The current proliferation of social media sites is the most pervasive phenomenon on the Internet today. Not since the dot.com explosion has the there been an Internet trend that is so widespread in its popularity. The comparison with the dot.com growth is in fact one that is made by many industry observers, and while there are a number of clear similarities, there are also some important differences. It is expected that by early 2009, all the various social media sites will have more than 1 billion members. That number is predicted to grow until 2010, with a leveling off on the number of new members expected by 2012. The combined revenue from these sites, which in 2007 reached almost $970 million, is estimated to balloon to a whopping $2.4 billion by 2012.
 

Membership growth in social media sites varies greatly from region to region. The Asia Pacific region accounts for the lion's share of users, with 35% of the total users expected by the end of 2007. EMEA accounts for about 28% of all users, North America follows closely with 25% percent, and the Caribbean and Latin America trails behind with 12% of all users. With the inevitable crowding of the social media site industry, many observers feel that consolidation of the market is a sure thing. This has given rise to some predications that the smaller individual social media sites will be swallowed up by the bigger players in the field. Some experts feel however that this is not necessarily the case. In particular, social media sites with a focus on special interests are expected to survive the trend towards consolidation.
 

The extensive hype and excitement currently surrounding social media sites is perhaps what inspires the comparison to the dot com boom, but in the midst of all the buzz, there is a certain degree of trepidation felt by many as well. While many investors are naturally excited about the potential of social media sites, the fact that these types of web sites have not been proven for the long term is causing some hesitation. The promise of riding on the wave of the next big Internet phenomenon is a tempting prospect, but it is tempered by the uncertainty of social media sites as a long term sustainable industry. The most cautious industry observers have even gone so far as to suggest that most social media sites would do well to hold off on an IPO for the time being.