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Saturday, September 23, 2006

Orkut vs. Myspace

Corey Ward, an e-Entrepreneur, was ranting and raving about the possibility of Orkut overtaking Myspace as the reining social network. After reading his post and doing a bit of digging of my own I think he may be onto something, its just not what he thinks. Corey points out that Orkut's Alexa ranking is looking pretty good relative to flat Myspace ranking. While this is a very interesting observation (good catch Corey) its not the whole story.

In order to better understand the relationship between Orkut and Myspace I rechecked their Alexa rankings and threw in the rankings of 3 other social networking sites to add some context and contrast. The first thing that jumped out at me was how relatively flat (red) was compared to Orkut (blue). Even more surprising was how was being eclipsed by YouTube (green). Of course the 2 billion dollar boys at Facebook look like a really poor purchase decision given their flat Alexa ranking, which is surprisingly smaller then that of the perpetually moribund Friendster.

The daily traffic trends, as reported by Alexa, also seems to point in the direction of failing fortunes for Myspace, as more Alexa users users move towards platforms more tailored to their interest. Either that or Myspace has reached the peak of its faddish following and will now slowly decline into Boo styled obscurity. Note that both YouTube and Orkut continue to growth in traffic as Myspace, Facebook and Friendster remain flat in the six month period Alexa is showing. Given all the press attention around YouTube in the last few months it isnt surprising that they are growing but whats driving Orkuts growth? To get a better handle on what might be fueling Orkuts rise I checked out Google Trends to see how it would match-up with Alexa.

And survey says... Google pretty much agrees with Alexa on this one. The top three in terms of search volume are Myspace, Youtube and Orkut. While the general interest in Orkut, from a search perspective, isnt as great as that of Youtube or Myspace thats to be expected. It also looks like there is flattening in Myspace searches which, given its ubiquitous media presence should be expected. Whats really interesting here is the region data that Google Trends provides. You'll note that Myspace dominates US and UK searches but doesnt even chart internationally. While Orkut, occupies mind-share in Brazil (pop. 180 million), Pakistan (pop. 170 million) and India (pop. 1 billion). Facebook and Friendster are pretty much irrelevant from an international perspective and dont seem to be making any in-roads in this areas, at least as reflected by Google and Alexa.

So anticipating demographic shifts in the US and growth of Internet usage internationally which business would you rather put money on today? The business thats US centric, has flat domestic growth, media saturation and little to no international appeal but a mature marketplace with revenues visibility and cash-out options. Or the business with an international base, expanding audience, large but immature markets and little competition. Suffice it to say that Google got one such business over 2 years ago at the cost of an engineers salary and Yahoo is pursuing getting the other type for somewhere north of 1 billion dollars.


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