Facebook Faces Up

As the social networking behemoth meets new challenges, three startup college networks are waiting in the wings

Facebook has had a rough ride of late. Users complain about the site's frequent shutdowns, with some observers seeing the malfunction as a possible troubling security breach (see BusinessWeek.com, 07/31/07, "Facebook Outage: Wakeup Call").

And though the news media continue to talk about the network's rapid growth and market dominance, commentators have expressed misgivings about Facebook's ability to sustain and monetize that expansion (see BusinessWeek.com, 8/6/07, "Fogeys Flock to Facebook") and (see BusinessWeek.com, 8/6/07, "Too Old for Facebook?").

Now, with founder Mark Zuckerberg heading back to court Aug. 8 to defend himself against accusations that he stole the site's concept from ConnectU, another collegiate social network with its roots at Harvard, the vultures are on the sidelines, flapping their wings.

Staying in School

Not least among them are those looking to fill the void they claim Facebook has left behind by deserting its core audience, college students. According to ComScore, 71% of users are now outside the college age-bracket. As of May, anyone could join the network, whereas users once needed a .edu e-mail address (as proof of college affiliation) to join.

But the demand for student-only online spaces—the very thing that made Facebook take off in the first place—remains. And that's where three ventures by young alumni—Off The Record, CollegeTonight.com, and CollegeWikis.com—hope to come in. Their success and strategy depend on staying loyal to that college niche, and they're looking to find ways to complement rather than compete with the networks students already use.

Niche marketing has been the strategy of choice for many new networks in the last year (see BusinessWeek.com, 3/14/07, "Social Networking Goes Niche"). Users have responded well to being a part of a distinct community, whether grouped by profession, ethnicity, or school. And advertisers like that specificity too.

College-Specific Blogs

Furthermore, research done this April by iProspect shows that among the younger age group, the top social networks have overlapping user-bases. For each of the eight social sites in the report, 30% to 40% of 18- to 24-year-olds surveyed reported some involvement, which means most respondents are frequenting more than one of the sites. According to iProspect, the likely overlap is three to five networks per average student user. If that's true, the niche model just got a whole lot more interesting to mainstream business.

College campuses provide an ideal niche case, not only because they are self-contained, but because they are communities with ample social needs and active online populations. "[They] are probably the best example we've seen of communities that can be easily activated by online media," says Columbia alumnus Doug Imbruce. This September, Imbruce is launching a series of college-specific blogs called Off The Record, where students can post information about their schools, their peers, and their professors and administrators, while using a pseudonym.

Content will be managed by student-editors reporting to an editor-in-chief in Off The Record's New York offices. Though the controlled structure and pseudonyms may seem impersonal, Imbruce promises that editors will be chiefly concerned with controlling logistics, technology, and privacy. He predicts a site culture in which students collectively feel free to post the truth of college life as they see it. By virtue of its selectivity—students can only contribute to their own college's page—Imbruce believes Off The Record is "more intimate" than a larger network or more public blog.

Pep Squad

Given the specificity of the information that will be contained within each blog thread, Imbruce also promises the sites will remain exclusive to each college. "We're looking to create college sites," he says. "We may add more content, sports scores, and news, but we will stay vertical within these communities."

Student-exclusive networks provide users with a sense of importance: It's easy to become a big fish in a small, students-only pond. Emory University alumus Zach Suchin hopes to capitalize on this desire. His venture, CollegeTonight.com, will establish distinct networks for each U.S. college, where students can post information about parties, concerts, and social events, download contact lists to their mobile phones, and make plans to meet up. In September, CollegeTonight will launch a nine-month nightlife tour of 129 sponsored events at colleges across the country. Business partners already include car manufacturer Subaru (JASDAQ) and CBS (CBS), which will sponsor the concerts and parties on the tour in the hope of reaching Suchin's user base.

Suchin proposes the site as a tool chiefly for "the trendsetters and the tastemakers" and, notably, wealthy students with disposable income (the tour begins at Ivy League schools Yale and Brown). And it's actively promoting a sense of exclusivity and privacy. Former FBI profiler John Douglas crafted the site's privacy settings and users must have a .edu e-mail to join. "That will never change." Suchin says. "We're trying to create the sense of community that Facebook abandoned."

Weaning Away From Facebook

As it turns out, for now at least, students are loath to leave the network that still dominates online socializing. "Facebook has such a strong hold on the college social networking market that people are [still] interested in developing things for Facebook," explains Joe DiPasquale, founder of CollegeWikis.com. He hopes to strike a balance by creating college-specific sites with a widget that links to Facebook.

On CollegeWikis.com, students can e-mail questions about local restaurants, classes, and dorm life. Each question and e-mailed response from other students becomes instant content on the Wikipedia-style Web site, a viral format that DiPasquale believes students are more likely to use than mass administrative e-mails, which most students simply delete. Since its launch in April, CollegeWikis has expanded to 60 schools nationwide and achieved 15% penetration at some campuses.

Meanwhile, on CollegeWikis.com's sponsored Facebook application, SuperWall, users post college-specific information that is instantly communicated to the virtual message walls of other registered users at their college. SuperWall is currently one of Facebook's 10 most popular applications.

Room for Everyone

Again, the appeal of CollegeWikis.com is its specificity. A site is created for any college if a student submits a request to the central wiki page. Within that wiki, users can join or create lists for their major, their class, and their dorm. Already the average college wiki page has 216 more-specific lists. Says DiPasquale, "When we did focus groups, we found people wanted the sites as specific as they could be."

DiPasquale's dual approach to advertising and site sponsorship—be authentic, be transparent—epitomizes these niche networks' business model. Young consumers are expert multi-taskers so there is room for multiple offerings within their expanding online life. These three young entrepreneurs hope their offerings will complement one another and Facebook, creating more business for all of them. Says Off the Record's Imbruce, "Media in this group [are] additive and not really competitive." Though he's talking about college students, the insight applies to online business overall.

Source:www.businessweek.com