The Guardian reports on Hi5, a popular social networking site in the Latino communities of the US, among others. It 72x smaller than Facebook, says Nielsen, with 0.8% reach into the world’s online audience compared to Facebook’s 56% reach.

In the nine major internet markets (UK, US, France, Spain, Germany, Switzerland, Italy, Brazil and Australia) Hi5 has 3.4 million users compared to Facebook’s 240 million, so that gives an idea of scale.

So in the face of Facebook dominance, how should any other social networking site adapt its business model? In the case of Hi5, the plan is to focus on casual gaming, which doesn’t seem a bad idea. GigaOmreports the launch of the Hi5’s game developer portal; if you can’t compete on scale, then why not try focusing your energy on one competitive niche?

Hi5 made the strategic decision last year and hired games developer-turned-executive Alex St John as chief technical officer. It also raised$14m last week in a second round of venture capital funding. At the launch, he said Facebook had discovered a new kind of game platform, that’s hugely popular, and they’re going to squander it”, describing many of the site’s games as “parasitic spam engines”.

Later that evening St John was repeatedly flung to the floor by a sumo wrestler in stunt designed to show that Hi5 could take on Facebook. Presumably the ideal outcome would be for him to have won, which is where the symbolism fades a little…

Access the original article online at: http://www.guardian.co.uk/media/pda/2010/jul/22/hi5-social-gaming