Myspace has lost, on average, more than a million U.S. users a month. Because Myspace makes nearly all its money from advertising, the exodus has a direct correlation to its revenue. In 2009 the site brought in $470 million in advertising dollars, according to EMarketer. In 2011, it's projected to generate $184 million
MySpace was the largest social networking site used by people all over the world before Facebook came in existence on 04.02.2004. But Now Facebook has more than a 500 million (Half a billion) users.  So why was Facebook able to grow into such a big company and MySpace could not? The below infographic presented by FlowTown explains all the reasons to the above questions