Most internet observers probably agree that the fight for dominance in the social network segment of the web is over News Corp's (NYSE: NWS) MySpace, the perpetual leader, and Facebook, which is coming along as a weak second and may be purchased by Yahoo! (NASDAQ: YHOO) to build its presence in the sector.
Still, the growth rate at Facebook and other social network sites is putting them back into contention. VentureBeat published statistics showing that in May, Facebook's audience was 47.2 million unique visitors, up from 38.8 million in April. Friendster's audience rose from 22.6 million to 24.7 million over the same period.
MySpace still has a clear lead with 109.5 million unique users. The growth of competition raises the question of what might happen if Yahoo! or MSN bought Facebook and Friendster. That would build an aggregate audience of almost 75 million unique visitors.
Figuring out how to make big money in social networks is still a problem. But Google (NASDAQ: GOOG) appears to drive a great deal of search traffic from MySpace, and heaven knows, Yahoo! and MSN could use more search engine traffic.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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