(* Source: Duncan Riley *) 

In an age where everyone presumes that Facebook reigns supreme, the question becomes: how is it possible for Friendster to grow at 40%?

Prevailing theory relating to the growth of social networking sites suggests that social network popularity is a one or the other proposition in a finite marketplace. In others words users will abandon MySpace or Friendster when they begin using Facebook, and that the number of overall users isn’t growing. The growth rates from both MySpace and Friendster at the same time as Facebook is booming would suggest that the theory is wrong.

Friendster growing is good for the entire Web 2.0 industry. There can be no downturn without a broad decline in user numbers across many sites. Friendster proves that despite strong, and some would argue superior competition, there’s still room for any Web 2.0 startup to grow, even in a crowded vertical marketplace. There is more Web 2.0 cake for everyone.

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