Whether you realize it or not, social networking is something you do every day. Each time you tell a friend about a good movie, bore a neighbor with pictures from your kid's birthday party or catch up on gossip at work, you are reaching out to people you know to share ideas, experiences and information. The genius of social-networking websites such as MySpace and Facebook lies in their ability to capture the essence of these informal exchanges and distill them online into an expanding matrix of searchable, linked Web pages.
Nearly half the people who went online in the U.S. in October--83 million, according to the research firm comScore Media Metrix--visited MySpace or Facebook, making social networking one of the most popular activities on the Web. MySpace has the clear lead, with a U.S. audience of 72 million--more than twice that of Facebook's--and 2007 profits estimated at $200 million.
Although Facebook is expected to earn just $30 million, the three-year-old site is getting all the buzz. One reason: Microsoft recently bought a mere 1.6% of the company for $240 million, an investment that values Facebook at $15 billion, which is in the ballpark of Gap and Xerox. That's far smaller than Google, valued at about $200 billion, but both Facebook and MySpace think they are made of the same game-changing stuff. Like Google, they want to change the way you live and work online. And like Google and practically everyone else on the Internet, they are betting that advertising will make them, and their investors, unimaginably wealthy along the way.
Worth it? Check out Time.com for more.
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