May 2008

John du Pre Gauntt,

Senior Analyst
jgauntt@emarketer.com
Mobile Social Networks
Debra Aho Williamson,
Senior Analyst
dwilliamson@emarketer.com

Executive Summary: Mobile social networking involves more than simply shrink-wrapping MySpace or Facebook
pages for mobile phones. It is without doubt one of the best opportunities for the entire mobile ecosystem to drive
mobile Internet use to levels comparable with online Internet use.
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eMarketer projects that over 800 million people worldwide will

Worldwide Mobile Social Network Users, 2007-2012
(millions) access social networks via their mobile phones by 2012, up
from 82 million in 2007.
2007 2008 2009 2010 2011 2012
Mobile phone subscribers* 3,078 3,417 3,697 3,894 4,150 4,275 Marketers, online social network sites, mobile carriers and
Mobile Internet users 406 490 596 757 982 1,228 mobile content providers all face enormous challenges to
Mobile social network users** 82 147 243 369 554 803 reach that potential.
Mobile social network users % 2.7% 4.3% 6.6% 9.5% 13.3% 18.8%
of mobile phone subscribers Marketers are trying to determine which digital marketing
techniques and ad units are relevant for the mobile social
Note: *data for 2007-2010 from European information Technology
Observatory (EITO), March 2007; **registered users (identified by their networking environment.
mobile number) who create, edit and view personal content using their
phone Meanwhile, online social networking players are discovering
Source: eMarketer, April 2008
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that extending into mobile might not be as easy as
they thought, given the flock of new mobile-only social
networking competitors.

Due to the data-intensive nature of social networking, mobile

carriers find themselves under increased pressure to offer
flat-rate, unlimited data plans without knowing precisely how
massive adoption of these plans will affect their businesses.

At the same time, mobile content providers are beginning to

look beyond their current model of selling content in favor of
The eMarketer View 2
ad-supported revenue and other types of indirect monetization.
Mobile Social Networking Users 4
Can Mobile Social Networking Jumpstart the
Mobile Internet? 8 Key Questions
Online Social Networking Goes Mobile 10 ■ What is mobile social networking?

Mobile Social Networking Pure-Plays 11

■ What is at stake for marketers with mobile social networking?
Mobile Social Networking Enablers 13
Related Information and Links 15 ■ How many mobile social networking users can marketers
expect by 2012?

■ How will mobile social networking impact the mobile industry?

■ Who are the key players?

The First Place to Look Copyright ©2008 eMarketer, Inc. All rights reserved.
The eMarketer View
Key eMarketer Numbers — Mobile Social Networks
4.3 billion Worldwide mobile phone subscribers in 2012, up
from 3.1 billion* in 2007
803 million Worldwide mobile social network users** in
2012, up from 82 million in 2007
18.8% Worldwide mobile social network users as a
percent of mobile phone subscribers in 2012, up
from 2.7% in 2007
Note: *from European information Technology Observatory (EITO), March
2007; **registered users (identified by their mobile number) who
create, edit and view personal content using their phone
Source: eMarketer, April 2008
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Marketers, online social networks, mobile carriers and mobile
content providers all face enormous opportunities and challenges
with mobile social networking.
Like the first days of the World Wide Web, the excitement over this
platform is palpable. However, as seen in the early Internet days,
no one involved in mobile social networking has yet cracked the
specific marketing proposition or figured out how to monetize it.
“It wasn’t until we rolled out m.myspace.com
that we got a sense of how powerful
demand was for MySpace on cellphones.”
—Brandon Lucas, senior director of mobile business
development for MySpace, in an eMarketer interview,
March 2008
eMarketer forecasts that over 800 million people worldwide will
participate in a social network via mobile phone by 2012, up from
82 million in 2007. This population will comprise current online
social networkers who are extending their digital lives to mobile as
well as a growing number of mobile-only social networkers.
Early reports suggest strong user demand for mobile social
networks. For example, MySpace recorded over 7 million unique
visitors to MySpace Mobile in the US in the six months since
launch, while Facebook claims 4 million unique registrations.
Mobile-only social networking players such as airG, Mocospace,
myGamma and itsmy.com all reported several million users soon
after launch.
Along with the rapidly growing audience, marketers are drawn to
mobile social networking because it creates a unique context in
which to promote their goods and services. It goes beyond simply
linking people with digital content by adding the immediacy of
sharing with friends—a very powerful marketing proposition.
However, trying to monetize mobile social networking with classic
banners or text links might prove more difficult than many
marketers think. The most pressing question involves how
marketers should effectively place ads in a sea of user-generated
advertising inventory.
Mobile Social Networks
“We have an incredible amount of this [social
networking] inventory and, in fact, it varies
quite a bit in how it all monetizes, based on
a number of factors, some of which we
understand, some of which we don’t. I don’t
think we have the killer best way to
advertise and monetize the social networks
yet. We’re running lots of experiments.”
—Sergey Brin, president of technology, Google Inc., fourth
quarter 2007 earnings call, January 31, 2008
Sergey Brin’s comment highlights the challenges Google faces in
the online social networking environment. Now expand that
inventory to over 800 million mobile social networkers in 2012—
many of whom have their own mobile profile page—and the task
of monetizing all that inventory with traditional online ad units
seems all the more daunting.
While it is unlikely that marketers will try to fill every mobile user
profile with ads, the amount of available advertising inventory in a
social networking environment—online or mobile—is far greater
than that of content-only Web sites. Page inventory on social
destinations will continue to grow much faster than marketers can
fill it. Even if only a tiny percentage of the 3 billion worldwide
mobile phone users take up mobile social networking, the
potential advertising inventory reaches mind-boggling levels.
Perhaps the biggest risk for marketers is the assumption that the
marketing model for mobile social networking will be the same as
on the Web. Of course, marketers will be placing text links and
banners in mobile social networking sites. They will also provide
sponsored tools for customizing profile pages as well as other ad
units specific to social networking. The interesting question will be
how those ad units are placed across all that new inventory. Will
they use today’s existing ad networks? Mobile social-specific ad
networks? Will they be placed by users themselves through some
sort of viral formula?
Trying to figure out the best model for creating value and monetizing
it in a mobile social networking session is only one of the hurdles
marketers must navigate. They must also understand how mobile
social networking affects the other two legs of the mobile
ecosystem stool—mobile content providers and mobile carriers.
2
The eMarketer View

For mobile content providers, mobile social networking presents
one of the last potential opportunities to push mobile content into
the mainstream. After a decade, the paid mobile content market
still makes up less than 5% of the mobile communications market.
Historically, the basic dynamic in mobile Internet has involved a
mobile user relating to content or commerce services via the
device. Given the inherent restrictions of screen size, battery life
and overall cost, it is not surprising that the mobile phone has
consistently fallen short as a content or commerce platform.
Mobile social networking is different because its value lies in the
audience itself. It turns the mobile device back to what it does
best—communication. Moreover, unlike a mobile content
storefront or a WAP media property, a mobile social networking
site leverages the network effect for both distribution and
discovery (i.e., users advocating certain content or experiences to
other users).
“Not only do mobile social networkers skew
disproportionately in their content
consumption, the network effect for
distribution inside a social network is huge
for mobile content.” —Shawn Conahan, CEO of
Intercasting, in an interview with eMarketer
Mobile social networking could hold even more potential for
mobile operators because it creates a voracious demand for
mobile data access. Not surprisingly, tie-ins between social
networking giants and mobile telecom giants are proceeding
apace. Vodafone, for example, works directly with both MySpace
and Facebook. For its part, Facebook launched a “do-it-yourself”
kit for mobile operators in February 2008. In Europe, Orange UK cut
an exclusive deal with social networking site Bebo.
Mobile social networking offers probably the best context for
users to transition to such behavior. But in doing so, mobile
carriers run the risk of having the social networking platform
combine all those separately charged services into one access
charge. The decision for carriers, therefore, is whether the
increased data access revenue from flat-rate plans is worth
allowing mobile social networking providers to introduce more
products and deepen their relationships with users.
Notwithstanding some legitimate challenges for marketers,
mobile operators and mobile content providers, no one can afford
to discount mobile social networking. Because it is grounded in
communications and sociability from day one, mobile social
networking represents a far more natural user case for mobile
data than many of its predecessors.
Mobile Social Networking Defined
eMarketer defines mobile social networking as
accessing and participating in a social network using a
mobile device. A mobile social networking user is
defined as a person who has registered a mobile
telephone number as the primary identifier of a mobile
social networking profile. A mobile social networking
site is defined as a mobile-accessible destination that
allows users to create and edit their profiles as well as
visit and comment on other profiles according to various
public/private rules. Mobile social network marketing
involves a brand interacting with mobile social
networking users on a mobile social networking site via
content, tools, messages, promotions or other marketing
collateral.

The true test of mobile operators’ willingness to embrace mobile

social networking will be the extent to which flat-rate mobile data
plans become competitive with flat-rate Internet access. All of the
mobile social networking players that eMarketer interviewed
listed flat-rate mobile data as a critical success factor. Otherwise,
mobile social networking will be a stunted opportunity if users
need to calculate how much they are paying for any given session.

Moreover, it is equally clear that for mobile social networking to

succeed, services such as picture and text messaging must be
part of the basic rate package. Therein lies the conundrum: If
mobile operators want to get past the mobile data ceiling of 30%
to 35% revenue from non-voice services, then they will need to
get their mobile subscribers to use their handsets almost
continually for content and messaging services—much as
broadband users no longer think about their volume of e-mail or
time spent on the Web.

Mobile Social Networks 3

Mobile Social Networking Users

eMarketer forecasts that by 2012 over 800 million Members of Mobile Social Communities Worldwide,
2006 & 2011 (millions)
users worldwide will access and participate in
2006 50
social networks via their mobile device, up from
2011 174
82 million in 2007. Although the total mobile
Source: ABI Research, Mobile Social Communities," December 2006
social network user base in 2012 will be under 079466 www.eMarketer.com
079466
20% of the worldwide mobile user population, it is In August 2007, Juniper Research estimated the number of mobile
likely that these users will have a social networking users would rise to around 600 million
disproportionate impact on marketing, media and worldwide by 2012. At the other end of the spectrum, Pyramid
Research projected in February 2008 that there would be 950
mobile communications because creating and million mobile social networking users by 2012.
sharing digital content (user-generated and
Mobile Social Network Users Worldwide, 2010 & 2012
professional) forms much of the social (millions and % of mobile phone users)
networking experience. 2010 300 (7%)

2012 950 (18%)

Worldwide Mobile Social Network Users, 2007-2012
(millions) Source: Pyramid Research, "Social Networking Goes Mobile" as cited in
"Analyst Insight," February 21, 2008
2007 2008 2009 2010 2011 2012
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Mobile phone subscribers* 3,078 3,417 3,697 3,894 4,150 4,275
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Mobile Internet users 406 490 596 757 982 1,228
Many of the early adopters of mobile social networking come
Mobile social network users** 82 147 243 369 554 803
from the current online social networking population. They look at
Mobile social network users % 2.7% 4.3% 6.6% 9.5% 13.3% 18.8%
of mobile phone subscribers
the mobile phone as an extension of their digital lives. Therefore,
while the current audience for mobile social networking is quite
Note: *data for 2007-2010 from European information Technology
Observatory (EITO), March 2007; **registered users (identified by their small, the potential is large based on the rising usage of online
mobile number) who create, edit and view personal content using their
phone social networking.
Source: eMarketer, April 2008
094335 www.eMarketer.com Over 44% of all US Internet users ages 3 and older (86 million
094335 people) will use online social networking at least once a month in
eMarketer looked at two main populations when creating its 2008. This figure includes people who visit social network sites as
forecast: users accessing social media via a mobile Internet well as those who use social networking features of other sites. By
session and those accessing it through messaging-based 2011, half of all US Internet users (104.7 million people) are
sessions. The first group uses WAP or XHTML browsers or expected to use social networking regularly.
dedicated mobile social networking applications like MySpace
Mobile, all of which ride on a mobile Internet connection. The
second group, which is more prevalent in some developing
economies, primarily uses messaging-based applications such as
SMS/MMS or instant messages.

For many social networkers in advanced markets, the ability to

port aspects of their social experiences online is a crucial part of
their acceptance of mobile social networking. However, for many
users in developing economies, just having a social profile in the
first place can be a major asset.

In December 2006, ABI Research published one of the first mobile

social networking reports, forecasting that mobile social
communities would reach 174 million users by 2011. This came a
few months after the initial launch of MySpace Mobile as well as
announcements from other online social networking powers.

Mobile Social Networks 4

Mobile Social Networking Users

Teens are much more likely to use social networking than adults. Social Networking Activities* of US Adult Mobile
In 2008, 77% of all US teen Internet users (15.3 million people) will Internet Users, Q2 2007 (% of respondents)
visit social network sites on a monthly basis. That number is Upload photos to a public Web site
projected to rise to 84% (17.7 million people) in 2011. By 44%
comparison, only 44% of US adult Internet users ages 18 and older
Post ratings/reviews of products or services
(69 million people) will use social networking in 2008. That number 42%
is expected to rise to 49% (85.1 million people) in 2011.
Publish, maintain or update a blog
39%
US Online Social Network Users, by Age, 2006-2011
(millions) Upload video created to a public Web site
2006 2007 2008 2009 2010 2011 38%

Children (3-11) 1.3 1.5 1.6 1.7 1.8 1.9 Add labels or "tags" to Web pages, online photos etc
Teens (12-17) 11.5 13.6 15.3 16.4 17.1 17.7 35%
Adults (18+) 47.5 56.9 69.0 76.3 81.3 85.1 "Vote" for Web sites online
Total 60.3 72.0 85.9 94.4 100.2 104.7 33%
Note: use at least once a month; includes general social network sites Use Twitter
where social networking is the primary activity; social network offerings
from portals such as Google, Yahoo! and MSN; niche social networks 29%
devoted to a specific hobby or interest and marketer-sponsored social
networks Note: *engaged in at least monthly
Source: eMarketer, December 2007 Source: Forrester Research, "Social Computing Goes Mobile," December
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Social networking is also popular outside the US. Worldwide,
109 million people, or 13% of all Internet users ages 15 and older, Equally important, the number of younger Internet users
visited MySpace in January 2008, while 101 million (12% of Internet employing social networks to communicate is climbing.
users ages 15 and older) visited Facebook, according to JupiterResearch and Ipsos published data showing that US Internet
comScore Networks. users ages 18 to 24 were significantly more willing than Internet
users as a whole to embrace multiple communication methods.
Worldwide Unique Visitors to Social Networking
Sites, November 2007-January 2008 (millions) Communication Methods* Other than E-Mail Used for
November December January
Personal Communication according to US Internet
2007 2007 2008 Users, September 2007 (% of respondents)
MySpace 104.5 107.2 109.3 18-24 25-34 Total
Facebook 92.8 97.8 100.7 Mobile phone - 87% 79%
hi5 31.1 31.4 38.3 Instant messaging 67% - 37%
Friendster 28.4 29.7 34.1 SMS/texting 44% 49% 27%
Orkut 25.0 25.1 26.9 Social networking sites 50% 32% 18%
Bebo 20.1 21.3 22.4 Note: *used in the past year
Source: JupiterResearch and Ipsos as cited by MediaPost, December 11,
Total Internet users worldwide 810.8 815.8 824.4 2007
Source: comScore Networks as cited on TechCrunch blog, February 27, 090522 www.eMarketer.com
2008 090522
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The correlation between online social networking and early-

adopter behavior in the mobile Internet seems strong as well. A
December 2007 study by Forrester Research suggested that a
significant number of current US mobile Internet subscribers were
also active online social networkers. Well over one-third of US
mobile Internet users engaged in typical social media behavior
such as tagging Web pages, uploading videos and photos, blogging
and posting reviews to public Web sites at least once a month.

Mobile Social Networks 5

Mobile Social Networking Users

Another clear trend is that social networkers are voracious Mobile Content and Application Activities of Mobile
consumers of media. Whether sending/receiving text messages, Subscribers in the US and Select Countries in
browsing on mobile devices or playing games, social network Western Europe, January 2008 (% of mobile
subscribers)
users interact far more than their non-user counterparts. An
France Germany Italy Spain UK US
October 2007 report from Ipsos Insight showed a near doubling of (n= (n= (n= (n= (n= (n=
mobile data and application use by social networkers for 12,783) 15,585) 13,059) 12,720) 15,259) 32,262)

categories such as SMS messaging and video games. Accessed downloaded 1.4% 2.3% 4.0% 2.4% 3.4% 4.7%
application
Accessed news/ 9.5% 5.5% 7.9% 7.5% 16.5% 13.1%
Mobile Phone Applications Used by Social information via
Networking Users and Non-Social Network Users browser
Worldwide, 2006 (% of respondents) Accessed social 2.2% 1.1% 2.3% 2.5% 4.7% 4.2%
networking sites
Sent/received SMS text
Listened to music 14.7% 15.9% 13.9% 21.1% 19.9% 6.7%
60%
25% Played downloaded 4.1% 7.5% 9.0% 12.3% 10.4% 9.0%
game
Sent/received e-mail Purchased ringtones 4.3% 3.8% 4.9% 3.9% 3.6% 9.5%
59% Received SMS ads 64.7% 31.1% 56.0% 73.1% 35.4% 19.2%
42% Sent/received photos 25.5% 22.1% 33.2% 31.7% 30.6% 21.9%
or videos
Browsed Internet for news/information
59% Used e-mail 6.3% 6.9% 10.6% 9.1% 9.4% 12.1%
39% Watched video 5.3% 2.8% 6.7% 8.1% 5.6% 4.6%
Note: based on three-month moving average for the period ending January
Sent/received digital pictures 31, 2008
54% Source: M:Metrics, Inc. as cited in press release, March 18, 2008
29% 093453 www.eMarketer.com
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Played video game
42% However, when the mobile social networking market was
17% segmented by device, the results were striking. The same
M:Metrics research looked at the correlation between US iPhone,
Social network users Non-social network users
smartphone and standard mobile phone users and their
Note: social network user n=998; non-social network user n=2,643
Source: Ipsos Insight, "Profile: Social Networker" as cited in press release, consumption of mobile content. While a little more than 4% of the
October 24, 2007 broad US mobile population accessed a social network via mobile,
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close to 20% of users with smartphones such as BlackBerry,
088789
Symbian or Windows visited such sites.
A broad look at mobile content habits was provided by M:Metrics
in March 2008. A three-month moving average survey of over
100,000 users in six countries indicated that between 1.1%
(Germany) and 4.7% (UK) of mobile users had accessed a mobile
social networking site during that time period.

Mobile Social Networks 6

Mobile Social Networking Users

iPhone users, however, were nearly off the chart in comparison.
Almost half of iPhone owners (49.7%) accessed mobile social
networking sites during the three-month period. iPhone users also
interacted more with other mobile content forms. Although
additional research is needed to show the relationship between
mobile social networking behavior and broad mobile content
consumption, it is reasonably clear that Apple scored points with
early iPhone adopters by making mobile social networking—
specifically Facebook—part of the standard package.
The frequency of mobile social networking site visits is only one
measure of the current state of play. Another involves how often
mobile users share user-generated content on their mobile
devices. A March 2008 study by 3ple-Media of 1,250 mobile phone
users, many of whom were members of online social networks
such as Facebook or LinkedIn, showed that 14% shared mobile
multimedia including photos, videos and audio clips at least once
a week. The pinnacle of sharing data at least once a day has not
yet been reached, according to the research.

Mobile Content Used by US iPhone, Smartphone* and Frequency with which Mobile Phone Users
Mobile Phone Subscribers, January 2008 (% of total) Worldwide Share Online and/or Mobile
iPhone Smart- Total
User-Generated Content, 2008 (% of respondents)
phone mobile Online Mobile
phone
Several times a day 12% 0%
Accessed news/information via browser 84.8% 58.2% 13.1%
Once a day 8% 0%
Accessed Web search 58.6% 37.0% 6.1%
Several times a week 23% 7%
Watched mobile TV/video 30.9% 14.2% 4.6%
Once a week 8% 7%
Watched on-demand video or TV programming 20.9% 7.0% 1.4% Several times a month 26% 11%
Accessed social networking site or blog 49.7% 19.4% 4.2% Once in a while 15% 42%
Listened to music 74.1% 27.9% 6.7% Never 8% 33%
Note: n=31,389; based on three-month moving average for the period Note: includes photos, videos and audio clips
ending January 31, 2008; *includes devices running Windows, Symbian, Source: 3ple-Media, "Making Multimedia Work," provided to eMarketer,
RIM or Apple operating systems March 13, 2008
Source: M:Metrics, Inc. as cited in press release, March 18, 2008
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Overall, the current mobile social networking user base has many
It is also important to note the frequency with which users interact
of the elements that allowed online social networking to take off.
with mobile social networking sites. Earlier research by M:Metrics
Current users of online social networking services want to stay
during June 2007 suggested that less than 1% of mobile phone
connected when they are away from a PC. They will be given
users checked mobile social networking sites on a daily basis. The
increasing opportunities to interact socially on the mobile, opening
more common behavior was to check in several times a week or
up new avenues for a mobile social networking killer experience
several times a month. (iPhone users were not part of this survey.)
to arise. For that to happen, a combination of user
experimentation plus some big changes in the way that mobile
Mobile Phone Subscribers in the US and Select
Countries in Western Europe Who Access Mobile data is experienced and charged for are necessary.
Social Networking Sites or Blogs, by Frequency of
Usage, June 2007 (% of respondents)
France Germany Italy Spain UK US
Almost every day 0.8% 0.5% 1.5% 0.7% 0.3% 0.7%
At least once 0.2% 0.4% 0.4% 0.6% 0.7% 1.1%
each week
1-3 times 0.7% 1.0% 0.9% 1.1% 1.4% 1.8%
throughout the
month
Ever in month 1.7% 1.9% 2.8% 2.3% 2.5% 3.5%
Note: n=103,457; based on three-month moving average for the period
ending June 30, 2007
Source: M:Metrics, Inc. as cited in press release, August 15, 2007
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Mobile Social Networks 7

Can Mobile Social Networking
Jumpstart the Mobile Internet?
Mobile Entertainment Revenues Worldwide, 2007 &
Mobile social networking stands a good chance 2012 (billions)

of jumpstarting mobile Internet adoption by 2007 $20.7

2012 $64.8
consumers because mobile social networking is
Note: includes games, music, TV, gambling, adult content and infotainment
based more on communication than content. Source: Juniper Research, "Mobile Entertainment Markets: Opportunities
and Forecasts, 2007-2012" as cited in "Mobile - Let Me Entertain You,"
Time and again, communication services have January 23, 2008
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led the way for content and advertising to follow. 091658

In the case of the Internet, it was e-mail and

Mobile User-Generated Content (UGC) Revenues
discussion boards—not Web pages—that Worldwide, 2007 & 2012 (millions)
triggered the explosion from early adoption to 2007 $576

mainstream consumer use. SMS services drove 2012 $5,740

mobile data use and they still account for the Note: includes personal content distribution, social networking, mobile
dating and chatroom services
Source: Juniper Research, "Mobile User Generated Content: Dating, Social
majority of mobile data revenues by carriers. Networking and Personal Content Delivery 2007-2012" as cited in "Mobile
Content from the Masses," August 13, 2007
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It is not surprising, therefore, that mobile carriers and mobile
086447
content providers have warmed to mobile social networking as a
Even with the most upbeat projections, paid mobile content is a
new opportunity to ramp mobile Internet use. In truth, they have
tiny market in comparison to revenues from communication-
little choice. Their attempts to convince the mass market to sign
based mobile services. In the US alone, mobile data service
up for mobile Internet have proved moderately successful, at best.
revenues (predominantly message-based) reached $23 billion in
According to February 2008 research by Informa, the global 2007, according to industry trade group CTIA—The Wireless
market for all current forms of paid mobile entertainment should Association. Mobile messaging for SMS/MMS/IM/e-mail
reach $31.7 billion by 2012. Back in 2006, the same forecast worldwide is expected to be between $100 billion and $200 billion
optimistically predicted $42 billion by 2011. by 2011. When voice traffic is included, the global mobile industry
is on track for almost $1 trillion in total revenues by 2012.
Mobile Entertainment Revenues Worldwide, by Type,
2007-2012 (millions) US Mobile Data Service Revenues, 2006 & 2007
2007 2008 2009 2010 2011 2012 (billions and % change)
Music $7,356.6 $8,478.3 $9,624.2 $10,634.6 $11,424.9 $11,956.2
2006 $15
Games $3,213.2 $3,994.4 $4,835.4 $5,654.8 $6,448.3 $7,244.2
Mobile TV $218.8 $533.6 $1,101.8 $2,027.6 $3,194.4 $4,393.7 2007 $23 (53%)
(broadcast)
Source: CTIA - The Wireless Association as cited in press release, April 1,
Mobile TV $532.1 $863.7 $1,135.3 $1,138.4 $813.7 $453.1 2008
(streaming)
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Video $1,536.5 $2,051.1 $2,625.8 $3,210.9 $3,800.6 $4,405.3 093731
Images $2,722.0 $2,886.7 $3,001.2 $3,036.5 $3,008.1 $2,943.5
Gambling $107.5 $134.9 $166.1 $198.9 $232.1 $263.0
Total $15,686.7 $18,942.6 $22,489.9 $25,901.6 $28,922.0 $31,658.9
Source: Informa Telecoms & Media, "Fast Facts for Journalists," February 8,
2008
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Juniper Research published a far more bullish outlook for mobile

entertainment in January 2008, projecting $64.8 billion worldwide by
2012. Earlier research by Juniper also tried to quantify the revenues
associated with mobile user-generated content such as chat room
services or mobile dating, predicting $5.7 billion for 2012.

Mobile Social Networks 8

Can Mobile Social Networking Jumpstart the Mobile Internet?

The stark reality is that mobile users are more inclined toward Mobile content is only half the story. The other half involves how
communications or task-centric interactions with their mobile consumers have adopted mobile communications services such
device than with content or entertainment. The UK’s Office of as camera phones.
Communications study of global mobile markets showed decided
One of the great technical success stories has been the
preference by users to engage in mobile data sessions that are
integration of cameras into mobile phones. According to
communications-oriented rather than information-oriented. Even
M:Metrics, nearly three out of four mobile phones in the UK have
in Japan, long the poster child for mobile information services, the
cameras, while In-Stat reports that 60% of US mobile phone users
primary use for the mobile device was e-mail (57% of users)
now sport handsets capable of taking pictures.
compared to mobile Internet access (20%).
US Mobile Phone Users with Camera Phones, 2006 &
Mobile Messaging and Internet Use by Mobile Phone 2007 (% of total)
Users in Select Countries Worldwide, October 2007 (%
of respondents) 2006 40%
Text Photo Access E-Mail*
messaging messaging Internet 2007 60%
via network
Source: In-Stat, "Camera Phones and Social Networking - A New Global
Canada 40% 2% 7% 7% Focus" as cited in press release, August 22, 2007
France 82% 33% 15% 12% 086742 www.eMarketer.com

Germany 87% 32% 7% 8% 086742

Italy 77% 40% 19% 16% One problem remains for carriers. The huge installed base of
Japan 17% 7% 20% 57% camera phones has yet to ignite a commensurate market for
UK 81% 33% 16% 10% MMS. Even in Europe, the reigning MMS champion, the market
US 44% 10% 11% 9% remains a little more than half the size of SMS even though mobile
Note: ages 18-64; *excludes SMS operators have pushed the service for more than five years.
Source: Office of Communications (Ofcom) - UK, "The International
Communications Market 2007" conducted by Synovate, December 12,
2007 Mobile Messaging Applications Used by Mobile Users
090810 www.eMarketer.com Ages 12-24 in the EU-7, Q2 2006 (% of respondents)
090810
Send SMS text messages 96%
A January 2008 study of UK mobile phone users also shows
consumers’ preference for using their mobile handset for Send MMS messages 55%

communications and tasks rather than media and transactions. Send or receive e-mail 21%
Webcredible, a UK consultancy that focuses on how users Note: n=6,064; includes Italy, France, Germany, the Netherlands, Spain,
access and use mobile services, surveyed 1,000 UK mobile Sweden and the UK
Source: Forrester Research, "Teleconference: Mobile Advertising in
phone users about the mobile content they most desired. A full Europe," June 15, 2007
58% of the respondents picked e-mail and social networking as 085893 www.eMarketer.com
085893
their top choices.
The upshot for mobile carriers and mobile content providers is
Mobile Content Most Desired by UK Mobile Phone that they need a new context in which to pitch mobile data access
Users, 2008 (% of respondents) to users. Without a compelling incentive for users to sign up for
Travel information/ mobile data access, it is likely that mobile carriers will see their
planning Online
13% shopping mobile data revenues jump sharply at first and then start to stall at
9% around 30%, as was the case in Japan. Mobile social networking
E-Mail
33% potentially could not only push mobile data access over that
hump, but could pull in other communications services to a social
Local information/
what's around networking session.
you Social
20% networks Mobile content providers also need a relaunch to jumpstart their
25%
business. To date, mobile content is generally considered difficult
to find as well as inferior in quality to other media channels—a
Note: n=1,010
Source: Webcredible as cited in press release, January 18, 2008 reputation that is somewhat deserved. Mobile social networking
091601 www.eMarketer.com offers a new environment for content discovery through
091601
recommendation as well as distribution via the network effect.

Mobile Social Networks 9

Online Social Networking Goes
Mobile
While mobile carriers and content providers
wrestle with just what mobile social networking
means to them, the big guns of online social
networking have spent the past several years
testing it out.
In 2007, for instance, Orange UK began working with Bebo to offer
Bebo Mobile directly to Orange customers. Other online social
network players such as LinkedIn and Friendster have created
mobile versions of their sites to draw in professional networkers.
In aggregate, these moves confirm the trend that online social
networks must have a mobile version.
For marketers, the big question will be how the two social
networking giants, MySpace and Facebook, approach
mobile because of their huge installed user bases and top-tier
brand relationships.
MySpace
The starting gun fired in 2006 when MySpace announced its
mobile version with AT&T. The current MySpace Mobile lets users
invite friends, upload photos or change their status directly from
their mobile phones. Over the next few years, the company
expects to generate a significant portion of its overall traffic from
mobile devices.
“We’ve had over 7 million unique visitors to
MySpace Mobile in the US between
September 2007 and March 2008. Currently,
we have about 1 million daily unique visitors
to m.myspace.com.” —Brandon Lucas, senior
director for business development, MySpace Mobile, in an
interview with eMarketer
MySpace Mobile’s numbers pale when placed next to the
100-million-plus monthly users of the MySpace online site. However,
given that the growth took place over a six-month period and
involves the very earliest adopters, marketers would do well to track
MySpace Mobile growth as a proxy for the opportunity as a whole.
The typical user activities on MySpace Mobile include viewing and
responding to mail messages and viewing profiles, photos and
profile comments, according to Brandon Lucas, MySpace Mobile
senior director for business development. “The page views are
high, as is engagement,” he said.
Mobile Social Networks
In terms of ad units, MySpace Mobile has standard mobile
banners at the top of the page, which are served through direct
campaigns MySpace sells itself or through ad network partners.
There are currently no other ad units, although MySpace Mobile
does offer SMS alerts and will be moving into mobile video later
this year.
Being the biggest player on the online social networking block has
advantages as well as constraints. MySpace arrived in the market
with existing relationships with third-party ad networks and
marketers. However, with the low entry barriers to mobile social
networking, giants like MySpace are constantly on the lookout for
specialized competitors.
“We’re not going to say that other types of social networking
aren’t going to pop up that are going to be compelling on mobile,
because they are,” said Mr. Lucas. “They will need to be free.”
Facebook
Facebook appears to be taking a page out of its online developer
strategy. In an interview with eMarketer, Jed Stremel, director of
strategy for Facebook Mobile, noted that the February 2008 launch
of Facebook for Mobile Operators marked one of the first terms-
of-service agreements between a Silicon Valley company and the
mobile community.
In essence, this means that any mobile operator of any size can
enable Facebook on their network simply by hooking into the
Facebook for Mobile interface and agreeing to a standard terms-
of-service agreement.
“We developed this model after doing around
12 to 15 direct deals with mobile operators
around the world. We distilled the
knowledge gained into a set of fundamental
services that any operator would need to
offer Facebook services on their network.
We then made those services available
through an open interface with a standard
contract.” —Jed Stremel, director of strategy for
Facebook Mobile, in an interview with eMarketer
Along with its Facebook for Mobile Operators initiative, the
company has also worked to port the Facebook platform to some
specific smartphone devices. Facebook for BlackBerry has
reached 600,000 registrations with around 150,000 daily users as
of April 2008. Overall, Facebook counts about 4 million total active
users of its mobile services.
10
Online Social Networking Goes Mobile
According to Mr. Stremel, it is important not to view mobile as a
separate silo with its own revenue stream. “The Facebook
platform empowers other applications with social data so they’re
more useful,” he said. “People can find the connections and
applications they want more easily on the basis of their social
graph. So we’re not trying to create silos but make Facebook as
flexible as possible, which undoubtedly includes mobile.”
Mr. Stremel stressed that Facebook’s revenue programs are Web-
based, with the focus on growing as much as possible in
aggregate. The company is not speaking to advertisers about how
to use mobile as a marketing medium in a social networking
environment yet. Instead, the goal is more about how to make
advertising on Facebook as relevant as possible regardless of how
the user accesses it.
Mobile Social Networks
Mobile Social Networking
Pure-Plays
MySpace Mobile, Facebook Mobile and the rest of
the online social networking leaders are not the
only players in the mobile social networking
market. Numerous mobile-only or mobile-centric
social networking companies have launched
since 2006.
The following sites represent a sampling of the mobile social
networks currently jockeying for position. There are some mobile
social networking sites that look to monetize their user base
through subscriptions, selling virtual goods or supplying virtual
currency paid for with real currency. However, they are in the
minority. Like their bigger online social networking cousins, the
majority of mobile social networking sites look to advertising to
support the user experience.
It is still too early to declare a definitive advantage for pure-play
mobile social networking versus the mobile social networking
activities of the top five online social networks. While the bigger
online players have advantages with marketers in terms of scale
and familiarity, mobile right now is an adjunct business for them,
which could result in less-than-stellar user experiences. The pure-
play mobile social networking companies offer extreme focus at
the cost of scale during 2008.
Internet history is replete with successes and failures of both
pure-play and extension-based business strategies. For 2008 at
least, marketers would do well to hedge their bets until dominant
trends surface.
airG
Based in Vancouver, airG has aggregated a global user base of
over 20 million users in a host of mobile social networks through
interconnection with over 100 mobile operators in 10 languages.
airG acts as a white-label mobile community operator for its
operator and advertiser partners.
In Latin America, for example, the company announced an
October 2007 agreement to cover 19 million mobile users reached
by Telefonica’s Movistar brands of mobile data service in Ecuador,
Peru and Venezuela. Custom-branded as Conexion Latina, the
service allows Spanish-speaking friends and peers to express
their personalities using integrated community features like photo
profiles, instant messaging, photo and video sharing, blogging and
user search.
11
Mobile Social Networking Pure-Plays
airG co-founder Frederick Ghahramani told eMarketer that the
typical user profile for perhaps the largest single mobile social
networking destination did not quite fit the marketing stereotype
of a global hipster.
“The majority of customers spend more than
an hour a day in the community. Nearly 60%
don’t own a PC. Six in 10 have at least a high
school education. The average annual
income is $41,000, and the five most popular
handsets used to access airG all retail for
less than $100 with a service contract.”
—Frederick Ghahramani, co-founder of airG, in an
interview with eMarketer
This is not to say that airG is going after developing markets
exclusively. The company worked with Boost Mobile and West
Coast Customs to run one of the largest mobile marketing
campaigns through a mobile social networking.
Between October 15, 2006, and January 15, 2007, more than 1.5
million entries were received for the Get Hookt Up With A New
Ride campaign, which offered Boost Mobile customers the
opportunity to win a new, fully customized Dodge Charger. More
than 98% of the entries were received through mobile phones via
the Boost Hookt mobile community. The rest came from retail
mail-ins, a national radio text-to-join campaign, and online sign-
ups promoted through MySpace viral referrals and the West Coast
Customs Web site.
Mocospace
Mocospace is a mobile social network based in Boston. According
to its founders, Mocospace was launched around the
convergence of three main trends: mobile Web, social networking
and mobile advertising. In March 2008, Mocospace listed 2.6
million registered members, adding around 10,000 new members
each day.
“The feature set we have today is very
similar to the feature set when we
launched. Our sweet spot for users is 17 to
24, with an average age of 21. Our user base
is 90% North America, with about one-third
of that being Hispanic.” —Justin Siegel, CEO of
Mocospace, in an interview with eMarketer
Mobile Social Networks
The most popular site areas include finding friends, chat, instant
messaging, inbox messaging, and uploading or viewing member
photos, according to Mocospace CEO Justin Siegel. Mocospace
boasts a near-equal gender distribution, as opposed to the majority
of online social networks, which tend to skew more female.
Mocospace works with third-party mobile ad networks such as
Millennial Media or JumpTap to sell its ad inventory. The company
plans to start working directly with brands and agencies in late 2008.
The groundwork has already been laid for mobile advertising on
the site. Users are accustomed to seeing banner and text ads on
their mobile profile pages as part of keeping the service free,
according to Mr. Siegel. “I’ve had e-mails from people participating
in a social networking experience in which we don’t have any
specific inventory coming back to ask if we’re getting ready to
start charging for Mocospace,” he said.
itsmy.com
Even though it is based in Munich, the mobile social networking
user base of itsmy.com reaches well beyond Europe to include a
sizeable chunk of the US. “We have very healthy user numbers in
places like Dallas and Cincinnati,” said itsmy.com founder and
COO Sabine Irrgang.
itsmy.com started in 2003 with mobile user-generated content. The
site offered community services in 2006, and now has a total user
base of over 2.5 million. Following the YouTube model in which
users are not required to register to view content but must do so in
order to upload content, itsmy.com counts about 1 million mobile
social networking uploaders in its user tally. Uploaders have
generated over 5.7 million pieces of content such as pictures,
videos and audio files that populate over 4 million personal mobile
domains (for example, http://username.itsmy.com), resulting in
over 500 million page views per month.
Unlike MySpace.com, Facebook, Bebo and the like, itsmy.com is a
mobile-only social network that requires all of its registrations via
the mobile device.
“The primary way people upload content is
via MMS. That way, we are 100% sure that
you used a mobile phone instead of a PC. If
we see a 640X480 high resolution photo
coming over the network, there’s a good
chance that it’s copyrighted material
because no current mobile phone records at
that level.” —Vince Stabyl, CEO of itsmy.com, in an
interview with eMarketer
12
Mobile Social Networking Pure-Plays
The mobile-only orientation is for more than simply keeping the
content industry happy. It also allows itsmy.com to offer more
targeted advertising to marketers. Advertisers work with
itsmy.com mainly to sponsor rich media experiences for the
mobile social networking users.
The Ford Motor Company highlighted its new Ford Focus
automobile on itsmy.com via portal branding. Ford ads appeared
in the title and header; it also sponsored picture and video blogs,
offered personalized wallpaper for itsmy.com users to
save/share/publish/send and seeded mobile TV ads among users
who had video-capable phones.
According to the company’s founders, the sweet spot of mobile
social networking advertising is not the same sort of banners that
might run on online social networking sites.
“For a brand like Nike, it’s not really interesting to be making
banners just for people to click on,” said Vince Stabyl, CEO of
itsmy.com. “They would rather run campaigns that allow a user to
take a picture of their favorite shoe and send it back to Nike’s
microsite on itsmy.com that might be running a contest for users.
Then Nike can see what shoes people are wearing and how they
are customizing them. It’s branding, distribution and research
wrapped all together.”
myGamma
Nearly all of the members of myGamma—a mobile-only social
network available in 60 countries—do not have Internet access.
Members can create WAP sites, create profiles, write blogs, read
and comment on others’ profiles and play games with each other.
In fall 2007, parent company BuzzCity surveyed 875 myGamma
members in countries such as Thailand, India and Romania, as well
as the UK and the US. Members access mobile social networking
often: 90% reported visiting at least once a day, and more than 50%
said they logged on at least five times a day. Nearly two-thirds (62%)
said they spent at least half an hour a day on myGamma.
In a counter-intuitive finding, more than 80% of respondents said
they are at home, at a desk or at work when they access mobile
communities. While this may be because many members do not
have Internet access, it presents evidence that not all mobile
social network users are on the go when they are actively using
their social network.
As with other mobile social communities, communicating with
friends is the key activity on myGamma: 75% said that is why they
use the social network. But purchasing products and services is
also popular: 35% have bought something online via the
myGamma service, most often virtual goods to give to friends.
Mobile Social Networks
Mobile Social Networking Enablers
Mobile social networking is not the sole domain of
startups or established online social networks.
Companies such as Nokia, Yahoo! and Intercasting
Corporation are also trying to stitch Web-based
social communities to mobile networks.
Ovi from Nokia
Nokia announced in August 2007 that it would fold most of its
Internet services under the Ovi (Finnish for “door”) umbrella. The
goal was to provide a single stop for consumers to access their
existing social network communities and content, and also act as
a gateway to various Nokia services.
The first three Nokia properties under the Ovi brand were Nokia’s
Music Store, its N-Gage gaming service and Nokia Maps. In February
2008, the company announced a new service, Share on Ovi, which
allows users to organize and share their photos and videos across
social networks and their mobile phones. Based on technology and
management obtained through the acquisition of Twango, the Share
on Ovi service allows users to manage and share still pictures and
video content through their phones or online.
Ovi marks a delicate balancing act for Nokia in its quest to
re-invent itself as an Internet services company rather than a
mobile product company. On the one hand, it cannot afford to
radically upset the mobile operators that form the core of its
current market. However, as more value flows to the edge of
mobile networks in the form of services instead of specific
handset technologies, it cannot ignore its potential reach of well
over 600 million Nokia mobile phones in the hands of users.
In that sense, the various Ovi properties might be considered the
building blocks of a mobile social network.
Yahoo! oneConnect
Yahoo! announced its oneConnect service at the February 2008
3GSM show in Barcelona. oneConnect positions itself as the first
mobile product that combines all major non-voice
communications services—e-mail, instant message, SMS and
MMS—with a socially connected address book, which allows
users to integrate activity from popular social networks,
professional networks and communities into their address book,
keeping it in sync.
According to the company, users will be able to view status
updates, photo uploads and recent activity of their contacts
across any of their social networks from the mobile phone’s
personal information manager.
13
Mobile Social Networking Enablers

Another feature called Pulse allows users to see an overview of

what their friends are doing, including recent photos, status,
profile updates and recommendations based on their most recent
actions on a social network.

The oneConnect service also allows users to create a social

contact card that aggregates the most relevant information about
any given address book contact, including archives of past
communications, detailed Pulse history and one-click means to
initiate communication.

oneConnect will launch as part of the Yahoo! Go 3.0 suite of

mobile services during Q2 2008. It is perhaps one of the most
aggressive moves yet by the company to stake out serious ground
in mobile.

Intercasting Corporation
Many mobile social networking users expect to toggle between
their Web-based experience and their mobile experience with
minimum friction. Companies like Intercasting are working
furiously to connect the function and feel of online social
networks to mobile networks

A Facebook user, for example, might expect to be able to “poke” a

friend on mobile, just as they can do online. But to mobile
operators and handset manufacturers, it might not make sense to
build a separate “poke” function given that they have MySpace,
Bebo and other customers as well. Intercasting sits between
those networks to coordinate all of that feature/function
proliferation as online social networks roll out more ways for
people to interact socially.

The current social networking user model—in which someone

uses a browser to access a profile—is mutating, according to
Intercasting CEO Shawn Conahan. In the future, social networking
functions may be integrated into handsets, just as other
communications services such as MMS are part of the phone, not
a separate application.

“It’s a shift away from the mentality that you must use some kind of
browser on the device to take you to the service,” Mr. Conahan
said. “Everyone is moving to one-click or no-click functionality in
which the user is able to perform social tasks as easily as they send
an SMS message. There’s no browser involved. It just happens.”

Mobile Social Networks 14

Related Information and Links About eMarketer

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MySpace Mobile
http://m.myspace.com
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and media. eMarketer analyzes information
Facebook Mobile
http://m.facebook.com from over 3,000 sources, and brings it together
Friendster Mobile
in reports, articles and the most comprehensive
http://www.friendster.com/mobile database of online marketing statistics in
Bebo the world.
http://www.bebo.com

Mocospace A Trusted Resource

eMarketer serves as a trusted, third-party resource, cutting
http://www.mocospace.com
through the clutter and hype–helping businesses make sense of
airG the numbers and trends. eMarketer's products and services help
http://www.airg.com companies make better, more informed business decisions by:

Intercasting ■ Streamlining research sources and reducing costs

http://www.intercastingcorp.com
■ Eliminating critical data gaps
Ovi
■ Providing an objective, bird’s eye view of the entire landscape
http://www.ovi.nokia.com
■ Better deploying and sharing information across the company
Yahoo oneConnect
http://http://mobile.yahoo.com/oneconnect ■ Building solid business cases backed up by hard data

myGamma ■ Reducing business risk

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Report Contributors
Mike Chapman Editorial Director
Joanne DiCamillo Production Artist
Dana Hill Production Artist
Chris Keating Senior Researcher
James Ku Data Entry Associate
and Production Artist
Nicole Perrin Copyeditor
Susan Reiter Managing Editor
Hilary Rengert Senior Researcher
and Production Artist
Allison Smith Senior Editor

Mobile Social Networks 15