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Adding Mobility to Online Social Network Sites

The market for mobile communities and user generated content will be worth $13.1 billion by 2011, with photo and chat based services being the top revenue generators, according to Informa and strategic partner, the Mobile Entertainment Forum (MEF).

"The meteoric rise of such sites as MySpace, Bebo and YouTube shows significant consumer demand for social interaction in the digital space," said Daniel Winterbottom, senior analyst at Informa and author of their report. "Adding mobility to these services represents a huge opportunity for mobile operators, who will benefit from a reduction in churn levels, as well as significant increases in data traffic," he added.

To add further weight to the importance of this rapidly emerging industry, O2, the UK mobile phone giant, recently announced that it was examining options for getting Bebo onto its handsets, potentially emulating the U.S. deal between Helio and MySpace.

"Mobile communities which combine user-generated content (UGC), branded content and always-on user interaction are a key growth driver for the mobile entertainment industry," commented Patrick Parodi, Global Chair MEF. "Taking communities mobile, combines entertainment and user interactivity on a new level, reinforcing the mobile handset's position as the leading portable entertainment device. We set up the MEF community initiative to focus on understanding the user behavior and business models which harness these communities and have the potential to create over a billion dollars of value in the next 5 years."

Chat services currently represent the largest segment of the market, driven by the fact that they are handset agnostic and can be conducted over the most popular form of mobile data, SMS.

However, as increasing numbers of photo and video enabled devices enter the market, the volume of users uploading images or clips is expected to grow significantly. In 2006, 46 million users are expected to submit video clips to services such as SeeMeTV or YouTube from their mobile phone, rising to 198 million by 2011.

The report goes on to detail further advantages to be gained from offering mobile communities. "The search and discovery process for mobile content has been poor in many cases," commented Winterbottom. "Enabling users to rate and recommend content to other members of their community has the potential to drive consumption and create an environment where cross-selling and up-selling is easily achieved."

But there are pitfalls that must be avoided if services are to achieve success. Moderation is vital to protect users and to adhere to industry guidelines, and may also protect against potential legal liability. Pricing is another key consideration. Mobile community services need to offer value to the consumer and also need to be priced to reflect the target demographic.

Prohibitive and confusing data charges can only serve to stifle the potential growth of this segment. Most analysts seem to agree that service provider's prior efforts in this space have clearly proven this point, time and time again.

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