Since Friendster's founding in 2002, social networking sites have changed quite a bit. Through the rise and development of more and more networks--MySpace, Facebook, Twitter, and beyond--we have seen time and time again that social media is a constantly evolving entity, one that's difficult to pin down easily. 2009 was no different. From the enormous valuations and market-changing acquisitions down to the small ways in which social networking is affecting our lives, 2009 rocked the social Web. Here we look at the ten biggest social media stories of the year.
1. Twitter valuation at $1 billion
In case you missed it, Twitter blew up this year. It was just a small sign of things to come when the site noted 5x normal tweets per second on Inauguration Day on January 20th. For the first half of the year, the micro-blogging service experienced a rocket-ship trajectory. Twitter received so much media attention that in June it was calculated that the site had received $48 million in free media coverage. Growth of the site reached such incredible heights in the first six months that CEO Evan Williams had to assure everybody that the growth plateau in the second half of 2009 was only temporary. The Twitter noise may have reached the peak of its crescendo in September, when, in anticipation of the startup's closing of a $100 million Series D funding round, rumors swirled that investors valued the company at $1 billion. On top of everything else, the Global Language Monitor named "Twitter" the top word of 2009:
"In a year dominated by world-shaking political events, a pandemic, the
after effects of a financial tsunami and the death of a revered pop
icon, the word Twitter stands above all the other words," said a Global Language Monitor spokesperson.
2. Facebook buys FriendFeed
Facebook goes cash-flow positive (September). Facebook hits 300 million users (also September). Facebook shares rise 42% in four months (November). Facebook hits 350 million users (December). There were a lot of notable Facebook stories this year and most of them simply reiterated the same thing in different words: "Facebook is still growing. A lot." One story, however, underscores how Facebook is becoming a notable and viable acquirer. In August, Facebook made a combined $15 million cash and $32.5 million stock purchase of microblogging site FriendFeed. To the dismay of FriendFeed fans, Facebook was motivated simply to purchase the staff behind the technology at FriendFeed, leaving the service to see no future development. Though we have not yet seen any tangible results from FriendFeed developers moving over to Facebook, for now we can only assume that they are working on something awesome.
3. EA acquires Playfish for $275 million
As the Web continues to evolve, it seems like social media is changing the way we do just about everything. The video game industry, which for years has pushed towards the biggest, loudest, most powerful consoles yet, got a bit of a wake-up call in early November when Electronic Arts, one of the world's largest third-party game publishers, paid $275 million in cash for a little social gaming company called Playfish. If Playfish meets certain criteria by the end of 2011, Playfish's former owners could receive another $100 million. That's a lot of money for a company that designs poker and restaurant games, free games that collect revenue via the sale of virtual goods, solely for social networking sites like Facebook. EA foresees mobile and online games will continue to make up more and more of the gaming industry in 2010. In attracting one of the most well-known game publishers and in reaching nearly 60 million monthly active users worldwide, Playfish is proving that social games like Pet Society, Restaurant City, and Country Story are here to stay.
4. Zynga worth $1 billion
A couple of weeks after EA's acquisition of Playfish, speculation arose that Zynga - a Playfish competitor and the leading social gaming company today - was worth about $1 billion, since EA paid 3-4 times the revenue generated by Playfish. With incredibly popular games like Mafia Wars and FarmVille, Zynga sees 100 million monthly unique visitors and has registered over 200 million active users. FarmVille, the most popular social networking game ever with almost 75 million monthly active users, has been expanded by Zynga to a stand-alone site, where users sign in with Facebook Connect. Despite some controversy over scam offers made via advertising in Zynga games, which the company has since made efforts to diminish, Zynga is yet another example of social gaming on the rise. [Note: Zynga CEO Mark Pincus is presenting a keynote at Vator Splash on February, 4, 2010 in San Francisco. Mark your calendars.]
5. MySpace acquires iLike for $20 million
ILike's sale to MySpace underscores that it's a hit or miss world out there. While iLike had significant traffic of some 55 million users, and had grown to be one of the most popular social music discovery services with applications on Facebook, Orkut, hi5 and Bebo, it only fetched $20 million in a buyout by MySpace. The sales price puts iLike in a stark juxtaposition to Zynga - which is estimated to be worth $1 billion, and underscores the uncertainty of a startup's future and exit when there is no monetization plan in sight. While iLike appeared to be on the road to greatness with its 55 million users, its exit valuation clearly signaled that unless a company knows how to monetize its users, the market won't pay up.
6. MOL acquires Friendster
Friendster, the first mover and pioneer of social networks, made the last big social media news of the year (unless something else happens in the next two weeks) by being acquired by MOL Global, a Malaysian online payments company. Though financial details have not been disclosed, there are estimates that MOL paid up to $100 million in the deal. Though you may have forgotten all about Friendster, the 2002-founded social network is still huge in Asia, where it has 75 million registered users--90% of the entire site's membership. Having raised just over $45 million since its founding as the original social network, this Silicon Valley darling may have led us to expect more from its exit. Nevertheless, MOL, already having implemented various payment systems into Friendster, will certainly enjoy the benefits of owning the actual network.
7. Citizen Journalism
When that US airways plane crash landed into the Hudson River in January, Twitter was the first one to let us know. And in June, when masses of demonstrators took to the streets of Tehran to express anger at a questionable presidential election in Iran, we only heard the dissent's oft-censored voice because its community managed to find ways onto social networking sites like Facebook and Twitter. We can only guess at how many people first heard about Michael Jackson's death through a status update. As social sites grow in popularity, they become more powerful hubs of communication, and so it is only natural that in 2009 we experienced the rise of a new era of citizen journalism. YouTube even launched a Reporters' Center to teach the basics on reporting the news. While there have been some less pretty side effects (like businesses jumping on trends for free advertising or uninformed "reporters" kindling false rumors), citizen journalism has the awesome potential to give a lot of power back to the people. Why else would censorship-heavy countries like China be so preoccupied with blocking social networking sites?
8. The Rise of Augmented Reality
Smartphones are very powerful devices. So powerful, in fact, that the tech industry has coined a phrase, "augmented reality," to refer to an emerging form of reality, made accessible, supplemented, and molded by mobile applications. Aloqa, for example, notifies you through your mobile device of nearby hotspots, Facebook friends, or interesting events. Gowalla, which raised $8.3 million this year, is another location-based social networking service all about sharing and discovering new and interesting places in the world. Similarly, Aha Mobile informs users about traffic conditions in real-time. Another app called HearPlanet lets you discover what's around you. Probably the most popular augmented reality app is Foursquare, an application available for iPhone, Android, and other devices that has slowly been building a dedicated community of users obsessed with finding and sharing the coolest locations within cities. These technologies, just now emerging, signal the start of a new era of mobile social media.
9. Google + Bing go real-time
If you still think Twitter and other social sharing sites are just noise, then you'll have to explain why Bing and Google are all about incorporating real-time in search results. Bing went there first, creating a branch off its main search engine called Bing Twitter, where users can search the Web via Twitter's real-time updates. But Google took it one step further when it announced last week that relevant real-time updates would be implemented directly into Google search results. Not only that, but while the page remains open, the stream will automatically update in real-time. Coupled with an October update which includes forum posts in search results, these updates show just important user-generated content has become.
10. US Government 2.0
Partisan politics aside, we can probably all agree that the current administration's ability to take full advantage of social media capabilities is a good thing. From Facebook to Twitter, President Obama's fleet of advisers and assistants have created profiles to keep the public constantly updated about the goings-on at the White House. Videos on YouTube and Vimeo of presidential speeches, photos of meetings between diplomats, and a constant stream of executive updates made available across multiple sites may have made this administration the most accessible that it has ever been. Similarly, the US Army has gone to great lengths setting up multiple accounts across all the most popular social networking sites in order to get the most direct access with possible recruits. On the other hand, troops have had to deal with mixed and confused orders over the use of social networking while serving, as policies teetered constantly between full access and an all-out ban. Still, the government's embrace of social media is just one more sign (as if we needed more) of the massively growing influence of online networking.
Feel free to comment on what you think is the most interesting social media story of the year.