SOURCE: Pike & Fischer

November 15, 2006 10:44 ET

Social Networking Sites to Consolidate, Become Lucrative Ad-Revenue Generator, Pike & Fischer Concludes in New Report

SILVER SPRING, MD -- (MARKET WIRE) -- November 15, 2006 -- Social networking sites such as MySpace and Facebook are serving as a lucrative platform for advertisers to deliver interactive, rich-media promotions. But the number of those sites will consolidate over the next two years, leaving advertisers with fewer -- but potentially larger -- online communities for their promotions, market research firm Pike & Fischer concludes in a new report.

Entrepreneurs are continually trying to exploit niche interests with the launch of specialized social networking sites dedicated to everything from dogs and cats to vampires and hip-hop music. A number of competing sites are vying for the same user-base by appealing to these special interests, all in the hope of a multimillion-dollar buyout like News Corporation's recent acquisition of MySpace. These sites are also trying to compete for advertiser dollars with varied levels of success, and advertisers are trying to get the maximum traffic for their ads by employing interactive video and other broadband-enhanced features.

But, as signaled by Google's $1.65 billion purchase of online video-sharing site YouTube, most social networking and content sharing Web sites will be tied to or owned by a handful of major broadband service providers within the next two years, Pike & Fischer predicts in its new report, "Rich-Media Advertising on Social Networking Sites."

"Niche players who appeal to specific interests, lifestyles and vocations will eventually face a shakeout in the market," says Pike & Fischer senior analyst Tim Deal, "resulting in the survival of a core group of sites with high functionality, seamless usability, expanded interactivity, and highly efficient and integrated advertising business models."

Pike & Fischer, a BNA company, offers a host of research and analysis on the telecommunications industry.

The report, entitled "Market Brief: Rich-Media Advertising on Social Networking Sites," is priced at $349. For analyst commentary or an executive summary, contact Tim Deal at 603-557-8876 / tdeal@pf.com, or Scott Sleek at 301-562-1530, x291 / ssleek@pf.com. Executive summaries of the report are available to the media.

For a complete list of Pike & Fischer reports, see the firm's Web site: www.broadbandadvisoryservices.com. Orders may be placed at the Web site or by contacting Jonathan Wentworth Ping at 212-576-8741 / jping@pf.com.

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