Phan+T.+Strategy+Report

Phan T.

To: Proximity Media Teams From: Truc Phan Date: February 23, 2010 Subject: Strategy Report

My strategy analysis is on BlackPlanet, which is a social networking site specifically targeting African Americans. They differentiate themselves by attracting to a niche market and offering a dating and job search forum. They are successful in capturing a specific group of Gen Y, but they seem to be losing users and visitors over the years meaning they need to improve their site by improving some of its offerings to make them stand out.


 * Profile**

BlackPlanet is the leading social networking site for African Americans. They have more than 5 million unique visitors monthly and more than 15 million members (Interactive One, 2010). Out of all their visitors, about 77% are African Americans (Nielsen Online, September 2008).

BlackPlanet was co-founded by Omar Wasow in September 1999 and operated under Community Connect Inc. which was "the largest social media network serving urban communities" in 2008 (Interactive One, 2010). CCI also hosts sites such as MiGente and AsianAvenue which targets other minority groups.

In May 2008, Radio One acquired CCI for $38 million. Radio One is a radio broadcasting company that as of December 2008, owns and operates 53 radio stations in 16 American cities (Reuters, 2010). They are headed by Cathy Hughes, Chairman and her son, Alfred Liggins, CEO (Wikipedia, 2010). CCI operates under Radio One's Interactive One division which controls their online communities. Their revenue comes from the sales of local and national advertisement including advertising aimed at diversity recruiting. One of their main advertisers is Monster,Inc (Reuters, 2010).


 * Competitive Landscape**

BlackPlanet has two competitive forces driving the business. One is the fact that many social networking sites offer the same basic services. Facebook and Myspace are the big competitors in the this industry. According to siteanalytics.compete.com, BlackPlanet only has 1.5 million unique visitors monthly compared to Facebook's 134 million and Myspace's 51 million. The way they compete is by differentiating themselves a little from each other to provide something special to their users. Facebook for example has their iconic news/mini-feed, Twitter has their live status updates, and Myspace is known for their music connections.

BlackPlanet's job and dating forums have competition from other social networking sites targeting a specific need to users such as LinkedIn. It provides a way for professionals to connect to each other and companies such as those from Fortune 500. There are also many dating sites available for free such as Okcupid and Casual Kiss or at a low monthly charge such as EHarmony or Match.com.

The second competitive force is the users' ability to switch to a different site anytime they want. It costs them nothing and takes very little time to get started. If we look at the trends and see how fast users switch sites, we can say that they are the ones controlling the market in the social networking industry. Many users started using Friendster in 2002 then jumped to Myspace and eventually to Facebook. Facebook is now the leading social networking site globally.


 * BlackPlanet's Strategy**

Unlike their competitors, their strategy is not to target the mass market, but to attract the niche market of African-Americans. It is difficult targeting everyone because they have to compete with the powerhouses such as Facebook and Myspace. Wasow said that BlackPlanet was launched with the intentions of unifying the black community via the Net, giving them a cheap, easy and powerful way to network (Diaz, 2004).

They provide to their users a personal page, email address, instant messaging, and chat rooms. Every user is given a page and they can create it however they want by putting only the informations and pictures they want to publish. This way they can control the privacy of their own site. More advanced users can be more creative by using html codes to make their pages stand out.

They also have news, job opportunities, and a dating service. Users can meet new people through job searching, networking, and finding a soul mate (or just hooking up). Employers and recruiters interested in the African-American community can reach them through BlackPlanet. Their dating service is a free and easy way to meet new black singles. It is the most popular activity for their users.


 * Implications on Gen Y**

BlackPlanet's strategy has made them the #1 social networking site for African Americans. Although they have a lot of competition, many users have an account on more than one social networking site, so some are using them together. Some of these users use BlackPlanet to meet new people and find opportunities instead of just logging on and checking to see what existing friends are doing. They provide a way for African Americans to meet each other and get involved in the community through the internet. Wasow attributes the success to the "much longer history of a tight, cohesive community of African Americans [compared to other minority groups]" (Diaz, 2004).

Although they show a good support from the African American community, I believe that there are many things they need to improve in order to attract and retain their target audience. Their job forum has been lacking and been ignored. Many users have complained that the site no longer attracts professionals, but instead, "raunchy" and "sex-crazed" users. They need to improve this sector by recruiting more companies and employers. If there are more jobs available and more companies actively looking for employees in this site, this will in turn attract more users.

Their management team needs to take a proactive approach and improve all of their sectors. It seems that what they are offering is only sub-par. They need to make their site stand out because if they don't other new and innovative sites will dominate. It is so easy for users to switch, that if BlackPlanet doesn't keep up with its competition, it will be lost in the pack.


 * References**

Compete. (2010.) Site Statistics for Blackplanet.com. Retrieved on February 23, 2010 from, http://siteanalytics.compete.com/blackplanet.com/

Diaz, V (2004, 27 February). Color My (Virtual) World: BlackPlanet. //ReadMe 4.3//. Retrieved from http://journalism.nyu.edu/pubzone/ReadMe/article.php%3Fid=299.html

Interactive One. (2010.) Interactive One: Our Network. Retrieved on February 23, 2010 from, http://www.interactiveone.com/network.php

Nielsen. (2009.) Nielsen Spotlight: Multi-cultural Advertising. Retrieved on February 23, 2010 from, http://en-us.nielsen.com/etc/medialib/nielsen_dotcom/en_us/documents/pdf/consumer_insight.Par.80697.File.pdf

Reuters. (2010.) Profile: Radio One, Inc. (ROIAK.O). Retrieved on February 23, 2010 from, http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=ROIAK.O

Wikipedia. (2010.) Radio One (company). Retrieved on February 23, 2010 from, http://en.wikipedia.org/wiki/Radio_One_%28company%29