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Classmates.com: Worst Strategic Blunder ever?

classmates.jpg

Question: Why is classmates.com still around?


According to wiki,

Classmates.com has more than 40 million[3] active members in the United States and Canada, and an Alexa Internet traffic ranking of 499.

And they've been profitable since 2001, apparently.


What's wrong with Classmates, you ask? The almost unprecedented first-mover advantage they've enjoyed as a social networking site is being squandered by their continued ignorance to evolve with, well, social networking.

Let's take a look into Classmates continuing journey into Internet oblivion.

What it had going for them:

1. Started in 1995! On the internet, that's like the 1800's. But seriously, this is a head start and a half.

2. Great domain name (more on that later - it may actually hurt then more now)

3. Network effect - millions of members signing up in droves to re-connect with pre-internet era schoolmates.

4. Classic Web 1.0 publicity: Hey, this worked in the 90's. Email spam when people actually used to read spam, pop-ups before blockers were common, and banner ads plastered everywhere. Oddly, in 2007, they continue to use the same marketing tools.


What went wrong:

1. See point 4 above. These guys are still spamming us to death in 2007. Obsolete methods, to put it mildly.

2. Competing with free. You may have heard of alternatives such as MySpace and Facebook.

3. Social networking gone wrong - no third party aps, no artists connecting with fans or any B2C synergies at all, and a narrow user audience. But most of all, they charge users to connect with others. This is anathema to Web2.0 in so many ways. I was willing to give them a pass on this because in the 90s to early 2000s, this was a common if not suitable approach to business on the Web (before ad revenue meant a bigger payoff). But it's 2007, and they're still at it; they just look foolish now. I'm not sure what value they add that one can't find for free now.

4. Who used the internet in 1995? Not many highschoolers. And college kids? Just discovering the joys of emailing. Classmates was targeted to graduates, not current students, so the young folk didn't sign up. So who did? People in the workforce who had internet access -- offered a way to reconnect with friends who were in their lives before email, they jumped at the chance, and forked over money to do it too.

Web2.0 never seemed to catch on at Classmates.com. Unfortunately, they don't seem to be getting it "right" even now. No one pays to socialize online anymore. MySpace (2003) was built to socialize, and it's always been free for everyone. Facebook (2004) started off closeted to a few colleges, but wised up and welcomes all now. Classmates, on the other hand, is still aimed at getting in touch with people of your past, something that Google is used for now. Classmates is more of an invitation to reminisce, not socialize. And these days, it's not hard to get the email address for people we've lost touch with.

Remember, Gen-Y doesn't even use email anymore. Facebook and MySpace, on the otherhand, emphasize real-time socializing, messaging, content sharing, and identity building. Classmates, comparatively, is a digital phonebook.

And the name, "Classmates", once a strong suit, is now a liability. "Classmates" evokes a very academic image; it's institutional sounding, and doesn't conjure up any images beyond school. MySpace, on the other hand, grew based on its ability to link music artists with their fans. Facebook's rise to fame was based heavily on it's simple photosharing applications, and now, thousands of free aps that let people interact in new and fun ways. Social networks, in other words, contain ecosystems and interactions that are user-driven and defined. On classmates, there's no music, film, or random people carving out their identities.

So why does Classmates continue to charge money to see an email address? Well, I suspect they can't stomach going free because they're still making a lot of money from unsuspecting boomers and users who are still paying monthly dues but not using the "service". But the longer they continue to charge, the more likely it is their strategic outlook resembles jumping off a cliff.

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