broadstuff

From the Torygraph's Emma Barnett:

New research has shown adverts on social networking sites fail to engage 96 per cent of users, despite a rise in the number of brands opting in for promotion purposes.

According to the research, which surveyed 2,000 consumers, just four per cent of those polled had ever clicked on an advert on a social network and only nine per cent found them useful tools in assisting their purchasing decisions on the web.

OK I hear you say - move on, nothing new here. But wait.....

Dan Clays, managing director of digital media agency, BLM Quantum, doesn’t see the low click through rate as an off-putting factor when advising his clients (which include Domino’s Pizza and T Mobile) where to spend their digital advertising budgets.

“Actually that level of response still represents good value on an investment because the costs of advertising on a social networking site are still reasonable.

"Advertising on social media also needs to be seen as a commitment by brands. Companies have to keep going with it once they have started a dialogue and actually think of innovative ways to bring their brands to life. It’s also important what also happens after a ‘click’ which defines the value.”

In other words if you think these rates are cr*p, try direct mail, which probably has similar costs. Plus, you're snookered as thats where the customers are.

Well, he would say that, I hear you argue - but the man does have a point. So, bite the bullet - what works?

Vouchers, promotions and special offers were shown to be most effective way to encourage consumers to click on content displayed in banner ads and were also considered the least invasive form of online marketing at 11 per cent. Fifty-nine per cent said they thought that the promotions and offers available online were useful and only 19% of people had never responded to a voucher advert online.

Only 19%....I find that hard to believe. Still,you got the message - pump up da volume, and bribery works best!

Two Interesting articles recently suggesting that the whole social media thing may be just a bit overhyped (no, really - who woulda believed it!). First, this piece in Social Computing Journal noting that Gen Y just aren't buying, its those old baby boomer fogeys who are getting into all this stuff:

Twitter
According to Comscore, the majority of Twitter users worldwide are 35 or older. Young adults 18-24 only make up 10.6% of the Twitter population in the US and are less likely than the average user to tweet. 45-54 year olds are actually 36 percent more likely than average to visit Twitter.

The traditional social media early adopters are 18 -24 and Twitter is the new social media darling. Why isn't Gen Y biting?

LinkedIn
Gen Y is not on LinkedIn. The average age of a LinkedIn user is 40-years old. LinkedIn profiles do two things. They let you show the world all the great things you've accomplished (most twenty-somethings haven't accomplished much yet) and they let you connect with other business people in your industry (Gen Y has no idea what industry they're in and don't have many connections yet).

Want more proof that LinkedIn doesn't get Gen Y? They just did a major marketing and PR push to recent grads offering their premium service for 3 months free and pitching the site as a way to get jobs in a down economy. So far, this isn't working, and I don't expect it to anytime soon.

Facebook
Facebook is growing at an unparalleled speed, and the new adopters are older folks. The 35 to 54 Year old demographic grew at a rate of 276% over the last six months and the 55+ demographic grew more than 194% over the same time period, while 18-24 year olds only grew 20%. These same older adopters are joining sites like Twitter where it's all about real-time updates and hyper-connectivity.

When Facebook made a design change to simulate Twitter, there was a major user revolt, of course, many of the angriest people were long time Facebook users (i.e. Gen Y). Sure, change is difficult and oftentimes people buy in after some getting used to. But this one just seems different.

Want More?
A recent Accenture survey concluded that Baby boomers, defined in Accenture's survey as those 45 years old or older, are embracing popular consumer technology applications nearly 20 times faster than younger generations. Compared to a year ago, Gen Y consumers between the ages of 18 and 24, are decelerating their use of consumer electronics and related services including social networking, blogging, listening to podcasts and posting video on the Internet. Yet, there was a 67 percent increase among baby boomers reading blogs or listening to podcasts.

And now Gartner, inventor of the Hype Curve, is implying that (shock horror) the Whole Social Thing is tipping down into the Slough of Despond - Reuters' Erich Auchard notes:

Jackie Fenn, the report’s lead analyst and author of the 2008 book “Mastering the Hype Cycle,” delivers the main verdict:

Technologies at the Peak of Inflated Expectations during 2009 include cloud computing, e-books (such as from Amazon and Sony) and internet TV (for example, Hulu), while social software and microblogging sites (such as Twitter) have tipped over the peak and will soon experience disillusionment among corporate users.

Just in case you are tempted to take this with more than a pinch of salt, note that:

It will take up to five years for many of today’s trendy technologies to become mainstream, including Web 2.0, cloud computing, Internet TV, virtual worlds, and a true corporate mouthful, service-oriented architecture (SOA).

Funny how long hype cycles take to pay out. Three years ago, in its 2006 Hype Cycle Report, Gartner predicted Web 2.0 would go mainstream within just two years.

Very few technologies (if any) have 2 year hype-to-mass-adoption curves, we all know that, yet time and again people let themselves be persuaded that this time, it will be different. There is, as PT Barnum observed, one born every minute. But did he realise that the Boomer Fogeys can be taken time and again?

In fact, is there something especially odd about the Boomers that they can be suckered time and again? Gen Y seems to have seen through the SM BS - but why?

.....does Gen Y have an innate sense that too much connectivity and too much time online is unproductive and does nothing more than allow you to run in circles and chase something that you can never actually attain.

Or maybe, Gen Y is still all about being cool, and Silicon Valley just isn't that cool.

One observation I would make is that many of the main hype merchants today in this sector are Gen Y, but maybe Generation Y are also just better inured against their own hype, as they apparently are with all other forms of advertising, and its the older generation that don't have the antihype antibodies?

Nice post by VC and blogger Fred Destin, explaining the dynamics at work in the VC industry at the moment:

A number of effects are at work here:

- LPs closed for new business: Many funds are either failing to raise or are deciding to postpone their fundraising. Hence they have to live for longer with the cash at hand. That means reduced investment pace and a generally defensive stance.

- Companies in need: Companies are needing more cash. Even late stage "safe" businesses suddenly revert to spending hundreds of thousands a month as they grapple with a tough economy and expansion plans gone wrong. Exit are few and far between and the alternative sources of finance have dried up (venture debt, public markets etc).

- Optimistic funds chastened: Most funds were under-reserved for this crisis. In other words, the ratio of reserves held back versus capital invested was too low. Now, as you decide to hold back say $2 per $1 invested, all of a sudden cash planning shows a massive gap. The result is ruthless portfolio triage and weakened syndicates.

- Uncertain future: most of all, lack of visibility on when this crisis ends and when liquidity returns block decision making and risk taking

- Existential crisis: the industry must shrink, the GP's often need to reinvent what is they do, the legitimacy of the sector as a whole is in question. Behind the short-term angst are some good questions about the abundance of fairly undifferentiated venture capital out there chasing fairly undifferentiated deals in shrinking niches. But more on that some other day.

Net-net, the result is a two speed market where

- Atlas / Accel / Balderton/ Index / Wellington / Greylock / fill the blank are fighting hard for the "must-do" deals (wonga, just-eat, spotify etc)
- 75% of companies receive a firm but polite "no thanks, unless this is a recap" and are having to rely on their existing syndicates

(Of course those hot startup chasers are setting themselves to overpay and look dumb later - I hear Joost had to beat 'em off with a stick, and now look.... so, Wonga? Spotify?)

As he points out, the industry is seeing some rays of hope (the new Birch/Hoberman fund, for example) but overall it feels to Fred (and me) much like 2001-2003. As Fred says, "For most companies out there in the "grey zone" (worthy but not obviously hot), it's tough and it's going to remain that way."

Now in theory, one of the big changes today is you can start a company on an order of magnitude less money. That is true in the very early stages, and for specific types where the users can be suckered into doing a lot of the work, but for most TMT (Telecoms/Media/Tech) companies the largest costs are in the wetware, not the software or hardware, and salaries haven't dropped hugely from 2001 last time I looked.

Maybe that is why we are seeing "Not For Profit" outfits now intruding into all sorts of areas previously considered commercial, simply because there is more grant money than commercial money around today for startup types (and there is far less legal oversight of NFPs - so this will all end in tears, but that's for another article)

This has been on the spike awhile awaiting a free coffee break, Some time ago Paul Graham wrote this piece on the difference between managers and makers. And having done both jobs, I felt someone had to stick up for the much maligned management:

There are two types of schedule, which I'll call the manager's schedule and the maker's schedule. The manager's schedule is for bosses. It's embodied in the traditional appointment book, with each day cut into one hour intervals. You can block off several hours for a single task if you need to, but by default you change what you're doing every hour.

When you use time that way, it's merely a practical problem to meet with someone. Find an open slot in your schedule, book them, and you're done.

Most powerful people are on the manager's schedule. It's the schedule of command. But there's another way of using time that's common among people who make things, like programmers and writers. They generally prefer to use time in units of half a day at least. You can't write or program well in units of an hour. That's barely enough time to get started.

When you're operating on the maker's schedule, meetings are a disaster. A single meeting can blow a whole afternoon, by breaking it into two pieces each too small to do anything hard in. Plus you have to remember to go to the meeting. That's no problem for someone on the manager's schedule. There's always something coming on the next hour; the only question is what. But when someone on the maker's schedule has a meeting, they have to think about it.

For someone on the maker's schedule, having a meeting is like throwing an exception. It doesn't merely cause you to switch from one task to another; it changes the mode in which you work.

Akshully, this sort of work was done yonks ago by white collar productivity specialists (aka Taylorists). The tradeoff for the Maker is setup/teardown time vs process time, its a calculation nearly as old as work study itself and basically says don't disturb people who are concentrating on long setup stuff stuff with phone calls etc. Makers may be aghast to know that the algorithms are called thing like "N jobs on M resources" calculation. "Manager" work, being less concentration intensive, requires shorter setups/teardowns so can run in smaller "batches" of time (one of which may be used to calculate the N jobs on M resources).

But, what Paul conveniently forgets (or, to be kinder, maybe his Y combinator companies are so small that minimal co-ordination is required) in his polemic is Money. Yes, dear reader - above a certain size of company, assignment size etc it is far, far cheaper to chuck the Makers off their precious concentration time to find out what they are doing, as (bitter experience here, believe me) you can find they can be doing any number of the following:

- The wrong thing (or more likely, something that is interesting but not the customers' priority and thus the Stuff That Will Pay The Salaries)
- Not collaborating with the other bunch of Makers over there to get a joined up process, which is unfortunate as Maker Group A's stuff relies on Maker Group,B's stuff etc etc
- Re inventing something that we already have/can get/needs a bit of modification because its is not "perfect"
- Going down interesting side tasks rather than (boringly) fixing the critical path stuff that generates on-time delivery and thus money and a removal of the threat of penalty clauses
- Neglecting irksome tasks like documentation, version cotrol, configuration management and testing because thats like, dull - but not doing it early plays havoc with support costs
- Just generally f*cking up (sorry, "requiring re-orienting towards company and objective priorities")

In other words, unchecked Makerdom can chuck Money down the drain pretty fast. Its symbiotic you see - no sales without product, no product without sales........

Now, this is not to say one can not minimise Maker setup/teardown times - meetings first thing in the morning or later in the afternoon, catching them when they are playing foosball in the canteen etc) - but as any Mathematician or Manager can tell you, a company runs as much on money coming in and going out as on stuff being made..

From the "Its tough, but somebody has to research this stuff" dept:

Porn is an interesting bellwether for the comms industry, since time immemorial (and I mean immemorial) porn has been a leader of new trends in comms. Given the travails of the Mainstream Media, its interesting to see how this segment is, er, making out. Well, it seems that competition is getting stiffer, as this article in the Los Angeles Times notes:

Industry insiders estimate that since 2007, revenue for most adult production and distribution companies has declined 30% to 50% and the number of new films made has fallen sharply.

"We've gone through recessions before, but we've never been hit from every side like this," said Mark Spiegler, head of the Spiegler Girls talent agency, who has worked in porn since 1995.

"It's the free stuff that's killing us, and that's not going away," said Dion Jurasso, owner of porn production company Combat Zone, which has seen its business fall about 50% in the last three years.

Yes, its YOU! again, destroying an entire industry - User (de)Generated Content at its finest! What is interesting is to see what they are doing to get out of the mire. Firstly, there's the good old Freemium gambit:

Sites like Pornhub, YouPorn and RedTube attract more users than TMZ and the Huffington Post. The porn sites are even bigger than Pirate Bay, the top portal for illegal downloads of movies, TV shows and music.

Frustratingly for porn producers and distributors in the Valley, none of these sites appears to be making much money. Suzann Knudsen, a marketing director for PornoTube, said the site's parent, Adult Entertainment Broadcast Network, uses it to attract customers for paid video on demand.

One wonders how effective the "Premium" bits is proving to be. Mobile is always seen as a salvation:

The only growth market most executives see is mobile devices, since they let consumers watch porn anywhere and in relative privacy.

"Anyone betting against porn being a meaningful driver of traffic and revenue on mobile networks would be making a bad choice based on history," said Charles Golvin, an analyst at Forrester Research.

Diversification into physical goods - the standard advice for musicians - is also occurring, but of course the dirty little secret here is unless you have built up a brand in the good times, you're, well, f*cked:

Adult performers with big followings probably will continue to prosper, since they often work under a guaranteed contract and have loyal fans who buy all their work. Business managers for Belladonna and Tera Patrick, two of the industry's biggest stars, said their clients were using their celebrity to make money in other ways, like dancing in exotic clubs and licensing their name to sex toys and lingerie.

But for the "middle class" of the industry, those opportunities don't exist.

"It seems at this point that if you haven't established a well-known name, it's really hard to keep working," performer Alexa Jordan said.

At least in that respect they are more honest than those who are trying to tell aspirant musicians that flogging T shirts and the occasional pub gig is as viable as selling hundreds of CD's. But, as we predicted in our papers on Freeconomics, when the going gets tough, the tough get going:

Savannah Stern is adjusting to that reality. She's shooting scenes for her own subscription website and planning a tour of exotic dance clubs to earn money from her name while she can. After that, she hopes to go to college for an interior design degree and work in her family's real estate development and contracting business.

Classified ads for "SaaS" (you work it out) still work a treat, but as Craigslist is finding out, costs are rising as people clamp down on it (on Craigslist, that is):

Craigslist will cancel all existing Erotic Services ads in seven days, and start up the new [Adult] category. In other words, it's just a name change.

There is one critical difference: Craigslist employees will be reviewing ads for tell-tale prostitution-friendly phrases.

That is a lot more labour input per classified Ad, and reduces the scalability of the aut-ad market.

Now, one could argue that there is more supply of porn "talent" than musical talent (after all, nearly all people on the planet have their own organs) so musical values should be higher, but given that porn has always been a leading indicator to date, its unclear why it won't still be one going forward.

Update - it just occurred to me that I have yet to see Twitter hailed as a saviour for porn, perhaps its because everything has to be reduced in size.....

Literally - New Scientist:

Fifteen spiderbots, so-named because of the three spindly arms protruding from their suitcase-sized steel bodies, were lowered from a helicopter to spots inside the crater and around the rim of Mount St Helens, an active volcano in the US state of Washington, in July.

Each has a seismometer for detecting earthquakes, an infrared sensor to detect heat from volcanic explosions, a sensor to detect ash clouds, and a global positioning system to sense the ground bulging and pinpoint the exact location of seismic activity.

Once in place, the bots reached out to each other to form what is known as a mesh network. "It's similar to the internet," says Steve Chien, the principal scientist for autonomous systems at JPL. "You just lay them out, and they figure out the best way to route the data."

Its the economics that is driving the Internet of Things, of course:

The spiderbots are flexible and inexpensive enough that they can be set down almost anywhere. "You can imagine just dropping these out of a helicopter, and they'll just land like spikes in the ground and do their thing," Chien says.

The spider web's unique networking capabilities also give it a distinct advantage over other monitoring systems. The network is self-healing – if one node dies, the others automatically route data around it.

The Internet of Things is coming, in fact robots and such devices may even get their own operating system (oh no, just what we need - splitting a nascent market into multiple competing opertaing systems...). But things are definitely on the move, a recent McKinsey paper talks of the two big innovation "Nexii" transforming the Net over the next few years. One is "The Internet of People" - aka the Social Net. The other...:

The second innovation nexus is what we call the “Internet of Things,” which arises from the tiny sensors, computers, and other microdevices that can be built into physical objects and connected through wireless networks. The results are objects that become “smarter” and more interactive, with the potential to transform traditional business models. Goods and services that self-monitor can be sold in much finer slices and much more efficiently. Rather than buy a product outright, or sign a long-term service contract, sensors can track actual usage, enabling customers to pay only for what they consume or even the value they receive. In some cases, what was once a weighty capital expenditure is transformed into a lighter-weight operating expense, when products are transformed into services.

The new logic of paying for value is creating an array of novel business models. Take aircraft engines, where manufacturers are selling “thrust” as a service—rather than engines as a product—since they now are able to track the usage and performance of their engines electronically. At the same time, airplane manufacturers are offering contracts that guarantee “uptime” of their products, using embedded sensors in airframes that are able to determine when preventative maintenance is needed.

While you can see where they are going with all this, these models may be as fanciful as those of the "Social Net" have turned out to be so far. "Thrust as a Service" is just another term for "Servicing Engines as a Service", and any aero engineer worth their salt will want the frigging engines to work properly - but in Management NewSpeak, there is one born every minute, as PT Barnum once said.

Interesting article in Knowledge@Wharton (hat tip Adriana Lukas) on the negative impact of reducing friction in value chains. They took 2 fairly well established strategic tools....:

One theory (Porter's 5 forces) focuses exclusively on industry forces, looking at a firm's surrounding environment to determine how well a business can compete. Known as "industry analysis," the framework's "five forces" of the market -- rivalry, barriers to entry, the existence of substitute products, buyer power and supplier power -- have formed the hub of classic business strategy research since Michael E. Porter of Harvard Business School introduced them in 1979.

The other theory (the "Excellence" theory) concentrates on the company itself, making the assumption that markets work efficiently, and that stronger firms are simply better in some way than others. Known as "firm-level analysis" or the "resource-based view," this analytical framework assumes that a business is successful because it possesses some type of competitive advantage -- a patent, a unique way of doing business, a rare knowledge or talent, a special product -- that other companies in the industry lack.

.....and mashed them together in a simulation model, and then added a bit of game theory:

To mathematically link the two levels of analysis, Chatain and Zemsky set a value for what they call "frictions." The word describes any forces that make it difficult for buyers and sellers to connect. For example, a poor location could be a source of friction for a retailer, because customers will have to go out of their way to visit the store. A poorly designed web site could create friction for an online business if potential customers are unable to find what they are looking for easily.

By Frictions, they mean:

Some industries naturally have higher frictions than others. The consumer market for gasoline, for example, has very little friction: The price and type of gasoline is clearly posted, and gas stations are located at nearly every major intersection, so customers don't have to research locations of gas stations ahead of time to figure out where to go. The market for a good plumber, on the other hand, has a very high level of friction. The service is highly personal, it's difficult to compare prices because the cost of each service varies from job to job, and there isn't a single marketplace where plumbers and customers can meet.

...or in old money, Transaction Costs. Anyway, its all in their paper, over here

But what is really interesting* is the outcome of this work, ie that too little friction destroys value as effectively as too much:

.....the researchers discovered an inverted U-shaped curve: A company's profits would suffer whenever frictions in the market were extremely high or low, but at moderate levels, a company's profits could increase. So there is an optimal level of friction in the marketplace, the researchers concluded. "Even if you're the best firm around, you still want some friction, and this is somewhat counterintuitive," Chatain says. "When you reduce friction, one would usually think it must be good for the strong firm. But it's not always the case. We found that stronger firms want to have less friction than weaker firms, but they don't want to [entirely] eliminate frictions."

That's because the less friction there is, the more firms have to compete directly with each other -- in industry-level parlance, rivalry increases. To win customers, the strong firm will have to cut prices. Eventually price-cutting shaves profit margins to the point that winning over new customers isn't worth it. Having a small amount of friction in the industry allows a company to keep prices at an optimal level.

And the online world is the best friction reducing agent known to man. Implications are fairly "interesting":

- The more your industry can go online, the lower the overall margins
- The lower the margins, the more it resolves to players who have massive scale and/or those operating at subsistence costs (did someone say User Generated Content)
- In a global market, those with the least friction lose - anyone with true "free trade" will be hollowed out by those with a few barriers.

This has some implications on 'Net policy for countries, as it is clear that being a bit more frictitious than your trading partners may help - and it looks like we may have to build the Internet with a bit of friction included, if it is actually going to create rather than continually destroy value. One to watch.....

*If I may - much of this is not that new, I recall reading (and doing) work much like this 15 years ago. We knew transaction costs close to zero would be majorly disruptive, its what the whole underlying premise of the dotcom bubble era was about! But 15 years later, this serves as a timely reminder that a zero transaction cost economy may not be an entirely good thing.

Well, someone had to - its not as if they were going anywhere, and its a Darwinian world out there, those that don't succeed get eaten. To be fair to Friendfeed, this whole area is in such early days and experimentation is still so rife, there will be many unsuccessful models and evolutionary dead ends. An earlier example of this that comes to mind is early aircraft, lots of weird and wacky combinations of props, wings, rudders etc were tried until a few basic structures won through (see the Bleriot replica flying the channel above, which settled the arrangement of aircraft for 50 odd years), the rest fed their DNA into that process. Being picked up by Facebook is a respectable end.

(It reinforces the Web 2.0 business model too - sell to someone big before it becomes clear you are an evolutionary dead end....)

The terms of the deal have not been made public*, but I'd suspect a predominantly stock for stock deal with a consideration for FriendFeeds' principals, its probably more about grabbing some talent on an earnout leash (and killing a small-cap competitor plus maybe grabbing some remaining cash as well). As CNET notes:

The release from Facebook repeatedly hinted that this is about talent more than product.

"Since I first tried FriendFeed, I've admired their team for creating such a simple and elegant service for people to share information," Facebook founder and CEO Mark Zuckerberg said in the statement. "As this shows, our culture continues to make Facebook a place where the best engineers come to build things quickly that lots of people will use."

What he said....... also, there are quite a few bits of FriendFeed that can be integrated to Facebook to give new services, it will be interesting to see how they play it (my money is on slow strangulation). We also await the inevitable "Twitter Killer"etc stuff with some mild distaste......its more like Facebook is becoming a member of the GYM club and buying in its innovation now.

* Update - WSJ says that the financials are:

"Facebook Inc. said it has acquired FriendFeed, a start-up that allows users to share links and status updates online, folding in a potential rival that struggled to take off. Facebook paid nearly $50 million for the company, in a combination cash and stock offer, according to people familiar with the matter. The company paid roughly $15 million in cash, with the rest in Facebook stock that vests over several years and would be valued roughly at $32.5 million."

$15m consideration - nice one - lets see what the earnout is!

Article on the next in the 4iP/POLIS “Recasting the Net” series, which will take place in Birmingham on September 17th mentions Matthew Hindman’s new book, The Myth of Digital Democracy. It presents quite a different view of the Web world than the usual happy-hippy-everyone's equal view....:

These are the limits of Online (American) Politics that Hindman carefully categorises:

1. Political traffic is a tiny portion of Web Usage: Porn gets 100 times the traffic of political websites
2. The link structure of the Web limits the content that citizens see: because we are taken to the most popular sites we get near-monopolies
3. Search Engine Use Is Shallow: We get taken to the familiar not the best or most relevant
4. Digital Content IS Expensive To Produce: going online is cheap but being successful through marketing, capacity and software development is expensive so early entrants dominate
5. Social Hierarchies Quickly Emerge - A List bloggers are difficult to shift, so again we get near-monopolies

Nothing there you would, in your heart of hearts, disagree with based on observing the Web with a clear eye, and yet it is near heretical in certain circles. The reviewer, Charlie Beckett, makes an interesting observation about narrowness of focus on the blogosphere as the only type on New Media in politics:

....the US obsession with the political blogosphere distracted people from the much richer opportunities online. US pol blogs thrives because the American mainstream political media is so boring and so editorially narrow, be it Fox News or the New York Times. Here in the UK we have much more vibrant newspaper-based political journalism as well as the vast edifice of the BBC and other public service broadcasters.

The author's argument is that social media, the symbiotic MSM/New Meedja feeding cycle and sheer rise in connected peoples is driving a more democratic discourse than the gloomy picture above. I think that he is a bit optimistic - the organising pattern is that set up above, and the new stew will cleave to it over time.

In the Grauniad today is a report from Ofcom asserting that The Yoof are deserting Social Media because The Fogies are colonising it:

The sites, once the virtual streetcorners, pubs and clubs for millions of 15- to 24-year-olds, have now been over-run by 25- to 34-year-olds whose presence is driving their younger peers away.
Is Facebook for old fogies? The Guardian's Richard Wray investigates Link to this audio

Although their love of being online shows no sign of abating, the percentage of 15- to 24-year-olds who have a profile on a social networking site has dropped for the first time – from 55% at the start of last year to 50% this year. In contrast, 46% of 25- to 34-year-olds are now regularly checking up on sites such as Facebook compared with 40% last year.

Now - a little rant, if I may: I'm afraid the stats in the article are not well presented (produced in all too typical Journo higgledy-piggledyness that makes you think they probably flunked maths at 16), and they don't even link to the Ofcom article so I can check it. Good old MSM journalism at its finest, I am so going to pay for this sort of sh*t, oh yes.... (By the way, the Grauniad piece doesn't link to the Ofcom piece, but does self-link to other Grauniad pieces on the obscure terms "Social Networking", "Internet" and "Ofcom", and there is another piece which is about 60% the same which also self links to "broadband" and mobile")

Given what I can glean from these un-linked stats, and what I have read of Ofcom reports available on their site, I would translate this roughly as:

- The older Social Networks the Ofcom and Grauniad people know about are losing users (just ask MySpace....) and they have not picked up where the growth is occurring
- As more older people come online, the overall % of the total population that is Yoof is falling
- The Yoof are getting older - a 17 yr old in 2007 is a 19 yr old in 2009.
- Journos by and large can't read stats

In fact, there is a seemingly contradictory quote from one Jamie Thickett of Ofcom (again unlinked):

Clearly take-up among under 16-year-olds is very high … so we cannot say for certain whether this is people in a certain age group who are not setting up social networking profiles or whether it's a population shift which is reflecting people getting older and having a social networking profile that they set up two years ago,

My take, based on the observation of Real Kids, is that their behaviour hasn't really changed in the last 2 - 3 years. What has changed more is that the Media Hype Machine - New Tech Journos, Pop Academics and DotCom PR flacks - massively overegged The Yoof's reaction to SM in the early days (no doubt to Pump up Their Value) and now more sanguine research is showing the underlying reality, which requires a resetting of the overlying Hype.

In other words, they are just moving along the Hype cycle (now how about that for gratuitous self linking)

And my observation tells me that the biggest Social tool the Yoof still use, by far, is IM. But try and find an academic treatise on that rather than MySpace and Facebook etc......