{"id":4701,"date":"2010-12-07T15:59:25","date_gmt":"2010-12-07T14:59:25","guid":{"rendered":"http:\/\/tokao.com\/?p=4701"},"modified":"2010-12-07T15:59:25","modified_gmt":"2010-12-07T14:59:25","slug":"social-networking-the-present","status":"publish","type":"post","link":"https:\/\/tokao.com\/wordpress\/2010\/12\/07\/social-networking-the-present\/","title":{"rendered":"Social Networking: The Present"},"content":{"rendered":"

Social Networking in Web 2.0: Plaxo & LinkedIn<\/strong><\/p>\n

Mark Suster who joined GRP Partners in 2007 after having worked with GRP for nearly 8 years as a two-time entrepreneur. Most recently Mark was Vice President, Product Management at Salesforce.comI wrote in his last post<\/a> where he\u00a0discussed the origins of social networking online, beginning with CompuServe, Prodigy, the Well, then the rise of AOL, Geocities and Yahoo Groups. Next began the era of \u201cspam-based\u201d networks of which Plaxo (founded in 2002) was the king. \u00a0Co-founded by Sean Parker (yes, the same one who worked with\u00a0Mark\u00a0Zuckerberg in the early days of Facebook), it encouraged groups of people to email everybody in their email address books and \u201cconnect\u201d on Plaxo so that when any of their contact information was changed online it could by\u00a0synchronized\u00a0with everybody\u2019s local computer version and thus we could all stay in touch.<\/p>\n

There was a backlash against the Plaxo spamming yet it paved the way for everybody who came after them to get users to drive viral adoption and we\u2019d throw up our arms and say, \u201coh boy, here goes another social network that my friends are going to spam me about\u201d mentality that made it acceptable for everybody who came afterward.<\/p>\n

And come after they did. \u00a0While Plaxo never figured out what to do with us once we were all connected online, LinkedIn did. \u00a0They formed us into networks of networkers. \u00a0It was suddenly now not only about whom I was connected to, but who they knew and how I could get access to them. \u00a0We suddenly all wanted intros. \u00a0It added a new dimension to online social networks \u2026 business networking. \u00a0And they encouraged us to part with a lot more data about ourselves making LinkedIn our virtual resume.<\/p>\n

And importantly Web 2.0 ushered in the era of \u201cparticipation\u201d \u2013 we all know that. \u00a0But less considered is the fact that the success of the Web 2.0 companies versus the Web 1.0 ones were enhanced because they coincided with hardware that allowed us to capture more content instantly \u2013 namely images and video \u2013 otherwide Web 2.0 might have been a lot less differentiated. \u00a0Suddenly we were all creating blogs on Blogger.com, Typepad & WordPress. \u00a0We started uploading images of ourselves to our blogs.<\/p>\n

But the masses didn\u2019t want to blog. \u00a0They wanted to publish pictures of themselves & their friends, share them, communicate with others, stay connected, have common experiences, find people to date, etc. \u00a0As I\u2019ve said, it\u2019s the same shit as the 1980\u2032s \u2013 I swear.<\/p>\n

Modern Social Networking: Friendster, MySpace & Facebook<\/strong><\/p>\n

We all know Friendster was the trailblazer in this category allowing people to create personal pages and connect to other people in a LinkedIn style but without the \u201cbusiness\u201d and with a little more interactivity (let\u2019s face it, for the longest time most users \u201cfriended\u201d people on LinkedIn but then never really did much else). \u00a0But Friendster\u2019s computer systems couldn\u2019t keep up with the explosive growth (reportedly due to the complexity of the security model set up to control connections, privacy and authenticity of users) so MySpace was hot on the heels and swept up the market in a very rapid ascent. \u00a0Friendster was\u00a0DOA<\/a>.<\/p>\n

And there it was \u2013 MySpace was growing at the exact time we all had cheap digital cameras, smartphones with cameras and new, cheap video cameras like the Flip that allowed us to create video.<\/p>\n

Except that MySpace didn\u2019t handle images or video well. \u00a0Luckily Photobucket & ImageShack did. \u00a0So users put all their photos on Photobucket & their videos on YouTube and shared them with their friends through MySpace.<\/p>\n

Fox bought MySpace for $580 million and then did a deal with Google worth more than the purchase price to serve up ads. \u00a0For a nanosecond Rupert Murdoch seemed like the smartest guy on the Internet. \u00a0Google acquired YouTube for $1.65 billion, which at the time seemed laughably high and now seems prescient. \u00a0Google turned YouTube into one of the most valuable future Internet properties. \u00a0MySpace would have liked to own YouTube but didn\u2019t have the public stock valuation to purchase them at the price that Google did.<\/p>\n

MySpace later bought Photobucket for $250 million + $50 million earn out. \u00a0It did not have the same success as Google\u2019s acquisition and MySpace sold Photobucket 2 years later to a relatively unknown Seattle-based startup called Ontela for a reportedly $60 million.<\/p>\n

Murdoch seethed at these \u201cstartups\u201d getting rich off the back of MySpace. \u00a0The conventional wisdom at Fox\u2019s headquarters is that MySpace had \u201cmade\u201d both YouTube & Photobucket by allowing them distribution. \u00a0MySpace vowed not to create anymore million dollar successes off of their backs that Google could then acquire.<\/p>\n

So Fox ludicrously\u00a0set up a quasi internal innovation center called Slingshot Labs. \u00a0The goal was to create innovations outside of MySpace and then MySpace would acquire them at pre-agreed prices based on how well they performed. \u00a0This was Politburo-style innovation and was laughable. I literally\u00a0snortled<\/a> when I heard that they were going to do this. \u00a0It was obviously a scheme set up by young entrepreneurs to line their pockets and some big-company executives who didn\u2019t understand innovation.<\/p>\n

Enter Facebook. \u00a0It had grown stratospherically from 2004-2007 to 100 million users, which actually was slightly smaller in December 2007 then MySpace was. \u00a0Facebook was everything that MySpace wasn\u2019t. \u00a0It was: up-market, exclusive, urban, elite,\u00a0aesthetically\u00a0pleasing, ad-free and users were verified. \u00a0MySpace was: scantily dressed, teenaged, middle-America, design chaos and on ad steroids.<\/p>\n

But the critical distinction in the direction of both companies was that while MySpace was putting up moats to keep outside companies from innovating and making money off their backs, Facebook took the opposite approach. \u00a0It launched open API\u2019s and created a platform whereby third-party developers could come build any app they wanted and Facebook didn\u2019t even want (yet) to take any money from them to do so. \u00a0So along come companies like Slide, RockYou & Zynga who wanted to build apps across all the social networks but were green-lighted the hardest by\u00a0Mark Zuckerberg.<\/p>\n

\"\"<\/p>\n

It was at that moment that a 22-year-old\u00a0Mark\u00a0Zuckerberg completely schooled the 75-year-old Rupert Murdoch. \u00a0Within the next 12 months Facebook users doubled to 200 million while MySpace stayed flat at 100 million. \u00a0The lesson was learned over 30 years in Silicon Valley: you create ecosystems where third-parties can innovate and thrive and you become the legitimate center of it all and can tax the system later. \u00a0Ask Microsoft, Autodesk or Salesforce.com \u2013 the evidence was there from Seattle to Sand Hill Road.<\/p>\n

Facebook went on become larger than even Google and Yahoo! in terms of time spent on the sites. \u00a0Slingshot Labs was unsurprisingly closed within a short period of time and its properties sold-off or dismantled. \u00a0Duh.<\/p>\n

Social Networking goes Real Time: Twitter<\/strong><\/p>\n

While Facebook was built on the idea that all our information was private and shared only between friend (before they changed this after the fact), Twitter was born under the idea that most of the information shared there was open and viewable by anybody. \u00a0This was revolutionary in thinking and worked because as a user you understood this bargain when you started. \u00a0Twitter is not the place to share pictures of your kids with your family.<\/p>\n

Another Twitter innovation was \u201casymmetry\u201d because you didn\u2019t have to have a two-way following relationship to be connected. \u00a0You could follow people who didn\u2019t necessarily follow you back. \u00a0This allowed followers to be able to \u201ccurate\u201d their newsfeed with people that they found interesting. \u00a0Twitter restricts each post to 140 characters so users often share links with other people \u2013 one of the most important features of Twitter. \u00a0So this combination of following people you found interesting who share links drove a sort of \u201cnews exchange\u201d that mimicked many of the features of RSS readers except that it was curated by other people!<\/p>\n

Twitter is much more. \u00a0I\u2019ve written extensively on the topic<\/a>, but in a nutshell it is: an RSS reader, a chat room, instant messaging, a marketing channel, a customer service department and increasingly a data mine.<\/p>\n

But what is magic about Twitter is that it is real time. \u00a0In most instances news is now breaking on Twitter and then being picked up by news organizations.<\/p>\n

The one major thing that Twitter doesn\u2019t have figured out quite yet is that platform thing or at least how to encourage a bunch of 3rd-party developers to build meaningful add-on products. \u00a0Twitter seems to have become a bit allergic to third-party developers (or maybe vice-versa). \u00a018 months ago 25% of all pitches to me were ideas for how to build products around Twitter\u2019s API. \u00a0Now I don\u2019t get any. \u00a0Not one. \u00a0Yet the number of businesses looking to build on the Facebook platform seems to have increased.<\/p>\n

Given I\u2019m a passionate user of Twitter, I sure hope somebody there will re-read the MySpace vs. Facebook section above. \u00a0Lesson learned (to me at least) \u2013 let people get stinking rich off your platform and tax \u2018em later. \u00a0That way other companies innovate on their own shekels (or at least a VCs) and let the best man win. \u00a0Close shop to try and control monetization and you can only rely on your own internal innovation machine & capital. \u00a0Seems kinda obvious or am I missing somethign? \u00a0Rupert?<\/p>\n

Social Networking is Becoming Mobile: Foursquare and Skout<\/strong><\/p>\n

The trend that is unfolding before our eyes is that Social Networking is now becoming mobile and that adds new dimensions to how we use social networks. \u00a0The most obvious change is that now social networks become \u201clocation aware.\u201d \u00a0The highest profile brand in this space is Foursquare. \u00a0Pundits are mixed on whether Foursquare represents a major technology trend or a fad but undoubtedly it has captured the zeitgeist of the technology elite at this moment in time. \u00a0At a minimum it has been a trailblazer of innovation that a generation of companies are trying to copy.<\/p>\n

As our social actions become both public and location specific it opens up all types of future potential use cases. \u00a0One obvious one is dating where players like Skout are trying to cash in on. \u00a0When you think about it, young & single people go out to bars & clubs in hopes of meeting people to \u201chook up\u201d with. \u00a0In a perfect world you\u2019d like that person to be compatible with you in additional to being attracted to them, yet as a society we go into bars and have no idea what it behind any of the people we see other than the immediacy of their looks and whether we can get enough liquid courage into ourselves to talk with them and learn more.<\/p>\n

It\u2019s obvious to me that the future of dating will involve mobile, social networks that tell us more about the compatibility of the people around us. \u00a0It doesn\u2019t take a rocket scientist to see how big people like Match.com and eHarmony became on the trend of helping us find our dating partners and why this would be improved my mobile, social networks. \u00a0How long this trend takes is unclear \u2013 but in 10 years I feel confident we\u2019ll look back and say, \u201cduh.\u201d<\/p>\n

FourSquare obviously brings up a lot of interesting commercial opportunities. \u00a0For years I saw companies pitching themselves as \u201cmobile coupon companies\u201d and I never believed this would be a big idea. \u00a0I\u2019m not a big believer that people walk around with their mobile devices and say, \u201clet me now pull out my device and see wether there are any coupons around me.\u201d \u00a0I always said that if an application could engage the user in some other way \u2013 like a game \u2013 it would earn the right to serve up coupons as a by-product. \u00a0I think that is what Foursquare has done well.<\/p>\n

In the future I don\u2019t believe that Foursquare\u2019s \u201ccheck-in\u201d game with badges will be enough to hold users interests but for now it\u2019s working well. \u00a0I\u2019ve always said that if Foursquare has a \u201csecond act\u201d coming it could be a really big company. \u00a0In the long-run I believe that check-ins will be more seamless \u2013 something handled by infrastructure in the background. \u00a0So I expect more and new games from Foursquare in the future. \u00a0One awesome features of today\u2019s Foursquare that often isn\u2019t talked about is the ability to graph your friends on a real-time map and see where everybody is. \u00a0This is a killer feature for the 20 and 30 something crowds for sure. \u00a0Me? When I go out I mostly prefer to eat in peace with my wife and friends without people knowing where we are \u2013 I guess we all get old \ud83d\ude09<\/p>\n

In the next post I will make some predictions about where social networking is going next. \u00a0And only one hint \u2014it isn\u2019t all dominated by Facebook. \u00a0Stay tuned. \u00a0If you can\u2019t wait you can get a sneak peak in the PowerPoint presentation below.<\/p>\n

(from techcrunch<\/a>)<\/h5>\n

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