The competitor I'm most worried about is Xanga. I remember four years ago when Xanga and Livejournal were the only two social networking sites ... and penetration (for an early adopter site like Xanga) was incredibly high at my school. Everybody I knew had a Xanga account.

Since then, the quality of their service has remained relatively static (which in the web world translates to declining quality), so they've lost a lot of market share. Most people I know have moved onto other services like Facebook (a significant number of people only registered Xanga accounts to comment in other accounts; Facebook fills this social networking void) and MySpace.

When I first started working on Tabulas, I was always concerned with Xanga. Xanga was one of the sites that could have been the next MySpace, but for whatever reason they never made that huge jump that MySpace was capable of pulling off.

You know what's funny? I think after MySpace sold out, I think those Xanga guys finally woke up to what kind of gold mine they were sitting on. You notice since then they've launched "upgraded profiles, which is in essence competing with Facebook/Friendster. They've even taken the obligatory measure of trying to police their network with "tagging" of accounts that violate the TOS.

In any case, I think they're going to have a very difficult time transitioning into this field - they've already lost a lot of market share and have an uphill battle with Facebook (which poached their primarily college/high school demographic) and MySpace.