Social Networking Goes Niche

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The sites that commend the highest figures per ad impression are typically those that can tell the advertiser something about their audiences' likely spending habits. Sites focused on shared interests allow advertisers to better target their messages.

Higher Costs

Ragan of itLinkz says advertisers are paying more each time their ads are viewed on his site than on more general social networks. Advertisers, he says, are paying double-digit figures for every 1,000 times their ad is viewed. MySpace's average charge per 1,000 views is considerably less than $1, according to an August eMarketer study citing press reports. "There are only two questions that we get," Ragan says. "How can I get more ad inventory and can I lock that rate in for a year?"

Ashton Peery, chief executive officer of Top10 Media, takes the target-marketing approach even further with StyleFeeder, a shopping-focused social network. Top10 Media creates Web entertainment platforms around which communities can interact, post comments, and discuss content. On StyleFeeder, users post products they like and find friends who like the same items or share a similar style. Products posted are linked to online merchants selling the items. StyleFeeder gets a cut of all purchases from recommendations. "When people want to get business done, they want a social site that is much more targeted," says Peery.

The other aspect fueling targeted sites is privacy. Some users are wary of posting on the larger sites because they don't want their boss, a college admissions officer, or relative finding pictures or posts they would rather keep for friends' eyes only, says Six Apart's Anker. Because they reach smaller audiences, targeted sites have less exposure than a major online destination such as MySpace, which had more than 64 million visitors in February.

Privacy Tools

Social networks are also satisfying this need by providing tools that allow users to select who sees content. The big networks, such as MySpace, have adopted limited privacy controls. (MySpace, for example, allows users to keep their entire profile private.) However, the newer social networking tools and platforms such as Vox have more targeted controls, allowing users to choose who in their vast network sees particular information.

Adesso Systems, which creates business and consumer Web applications, has built a "Tubes" networking and document sharing platform. The downloadable software allows users to segment their social network into as many groups as they want and then send information or files only to that group. For example, a user could have a Tubes toolbar on their computer with a folder for family, a folder for friends, a folder for a specific group of close co-workers, and then another folder for view by everyone in the office. When someone wants to share a photo, document, e-mail or other file with the group, he or she just drags it into the respective tube.

The company plans to add Web page capabilities, such as social networking user pages or blogs, later this year, says Steve Chazin, the company's vice-president of marketing. Already, the Tubes' site has seen 500,000 hits, says Chazin, making him confident there is sufficient user demand. Why? "There are a lot of people who don't want to share pictures of last night's party with their parents," says Chazin.

Holahan is a writer for BusinessWeek.com in New York .