Magical Money-Making Machine; Mobile. And here evidence, mobile social networking

We love mobile here at the Communities Dominate blog. As mobile telecoms is the fastest-growing of the major global industries (ie those worth 100 Billon dollars or more), I do like to call mobile the "magical money-making machine." But if you are considering getting involved in this, the most lucrative part of the digital revolution, then where to go? Ringing tones or SMS or location-based services or what? I'll tell you what. Look at that part of this industry - the subsector - which is itself growing the fastest. And that is beyond any doubt, mobile social networking.

So its time to take stock of how mobile social networking is doing today. Last year we reported that mobile social networking was the world's fastest-growing billion-dollar business opportunity and various sources reported impressive numbers, like that there were 148 million users (eMarketer 2008) who generated 6 Billion dollars of revenues globally in 2007 (Informa). And many sources are now saying social networking on mobile phones is the first mass-market killer application for 3G mobile telecoms, such as Vodafone, Nokia and T-Mobile have been saying recently.

What do we think here at Communities Dominate? Well, this is nothing new to us, obviously. Already in our book with Alan Moore, we wrote that the inevitable future direction for most social networking services online on the internet, was headed to mobile phones. And since the first genuine (national) mobile social networking service went commercially live in South Korea (Cyworld) in 2003, this industry has sustained a breathtaking growth rate of 60% annually. Not in users mind you, in annual revenues earned !  The Tomi Ahonen Almanac 2009, which does more cautiously count only 122 million active users of social networking on mobile at the end of 2008, still arrives at an end-of-year 2008 revenue figure of 8.9 Billion dollars. In a year when the economy "cratered" and business seemed to vanish into thin air, and advertising budgets were particularly hard hit so online social networking services were also failing to meet targets; those social networking services which offer strong mobile dimensions managed to grow... 48% in just one year !!!!

And yes, you read it right. The innovative mobile social networking services do not depend on advertising for their revenues. Leading players get far more than half of their total revenues directly from their membership, and not in subscription revenues either. We've chronicled many of the innovators here at his blog and I've discussed many in my books, such as Habbo Hotel from Finland, Cyworld from South Korea, and Flirtomatic from the UK and Mobage Town from Japan.

Look at Flirtomatic for example. In 2007 they introduced their virtual red rose, a simple virtual gift worth about 40 US cents. Out of their 100,000 members back then (today they have over a million) they managed to sell 3.5 million of the virtual flowers! They earned 1.4 million dollars just out of this one gimmick - 14 dollars per subscriber per year, just on one TYPE of virtual content. Then for Valentine's Day 2008 the red rose was familiar. How to revive it? The gold sprinkle of course! This is virtual. So its a tiny bit of design and programming to add the gold dust to the rose. But Valentine's Day they doubled their rose sales due to this new sprinkled rose, and yes, the sprnkled rose cost about twice the cost of the plain red rose. Its a magical money-making machine, mobile is. And Flirtomatic has tons of virtual (and even real world) gifts. But Flirtomatic also has tons of personalization items that are sold, anything from the "delete your freak" feature of paying to eliminate your worst rating, to the virtual boob job for the summer make-over..Am not kidding, at 1 UK pound (1.20 Euro, 1.60 USD) per boob job, Flirtomatic sold 10,000 of these virtual gimmicks last year. And yes, Flirtomatic also has advertising and sposored content as well. Sure, but advertising is of the order of magnitude of one quarter of Flirtomatic's income. Not hte majority by a long shot. And what of the subscription fee? Flirtomatic abandoned that two years ago "as unnecessary"... This is a magical money-making machine!

Flirtomatic CEO Mark Curtis says their users "buy extra fun from us". This is totally in line with say Vince Staybl the CEO of Itsmy from Germany who says "We want to entertain everyone." Or how Cyworld's parent SK Communications CEO Dr Hyun-Oh Yoo of South Korea said of his view for Cyworld's evolution "I dream about how to further engage and make reationships with each other more rewarding." We are human beings, we need to connect and the moble phone is the first and best connection device. Social networking services on mobile are then the most compelling services on this platform.

You the Reader are already convinced of the value of social networking to you personally in your professional life. You read this blog. We could not be here were it not for social networking on the internet. Then add McGuire's Law which states that the utility of any activity increases with its mobility. If it is useful to read a blog online, there is added utility to mobilize the blog (I often read or update this blog from my smartphone for example). ANY social networking service can benefit from mobility, from Flickr to Wikipedia. Or look at Twitter for example.

Beyond the social networking "clubs" where communities dominate, there also are closely related concepts such as user-generated content. SeeMeTV is another magical money-making machine, far far FAR more so than its larger and better known online internet cousin, YouTube. On SeeMeTV each creator of original content gets a revenue-share every time his or her video is viewed by someone. The average video earns 12 UK pounds (14 Euros, 18 US dollars) to its creator. This is not this month's hottest video on YouTube. This is an average video. If you produce two average videos per month on SeeMeTV, you earn so much in your revenue-sharing that it pays for more than average cost of voice calls and messaging on UK mobile phone networks..

The various hot areas of social networking, from multiplayer online gaming to dating services to music fan clubs to job-search to US presidential politics, all are finding the mobile side of social networking the most compelling aspect of their business. And what kind of numbers. Look at Mobage Town of Japan. They have "just" 10 million users, but they generate 200 million dollars of revenues annually from them. Thats 20 US dollars per subscriber per year or 1.67 dollars per month. Most of that is personalization and virtual content, not advertising. Similar numbers come from South Korea where Cyworld Mobile reported in 2007 they earned 14 dollars per mobile Cyworld user per year and again most of that is not advertising. Compare that with Facebook on the internet, which earns about 2 dollars per user per year. Or YouTube which only earns about 40 cents per user per year. Both Facebook and YouTube aretotal dependent on advertising for income. This is "night-and-day" comparison between the struggling social networking services online and the thriving ones on mobile. The Netsize Guide 2009 reports that there are over 200 commercially launched mobile social networking services in the world already.

And think, in this economic environment, the advertising spending is severely cut. But mobile telecoms  - a Trillion dollar industry - keeps growing strong. Of mobile the strongest growth are is not voice calls or handset sales, it is mobile data (mobile data alone is a sector worth 200 billion dollars or about as much as the total worldwide internet business put together, including broadband and narrowband access fees, all intenet content fees and all internet advertising revenues, put together). And out of that mobile data which includes SMS text messaging and ringing tones etc, of the mobiel data opportunity, the hottest area is mobile social networking. The subsector was born in 2003. Today mobile social networking delivers 8.9 billion dollars of revenues. This is not just the fastest-growing billion-dollar industry of today, it is also the fastest-growing business opportunity of the economic history of mankind. YOU are personally witnessing the biggest money-making bonanza ever seen. It grew another 48% last year. It will grow in similar scale this year passing the 10 billion dollar level during 2009. Will you jump in, or will you watch this once-in-century-type-of-opportunity pass you by. Note I am not hyping a promise of a future technology like say "green technologies" or nanotechnology or other such future promises. I am talking of a real, commercially launched industry with 200 compnaies all earning revenues, that has real happy paying customers who pony up most of the 8.9 billion dollars of the revenues.

Yes, its a magical money-making machine, mobile is and the hottest area in mobile content and services today is mobile social networking.

Now, as we like to do at Communities Dominate, we have some free further info for you. I have totally rewritten and updated my two page Thought Piece on Mobile Social Networking (a short, intense and fact-filled white paper). If you send me an email to tomi (at) tomiahonen (dot) com then I'll send you the pdf file of the Thought Piece by return email. You may freely forward that to any colleagues who should think of this opportunity. My thinking is, that any executive can take the time to read a two page summary ha-ha..

And those seriously already working in mobile social networking or who are adding social networking to a mobile service or adding mobile to an internet based social networking service, then the must-read resource is obviously my 171 page eBook Tomi Ahonen Pearls Vol 2: Mobile Social Networking, that was released yesterday and which has 50 case studies (ie my "Pearls") of successes in mobile social networking including every one mentioned in this blog article. There are sample pages including several of the Pearls at that link.

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