You can stop wringing your hands over the “waning interest in social networks.” After a couple of months of decline that triggered gigabytes of speculation, the flagship sites in the category came back strong in March. Some argued that Facebook, for instance, had peaked as its meteoric rise f the past 18 months leveled off, but after 32.4 million uniques in February, the site grew to 35.5 uniques in March, according to comScore. MySpace, also too often discussed as a has-been, spiked to 72.7 million after three months in the 68 million user level. In fact, almost all social media enjoyed some kind of a come back as the winter wound down. Blog traffic at Blogger.com and Six Apart properties expanded their audience as well. Analyzing social media traffic patterns is a chancy exercise this early in the game. Given the accelerated growth in the category, it has been hard to detect any seasonal influences (school being in or out, etc) on activity at these sites. The long terms threat to social media is not boredom; it plugs into a basic human need that perpetually refreshes itself. The real threat is that the functions of social network will become baked into Web browsers, email clients and operating systems. The end game for social networks is not that one or two dominate the scene but that it becomes a feature, not a brand.

When NPD Group released its latest sales stats for the music industry this week, the wrong-headed headline at most sites focused on the Apple connection. According to 2007 sales, iTunes is now the second most important music retailer, right behind Wal-Mart. Granted, this is a landmark in digital content history, but the scarier story for all publishing brands is in the deeper stats. NPD reports that 2007 saw more music acquired overall (up 6%), mostly from digital purchases, but the actual level of music spending declined 10%. In other words, in a digital world, publishers are struggling to extract the same value even from an expanding audience. This is something we have been discussing in the pages of MIN for years now. The move from physical to digital media surely carries cost savings but it also represents a significant decline in available revenue. How many online ad impressions and audience does it take to balance a lost page of print advertising or a lost magazine subscriber? The music industry continues to be the canary in the coal mine of digital transformation, and its song is not sweet.