The Rise of Niche Social Networks and That Money Question

By Heather Green

With the phenomenal growth of MySpace, it makes perfect sense that over the past year, a host of niche social networks including Nike’s Joga soccer site, Dogster, and the boomer site Eons would pop up. It’s impossible at this point to beat MySpace in the general market, so go niche.

This morning, I spoke with the Michael Sanchez, who kickstarted the fastgrowing CafeMom social network late last November. The site has around 100,000 registered users and is expected to do 20 million page views in March, up from 1.8 million in December. Definitely impressive growth.

So the questions become, how big can a niche site get and how much money can you make? Of course, that depends on the demographic and interest and how effective you can be in coming up with smart advertising that has an impact for marketets. That can help you get higher CPMs. But the ultimate problem is the very nichyness of a niche site. As Brian Balfour points out, you need scale to justify paying your own ad sales to sell your advertising. He has a great point that maybe most niche sites only make sense if they can team up with other niche sites and sell advertising across them. That also means you need to get smarter about a broader set of data, if you’re going to pull together sites about dog lovers and moms, for instance.

Either way, it seems like it makes sense to create a joint venture of other sites, or simply to sell the niche social network to a bigger company, such as a Viacom or an iVillage, that can integrate what you have into what they have. If Cafemom can keep growing, it will likely be a good buyout bet. But in the meantime, because the company also runs an older more mature site called ClubMom, it already has an advantage in terms of economies of scale (ad reps, bandwith, etc) than most standalone niche sites.



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