Early entrants into the social networking space MySpace and Hi-5 are no longer competing to be the main social-net in people’s lives, rather they’re refocusing on Entertainment content. For MySpace that means Music, and for Hi-5 that means games; in both cases, the early returns look good.
The evolutions aren’t just about audience numbers, it’s about monetization & compatibility with advertising:
it’s easier to to develop ad-products around music consumption and sharing because advertisers prefer professional content to UGC content
with gaming advertisers have the opportunity to create more involved ad-experiences than run-of-network banners
Facebook itself is focusing on social engagement advertising, which is important when their environment is all about social interaction. More traditional forms of display advertising are proving not to work when it’s wrapped around your friend’s profile or when you’re looking at pictures from the weekend (CTR’s on social-nets are tanking). But multi-media content like video & gaming can still help produce content that is capable of tying with more pure-play branding efforts.
Oh and if there’s any question about where MySpace sees its future, rumors yesterday that MySpace will trade implementing Facebook Connect on their site for increased MySpace music & video share functionality on Facebook should say a lot.