Online Social Network Wars: Features (new vs proven) vs Monetization (Conversion vs Quantity of visitors)

I have been monitoring the recent events in the Social Network wars between Facebook and MySpace for first place in Social Networks, however the third placer Hi5 has recently announced some new features which would make significant effect in the wars of first place.

Facebook, which is currently number 1, has recently starting to redesign their homepage to compete their Status function to Twitter’s (what are you doing?) function. Their current redesign patterns them with FriendFeed, which is one of their Applications thru the developer API. I would certainly agree that Twitter has a huge potential to dominate the real time updates and possibly search in the future, however, Twitter being quite unreliable (being down) and being hit by a worm is giving Facebook a big window of opportunity to get people to switch to their Status function. Competing, however, with your own developer API seems to be wrong. If you’re going to allow developers to provide you applications and then competing against them (while they’re getting a lot of attention) is just not right. Using your 3rd party developers as your research and development department would be more fair if you do share revenues with them, otherwise how would these developers survive the sudden ban on their website where Facebook services gets cut of in Friendfeed (violation of TOS, competition). But where is the answer to Facebook’s problem on monetization strategies?

MySpace is doing the right thing as they recently done more deeper collaboration with advertisers  (MySpace’s new weapons) that would be more effect and attract more advertisers to join. And with the recent release of their MySpace Lite, they finally gave users a chance to browse their website faster and removes all those unneccessary clutters and personalization. It’s a great move for them as it makes MySpace more cleaner (which used to be Facebook’s Strength) and more uniform, but at the same time, allowing users to still customize their websites for non-lite users. I believe MySpace is doing a great thing with their website, better monetization and better features might bring them back to number 1.

Hi5 is suddenly reappearing in the press lately with an announcement of a partnership between them and playspan (micropayment service). When the top 2 are focusing on new features, hi5 is focusing on how they could monetize. It’s a nice move for them to solve the growing problems of Social Networks to prove their value, as Facebook struggles to profit from its operations despite high valuations. Yet the question still remains on how much could Hi5 profit from such partnerships, would it be enough to solve the growing problem of monetization of Social Networks?

If Facebook was to get dominance against Twitter, it would mean dominance over the web. If they were to succeed, not only would they be the number one social network in the world but might be that they’ll become one of the bigger web companies. However, MySpace seems to be doing everything quite right, focusing on more interaction and more effectivity for advertisers. This could attract more advertisers as their effect is much much more than other social networks. With the update of their Features, it could get them close to Facebook. Getting the users that want more uniformity and others who want customization. I believe MySpace will be getting more hits as the MySpace Lite is being Rolled out. Hi5 being the 3rd largest social network, is focusing on one main thing which is monetization (conversion vs quantity of visitors). It’s great what they’re doing and trying to solve a problem that all Social networks (if not all web 2.0 websites) are facing these days. If they do it right, they could become the most profitable social network that exists.