The Netsize guide is a yearly comprehensive report on the state, structure, products and trends of the mobile industry. It’s a must read report if your interested in the way things mobile are going.

It addresses things like whether mobile advertising is finally making headway, whether the operators will become dumb pipes, whther the internet giants will dominate the mobile space, and much more.

The purported influence of the internet and digital has been said to be threatening the media landscape with enormous change for some time. But could it be that major shifts are now actually taking place?!

A few news items that recently caught my eye. The Lostremote blog reports an increase in the consumption of news online, a good thing, because The Media Guardian reports that not even the interest created by the stunning success of the British Olympic team in Beijing could prevent all the British quality dailies registering a year-on-year fall in circulation for August.

But theirs trouble on the advertising front. According to Techcrunch the decline in newspaper ad revenue is accelerating. Yes, and even their ad revenue online is decreasing.

In TV the situation is as dire. The Media Guardian reports that although event shows and soaps are holding up, the traditional UK TV peak time has been decimated.

But it is the layer beneath the top tier where ratings have collapsed and hit the average peak time share, defined as between 5.30pm and 11pm, of the main channels over the past five years. BBC1’s share of evening viewing has fallen from 27% in 2003 to 23.1% in 2008 to date. On ITV1 the decline is more marked – from 28.4% to 21.8% over five years. Among 16-to 34-year-olds it is steeper still. BBC1 fell from 23.9% to 17.1% and ITV1 from 23.6% to 15.6%.

This comes hot in heels of news of media entities that are making money.

Applications can make money. Some of those apps on Facebook are making money. (Yes, even the inane ones.) And so are some of the useful apps on the iPhone making decent returns in sales.

And there has been other more predictable news: Search based text advertising is making even more money. The advertising spend has not disappeared. It has moved.

The result? Google is not just withstanding the advertising downturn. Google’s search based revenues are still growing according to the Wall Street Journal. Even when other forms of online advertising (like those on newspaper sites mentioned above) declines.

Spending on Internet advertising is climbing at a healthy clip — rising 20% in the U.S. in the second quarter — and growth forecasts are strong despite the weak economy. But that growth isn’t being enjoyed by everyone.

It’s internet display advertising in particular that has taken a massive hit.

The gap is widening between spending on simple search ads, Google Inc.’s core turf, and spending on flashier display ads, which companies such as Yahoo Inc. and Microsoft Corp. had hoped to use to gain ground on Google.

Faced with a slowing economy, advertisers are sticking to what they view as the safest way to reach online customers directly: the plain text…

Another item of note. In line with the failure of online display ad revenue is the news of the failure of online video ad revenue. Even Google is not making much money from YouTube yet.

And Rhythm New Media (disclosure – I used to work for Rhythm), the groundbreaking start up that placed dynamically targeted ads around a number of UK operator’s mobile videos, has announced it’s pulling out of the UK. It’s worth noting that Rhythm has recently released a very succesful iPhone application in the US.

What to make of all this?

If your an advertiser – It’s been the case for some time that if advertisers wanted to reach young people, they could not really do so through TV. This trend is accelerating. This demographic is to be found online. Expect this trend to spread to older demographics sooner rather than later.

If your a brand owner one has to wonder how and where your going to advertise to build your brand. With TV audiences dwindeling and online growing the answer should be – on the net. But successful brand advertising is measured in reach (the amount of people who saw and add) and frequency (the amount of times they saw the add).

With online display advertising the former is hard. Users are often spread over thousands of websites, not a few TV channels. The later, how many times users have seen an add, can be even harder to achieve or measure. Unlike TV advertising which interupts and dominates TV viewing, web display ads rarely do. Have people really noticed your ads?

Perhaps it’s time to sponsor those large live events?

If your a creative type there’s reason to be worried. Particularly during this recession and particularly if your working in video. You might want to take a cource on search engine marketing and Google Adwords, but job satisfaction is unlikely to come with Google Adwords.

If your a new media agency specialising in flashy display ads, its time to consider moving into building apps or perhaps social media.

If your a newspaper or magazine or TV channel one has to wonder how one could arrest the steady fall of readership or viewers. How does one compete with the wealth, quality and immediacy of online content? How does one compete with the volume, quality and low cost of user generated content?

(Jeff Jarvis does make some suggestions as to how newsrooms will have to adapt.)

At least newspapers and magazines have a more clearly defined and more niche identity: A more rounded brand that can be leveraged online. TV stations do not. TV is supposed to be a mass medium. A prediction – TV stations are dying dinosaurs and will only survive to bring us mass live events.

In the previous post we explored how Social Networking sites normally have 4 different functions:

1. Networking;
2. Social;
3. Identity; and
   
4. Sharing

Now, by looking at four well know examples, I will illustrate how different emphasis on these functions differentiate Facebook, MySpace, LinkedIn and Second Life.

Second Life

Second Life is in fact a weak example of a Social Networking media property.

• This is primarily because it lacks Networking functionality (You have no friend or contact lists, where you can create ties or nodes and track their movements or interactions);
• It is however very big on Identity formation features (although this identity does not have to map to a real identity);
• It can be very social and users can build real & warm relationships;
• It also does have ’sharing’ functionality. (Just by being on Second Life you in fact become content! Everything you build is user generated content and therefore sharing.)

But because it tries to recreate reality and its users can not create ties or links (a buddy list) that allows them to associate, track or interact with contacts it’s a social networking site without the networking.

What are the user behavior of Second Life users like? They tend to spend hours on SL, they tend not to use their own identity, but a fictional one. They tend to meet strangers and befriend these stranger’s fictional identities. They can just be or play or build stuff in Second Life. But what they do there tends not to have much of a bearing on what they do outside of SL.

LinkedIn

LinkedIn can be described as a very functional Social Networking site that’s lite on social functionality because:

• Is a Networking site in the business sense of the word, where people create ties to achieve a goal; (It has built its networking features strongly on so-called weak tie theory.)
• Does not contain much Social functions (Users not enabled to show their personality and build deeper personal relationships);
• Has basic and core Identity functions: A user’s real (but laundered to the extent that they can be sanitized of personality) identity is crucial;
• Little by way of ‘Sharing’ functionality (Although they have recently added Question and Answer functionality, which generates fantastic content);

LinkIn’s user behavior is quite different form SL.

“We focus on a few but high value moments” Reid Hoffman, LinkIn’s founder.

And thats exactly what happens. Many users only visit it when they are job hunting – once every few years. The users real identities are crucial, but they are stripped of any depth. It’s a corporate identity, an online resume of your career status and achievements. There’s little evidence of socialising on LinkIn and little functionality that encourages it. ‘Sharing’ is limited to gaining access of contact’s contacts (weak ties) and asking professional Questions and getting Answers.

MySpace

MySpace combines the 4 functions more equally that Second Life or LinkIn.

• It has very strong Social functionality that allows users to interact in a personal way;
• But it has Networking functions as well, that allows users to create friends or contacts through ties;
• User identity formation and expression, real or made up (and therefore often comprised of groups of people like bands), is extremely important, a user can completely customize a page to reflect who they are and associate with whom they want;
• ‘Sharing’ things like songs, pictures, videos and blog entries is key;

MySpace’s users come back to the site often and spend a reasonable amount of time on it. It has become very popular with bands and artists as a promotional tool. Anybody can see who your ‘friends’ are, and some users have thousands of them – so weak tie theory applies.

“Andy Warhol said everybody is famous for 15 minutes. Social Networking changed that to everyone is famous for 15 people. If you have a million friends, your broadcasting. You’re an entertainer” – Tom Anderson (MySpace)

Facebook

Like MySpace Facebook applies the 4 core functionalities associated with social networking more evenly. It has:

• Very strong Networking functions, without ‘Friends’ you literally have nothing to read, see or interact with. Facebook is built on strong interpersonal ties;
• It has allot of functionality that makes it very Social and allows personalities to to be on display. Poke!
• User Identity functionality is paramount, made up identities are virtually useless (pun intended);
• ‘Sharing’ is crucial (Users can share almost everything, their every Facebook move is UGC. UGC that is delivered to their ‘friends’ via a personalised feed);

Facebook’s user behavior is very interesting. Most users visit the site at least daily, but often for less than one minute. Besides the importance of real Identities and Facebooks strong and deep ties (versus MySpace’s weak ties), the main difference between Facebook and MySpace is in the clever exposure given to ‘sharing‘ via its Personal Newsfeed function.

“You can’t create communities, you can just find them” – Mark Zuckerberg (Facebook)

All this explains why Facebook has been so successful. As Jeff Jarviss said, it harnesses “the wisdom of your crowd“. But it’s not suitable for all Social Networking needs, because it militates against discovering new people and therefore new things. It’s also doubtful whether it would have bee so successful without it’s revolutionary Personal Newsfeed.

Conclusion

Facebook and MySpace share almost all their key features, and LinkedIn shares some with them, but the differing implementation of the 4 elements has yielded very different user behavior.

So when planning a Social Networking site ask yourself:

• To what extent should the users form relationships or ties?;
• Should they be weak or strong?
• To what extent should the site allow socializing?; and
• To what extent should users be able to express their identity; and
• Should this identity be real?
• What content do you want your users to generate?
• And how do users find out of new UGC content that might interest them?

Notes:

Ties

One can not have Social Networking site without two-way ties built into the architecture. The ability to communicate and interact is not enough (See Second Life), although users can still build ad hoc relationships without this functionality.

Building ties into the architecture requires permissioning functionality. Even when one does have permissioning to create ties, how one implements the use of ties leads to wildly divergent outcomes. (See the huge difference between LinkedIn and MySpace.)

Weak ties

Interpersonal ties, generally, come in three varieties: strong, weak, or absent. Weak social ties, it is argued, are responsible for the majority of the embeddedness and structure of social networks in society as well as the transmission of information through these networks. Specifically, more novel information flows to individuals through weak rather than strong ties. Because our close friends tend to move in the same circles that we do, the information they receive overlaps considerably with what we already know. Acquaintances, by contrast, know people that we do not, and thus receive more novel information from them.