Mobile social networking – a goldmine of untapped business opportunities

Social networking on mobile devices is set for explosive growth, but established Web 2.0 sites aren’t capitalizing on this opportunity, experts say.

There’s huge potential in this emerging market that isn’t being tapped, they say.

The likes of Facebook Mobile and MySpace Mobile are not developing better user interfaces that take advantage of the unique capabilities of mobile devices, says Tim Hickernell, senior analyst for Info-Tech Research Group, in London, Ont.

He said these providers are content to deliver to cell phone users mere copies of the services they offer computer-based users.

“Established social networking sites are still offering the same tired old services such as photo uploading and status updating when they could be exploiting the unique character of mobile connectivity,

From a technology standpoint, cell phone manufacturers can support collaboration and other capabilities by equipping mobile devices with technologies such as Bluetooth and global positioning systems (GPS).

This, Hickernell said, would provide a range of business opportunities to companies that what to target heavy cell phone users.

Some 800 million people worldwide will be using the mobile phones to connect to social networks 2012, according to a recent report from eMarketer Inc. an Internet market research firm.

That figure will represent nearly 20 per cent of all mobile phone users.

Service providers in Europe, Asia and the Middle East were pioneers in offering mobile social networking, but only a handful of start-up firms are exploiting the phenomena in North American, Hickernell notes.

One such firm is MocoSpace, a Boston-based firm founded in 2005 by long-time buddies and serial mobile entrepreneurs Justin Siegel and Jamie Hall.

The company, which has 25 employees and two offices – in Boston and Herzeliya, Israel – recently announced its mobile users have just passed the two-million mark and that it has generated more than 1.5 billion page views for the month of May.

This is slightly larger than the 1.4 billion pageviews of MySpace Mobile for the previous month. MocoSpace’s traffic has grown more than 50 per cent compared to just five months ago.

MocoSpace members do many of the same things as their computer-based counterparts – they customize profiles, link to friends’ profiles, upload and share photos, exchange e-mail and instant messages and play online game. However, they do all of this without booting up a PC.

They do all these tasks on their cell phone, which Siegel calls “the ultimate social device.”

Siegel and Hall grasped the potential mobile social networking when they launched their first company in 2001, which was one of the first businesses in the U.S. to offer mobile phone games.

“Why,” asked Siegel, “would people want to pay $7 to download Tetris so they could play it on their phone?”

Well apparently the idea was already a big hit at that time in the U.K. and Japan were people were already using cell phones to exchange text messages, play WAP (wireless application protocol) games and buy merchandize, while North Americans were only downloading ring tones, he said.

The duo sold the business in 2004, and launched MocoSpace a year after that.

Siegel sees tremendous business opportunities for their new venture. “Mobile networking is going to be a new marketing channel for businesses.”

He said companies quick to establish a presence in this space can use sites such as MocoSpace to port ads, as well as to “reach out and connect to the market.”

MocoSpace offers access to a huge and promising demographic – individuals in their teens to late 20s, he said.

“Unfortunately these consumers are very elusive because they are always on the go. The one way to catch them is on the one device they are always with – their cell phones.”

Rather than bombard potential clients with ads, Siegel said, businesses should focus on developing a site presence by connecting with network users. “Engage them in dialogue to get to know what they want. This way you gain people’s trust.”

Info-Tech’s Hickernell suggests mobile networking sites can do a better job of this by dumping PC-based networking strategies and integrating mobile technology into their network.

For example, Bluetooth technology can enhance connection and meeting features by alterting mobile social net users if a “friend” is nearby.

“Picture yourself logging onto the social net site using your phone. Immediately, your Bluetooth connection can alert you if someone on your friends list is in the vicinity,” Hickernell said.

“You now have the option of calling that friend over to meet somewhere. That’s great for social purposes, but is also opens up possibilities for impromptu business meetings when dealing with business-based social networks.”

Linking the system to a GPS can provide other options such as enabling users to locate an appropriate restaurant to meet.

The same technology can be used by businesses to drive traffic to their front door, Hickernell said.

In one scenario, the analysts envisions a coffee shop such as Tim Horton’s or Starbucks offering discount coupons to social network subscribers who happen to be in reach of the shop’s Bluetooth signal.

“This type of service, however, needs to be consent-based to avoid privacy and marketing issues.”

Hickernell thinks many social network sites are already experimenting with these ideas but daily operational issues might be hindering their progress.

“Companies such as Facebook are probably preoccupied with the rapid growth of their network and are tuned to dealing with those issues first.”

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