In a super competative environment niche rules. Over the past six months I have been watching many niche social networking sites pop up around the web. Today Mashable reported another one, Elhood for Hispanics. Thats not all. There is Inked Nation for tattoo enthusiasts, The Golf Space for golfers, MuslimSpace for those that practice Islam, and the list goes on. (On a side note, yes some of these sites are violating MySpace’s trademark and it is a matter of time before they get prematurely shut down.)

I tried to send this message in my controversial post about the threats to small publishers. The web is changing very fast. A year or two ago dating sites were experiencing unbelievable growth and the industry was looking great. Today between Myspace and free sites like PlentyofFish, the online dating industry no longer looks so healthy.

When Myspace was bought out by News Corp (NWS) many people believed it was just another fad like geocities and other trendy sites. Last week Myspace became the number one site on the web in terms of traffic. No people are changing their mind about News Corp’s buyout.

Guess what, you don’t stay at number one forever. Just like stocks and commodities everyone thinks its a hot buy when the price is going up. To me #1 says this is the peak and it is time to move on to new ventures. Rupert Murdoch and Levinsohn need to view Myspace as a peak of the mountain rather than a sign of eternal web dominance. Right now this is like owning the hottest nightclub in the city, not owning the city itself.

Change is happening fast online and off. Futurist and very accomplished inventor, Ray Kurzweil, points out that progress is exponential. When people imagine what the next 50 years are going to look like, they try to project the changes experienced in the last 50. Rather, the next 50 years of change and growth is going to happen in a mere fraction of the time.

Myspace appeared out of no where almost as fast as Alex Tew made a million dollars off of his much-copied pixel selling site. Combine rapid growth with a super-inflationary asset and monetary environment and get rich quick has never been more true.

A lot of sites want to be the next Myspace. The ones that try to pull in everyone will fail — if they are not already experiencing huge success. The sites that go after the niches will mop up the markets Myspace has missed. Whats next? Its already happening, its just below most of our radars.

I can’t tell you whats next, but I will give you a few hints about social networking. First, niches can be topical and geographic. Orkut dominates Brazil. MySpace dominates the US. Bebo dominates the UK. There are already plug-ins for vBulletin that make it function very much like Myspace with comments, friends, all on a profile page. There are also a few other pre-made programs such as AlstraSoft E-Friends (which I am told sucks), a “Myspace Module” for Drupal, Buddy Zone by Vastal, phpFOX, and the list goes on. Personally, I suggest adding social networking functions on to your existing content sites rather than trying to be the MySpace of [insert niche here.]