The OpenSocial Business Model: Will the biggest social containers win?

November 2, 2007

By David Berlind

I asked two questions during the Q&A session in today’s announcement between Google and MySpace that MySpace would be embracing Google’s recently announced OpenSocial framework of APIs, with executives from both companies. The first question (which I’m really still waiting for an answer on) had to do with how two or more social networking sites will handle the thorny challenge of reconciling dissimilar identity management systems (when the integration involves the exchange of personal profile data). You can see in that post what some possible answers are, but what’s not clear is how, in the demonstration given, unique MySpace IDs are mapped to unique Flixster IDs (the demo involved the incorporation of Flixster social movie reviewing service directly onto MySpace profiles).

Another question I asked had to do with business models in an OpenSocial world. I probably didn’t phrase it during the press conference as well as I should have. But going back to the example of how OpenSocial results in the embedding of Flixster functionality into larger “social containers” like MySpace; It occurs to me that, to the extent the exporter of functionality (Flixster in the demo example) relies on advertising as a business model, the idea that a lot of people might begin to experience an exporter’s content through a container (where the container gets to serve the advertising instead of the exporter) could result in a cannibalization of the exporter’s traffic (and therefore, its ad revenues). Meanwhile, the container (MySpace in this case) benefits, doesn’t it? After all, using the demo as the example, MySpace gets to serve advertising around Flixster’s content. Today, lots of sites (eg: FaceBook) go out of their way to prevent other sites from using HTML’s frames to frame their content and serve their own ads against that content (FaceBook for example purposely “busts” HTML frames).

Therefore, could the OpenSocial network lead to a world where the biggest and mightiest “social containers” win? As you can hear in the full audio podcast we have of the press conference, Google CEO Eric Schmidt answered that question as follows;

It depends on your view of how network effects happen and whether you think a single dominant player comes out in any of these spaces. The history of the Web says that that’s not the scenario that will happen. The history of the Web says that there is enormous diversity in what people are interested in and that people who are willing to take a bet on an open platform whether its a developer or leading site like MySpace get the benefit of a larger pie. It does not end up as a zero sum game. Your question can be rephrased in exactly the same question we asked 20 years ago and 10 years ago and history says that the Internet wins and that the principles of openness; that people can extend things; that in fact they end up winning because the pie gets so much larger in all scenarios.

Given the way FaceBook has come on so strong in the last few months, it would be hard to argue with the idea that no single dominant player will ever emerge so long as the platform is open. But what about a small handful of dominant players like Google, FaceBook, and MySpace. Yes, OpenSocial is also about unlocking whatever profile data you have in your MySpace vault and making it portable to other social networks.

But how often will people really switch after they’ve invested so much time in building their online personas in a MySpace, a FaceBook, or both? Maybe they’ll do it, but my sense is that they won’t do it often or lightly in which case only a few will get to rise to the top. Put another way, Flixster may indeed be a container as much as it is an exporter of data to other containers. But in which direction will most of the data flow? To or from Flixster? My sense is that people will lean in the direction of uber-containers like MySpace and FaceBook (FaceBook has not announced support for OpenSocial) to be their primary containers and specialty function sites like Flixster to serve up data into their containers.

I’m not saying that sites who primarily end up in the role of serving data to larger containers can’t win. But, if you ask me, the existence and adoption of OpenSocial will force many advertising-driven sites back to square one where they’ll have to think hard about how they’ll sustain themselves while also participating. One thing is for sure. Much the same way a day doesn’t go by when some company doesn’t carve out a niche in the FaceBook universe for itself (knowing full well that FaceBook is where the sunshine is right now), support of OpenSocial will be a checklist item for any site that’s in a position to serve data into the larger container sites. Those sites may not realize it right now. But when Google turns on its container (and you know it’s gotta have one coming or it wouldn’t be doing this), a lot of people will have their moment of clarity.

Source:

Advertisements

Facebook Could Challenge Google And Become The Remote Control For The Web

November 2, 2007

by Stephen Wellman

On Aug 16, the blog Facebook Insider reported that TripAdvisor acquired Where I’ve Been, the top travel-related application on Facebook. While TripAdvisor later denied the rumor, the ensuing story exposed something: The exploding number of applications on Facebook. Thanks to its Facebook API program, Facebook is fast becoming the front page for much of the Web.

In July, I argued that Facebook posed a challenge to professional networking site LinkedIn. While I stand by that assessment, I think that in that post I didn’t go far enough. Given just how fast Facebook’s API program is growing, Facebook may present an even more interesting challenge to the Web. Facebook could shape up as a rival toGoogle, Yahoo, and even search itself.

By integrating more applications into its platform, Facebook is trying to transform itself from being just a social networking platform to becoming a full-interactive control panel or remote control for the Web. Unlike earlier attempts to do this — think of the portal model of Web 1.0 — Facebook has designed its API system so that users can access all the Web sites they want without ever leaving Facebook, or opening new Web pages. I suspect that Facebook will expand this functionality so that eventually the entire Web can be accessed through these widgets.

In short, Facebook wants to become the locus of control for much of the user’s Web activity, letting the user seamlessly share travel information, pull in news updates from blogs like TechCrunch, or send questions to the user’s social network with apps like MyQuestions.

If you will allow me to extend the remote control metaphor, Facebook users no longer have to go “out there” in the rest of the Web to get new sites, they can pull them through Facebook, either with invites from the app providers or, more effectively, through their social network itself. The cumulative impact of this could be huge. Just as the remote control gave birth to the couch potato (the ultimate passive TV viewer), so too could Facebook change the game for Web use.

If users no longer need to search to find new cool Web applications, they won’t need to use Google, Yahoo, or MSN as much. Instead, they can rely on Facebook for finding new applications. Now, I don’t think this would mean the end of search, but it could reduce its importance pretty significantly. If that happens, Google loses power and Facebook gains it.

What do you think? Do Facebook and its exploding universe of applications pose a real threat to Google and search in general?

Source:


Facebook’s dilemma: To be OpenSocial or not to be

November 2, 2007

By Dan Farber

Facebook is now the lone wolf, the only major social network not to partake of Google’s OpenSocial APIs. This is understandable. A radical change of course is not easy to contemplate. Facebook is the social networking leader, not in raw numbers but in momentum, demographic goodness and potential. The company was greatly lauded for opening up its platform and social graph to empower developers with APIs and a markup language.

Now Facebook is facing the hordes, 200 million foot soldiers–members of competing social networks. Google, MySpace, Six Apart, Ning, Bebo, hi5 and other social networks are giddy with delight in that now, in the name of greater openness than Facebook and comparable functionality, they have a Trojan horse to stalk Facebook, which has been rapidly colonizing members across the globe.

Developers are obviously delighted because they can leverage their code across multiple social network “containers.” Users will far more utility as popular applications spread beyond Facebook, and more developers get into the game.

Facebook’s has some immediate challenges. From a press perspective, the company has not been very transparent regarding its thinking on OpenSocial.

Facebook’s official statement as of yesterday was:

Despite reports, Facebook has still not been briefed on OpenSocial. When we have had a chance to understand the technology, then Facebook will evaluate participation relative to the benefits to its 50 million users and 100,000 platform developers.

In fact, Facebook has been very much aware of OpenSocial within the last week and talking with Google’s OpenSocial team. Facebook team members attend last night’s Campfire 1, where OpenSocial was formally rolled out, but weren’t ready to talk to the press, somewhat like deer caught in the headlights.
In contrast, MySpace, which was going down a similar path to Facebook with its own APIs and markup language, found out about OpenSocial about 36 hours before it was launched, saw the light and created some compelling demos with Flixster. MySpace’s uphill battle to compete with Facebook for the most valued users just got much easier.

All of this is a clear sign the Facebook is carefully weighing its options, and unsure as to how to deal with the shifting landscape. This dilemma comes just after Facebook was celebrated for its $15 billion valuation and Microsoft alliance, a validation for 23-year-old CEO Mark Zuckerberg’s and Facebook’s crown as the new prince of Silicon Valley.

Facebook could continue to plow ahead with its own APIs and markup language, maintaining its walled garden approach.

Analytics firm Compete points out that Facebook attracts a different set of entrenched, core users than MySpace and other competitors. “It will be difficult for this group to leave, and questionable as to whether they would even want to,” said Compete’s Max Freiert.

Facebook members have strong loyalty to the service–50 pages per day per person on average, according to the company. That is a position of strength. Facebook has built a service that people are flocking to by the millions per month, growing users at more than 3 percent per week.

But a downside is that its competitors and developers will paint Facebook as a pariah hiding behind a walled garden.

This could impact how members of the community think about their social networking home base. The scenario would not be much different from a political campaign–one unintended, ill-timed scream and Facebook’s members could lose faith and move their support to another service, which have been newly empowered by the OpenSocial APIs.

It’s a tough choice for the young company. Funding is not an issue, but pride and doing the right thing for users are. Zuckerberg has said that not providing users with more control over their data on Facebook is a flaw in the service. That would indicate that more openness is good for users, and developers.

Bottom line, if the OpenSocial APIs give Facebook and its application developers what is needed to build great applications, then it seems like a no-brainer to grit their teeth, revamp the platform as needed and embrace the more open APIs.

This choice doesn’t mean that Facebook will end up with lowest common denominator or just me-too applications. The likely scenario is that social networks (the containers for applications) will develop extensions that leverage unique aspects of their platforms and provide some differentiation.

If Facebook has a significant competitive edge because of its pioneering development platform, then adopting OpenSocial makes less sense. And on a practical front, giving Google de facto control of the core APIs for user profiles, friends and activity streams will be a cause for discomfort. On the other hand, so far Google is taking input from partners (who are also competitors) as the API specs have evolved.

Anil Dash of Six Apart, a member of the OpenSocial fan club, sums up the bigger picture of what is going on:

It’s not true to say that Facebook is the new AOL, and it’s oversimplification to say that Facebook’s API is the new Blackbird, or the new Rainman. But Facebook is part of the web. Think of the web, of the Internet itself, as water. Proprietary platforms based on the web are ice cubes. They can, for a time, suspend themselves above the web at large. But over time, they only ever melt into the water. And maybe they make it better when they do.

For reference, Google and others have been chipping away at the proprietary Microsoft iceberg, but it is melting very slowly into the water and continues to mint money for itself and its ecosystem of developers.

Source:


Take That, Facebook!

November 2, 2007

By Wendy Tanaka

Google got back at Facebook on Thursday, announcing that MySpace has joined the growing ranks of social networks that have committed to use its new platform for developers of applications for the sites.

The addition of the News Corp. social network heaps pressure on Facebook–which recently chose Microsoft over Google to be an equity holder in the company–to sign on to the new set of standards, dubbed OpenSocial. With MySpace, developers gain instant access to the world’s largest social network with 115 million users. Facebook, which rolled out its own developer platform last spring, has 51 million users, less than half of MySpace’s members.

At a press conference to announce the partnership, Google and MySpace executives declined to comment on whether Facebook will join OpenSocial. Vic Gundotra, vice president of engineering at Google, assured reporters gathered at the Internet giant’s Mountain View, Calif., headquarters that the company has reached out to every major social network. “We want to see it adopted by everyone,” he said. “We’re not announcing further partnerships now. We anticipate more momentum now.”

MySpace Chief Executive Chris DeWolfe is confident the new platform will “become the de facto standard” for application developers.

Google had been expected to officially announce the OpenSocial platform Thursday, but reports about it surfaced Wednesday.

OpenSocial will allow developers to build tiny applications that can be used across many social networks, boosting traffic and advertising on their sites. Google and MySpace said the main benefit of the platform to developers is that it standardizes how applications are created.

“Not rebuilding and rebuilding on different standards … will be great for developers and end users,” said DeWolfe, who took part in the press conference at Google’s Mountain View, Calif., headquarters. “One of the big trends on the Internet is that users want to consume content when they want it and how they want it.”

Google Chief Executive Eric Schmidt said Google and MySpace have been working together on the platform for more than a year. It had been rumored, however, that MySpace would launch its own developer platform.

Executives declined to comment on how all the companies that have said they will use the standards, which include Friendster, Hi5, LinkedIn and more than a dozen other social networks, will make money from the platform.

At the conference, Joe Kraus of Google’s JotSpot wiki product said applications embedded on MySpace Web pages, for example, will foster “more interaction on MySpace, which means more time spent on the site and more ad revenues.”

Questions about privacy were also raised. Joe Greenstein, chief executive of applications developer Flixster, another partner, said Google doesn’t have access to partners’ user data. “Google is spearheading the initiative, but Google doesn’t touch the data, doesn’t own it.”

Developers were expected to gather at the Googleplex on Thursday night to test their applications on Google’s Orkut social network.

Some of these developers might also be building applications for Facebook. But if Google’s platform is easy to use, these developers might be tempted to pour their hearts and energies into one platform more than another.

Mark Zuckerberg, are you paying attention?

Source:


Google Unveils Open Social Platform for Developers

November 1, 2007

By Michele Gershberg

Google Inc will offer Internet developers an open system to create applications across Web sites, a move that could challenge the features behind the explosive popularity of social network Facebook.

Google’s OpenSocial system gives developers standardized tools to build applications and embed them in many sites, eliminating the need for small startups or even one-person shops to customize their programs for each site.

It also has the potential to lure developers mostly allied with Facebook by allowing their applications to find a home on many other Web sites.

“This is about making the Web more social, how do you have your friends go along with you to any site on the Web?” said Joe Kraus, Google director of product management, in an interview.

Google said it had initially signed on about a dozen partners, including social network LinkedIn for business professionals, its own Orkut network and Friendster.

Developers who are testing the program include key companies behind Facebook applications, such as music recommendation service iLike and Slide, which created the “Top Friends” ranking application.

Industry blogs have speculated for nearly a month that Google aimed to unleash a major challenge to Facebook, whose decision to open its site to developers in May helped it grow to more than 48 million users.

Facebook, which secured an investment from Microsoft Corp. last week that values it at $15 billion, is due to announce its own new advertising strategy on Nov. 6.

Google had also been interested in a partnership with Facebook as it competes more closely with Microsoft for drawing Web audiences and advertisers.

Developers briefed on OpenSocial said it will help them seek the widest distribution possible for their applications, some of which are already used by millions of people on social networks.

“For months we’ve been approached by other Web sites that want us to build iLike widgets for them and we’ve been unable to build it for them,” said iLike Chief Executive Ali Partovi. “The benefit OpenSocial offers us is we can essentially … syndicate what we do to other social networks.”

Source:


OpenSocial: Developers speak out

November 1, 2007

by Dan Farber

With Google’s OpenSocial plans out of the bag, I checked out how some of the chosen few–Slide, NewsGator, Ning and salesforce.com–think about the new APIs and how they plan to apply them.

Slide is the leading Facebook developer, claiming 63 million applications (SuperPoke, Top Friends, Slideshows, Guestbooks, SkinFlix and FunPix) installed. “So far we have ported several of our most popular applications from Facebook and MySpace,” Max Levchin, founder and CEO of Slide told me. However, consumers won’t get to play with those applications until December or January.

“OpenSocial is great. The user benefit is a shorter cycle before they see cool new apps and ways to spend more time on social networks independent of the network they are on,” Levchin explained. “The most powerful implication is for developers. They’ll have less worry about in terms of complexity and back end integration.”

On the technical side, Levchin said the OpenSocial APIs are well designed, with sophisticated distributed computing happening in the browser, serving applications from multiple sources, such as services passing through Google and Slide in a hi5-hosted container. “In essence, it’s pretty impressive,” Levchin said.

While Facebook is the only container for its applications, the Google approach is more open and generic. Will Facebook adopt OpenSocial APIs?

“I cannot predict what Facebook will do,” Levchin said. “They are in an enviable position. Facebook pioneered this and is the cause of a lot of application development. For a long time MySpace, through luck and serendipity, decided that embedding Flash widgets is ok. Facebook looked at that and said it’s great and entertaining but it doesn’t leverage the fact that there is more than one user, and exposed the social graph, an improvement over pure embedding of APIs.”

“Slide is a large developer. We can afford to do both [Facebook and OpenSocial apps] and we owe a lot of our success to Facebook. In general, our mission and stance is that as long as platforms are growing and vibrant and users are coming back and interested, we will put effort into it, independent of the standards they chose.”

Of course, the 15th ranking social network is not going get that treatment and smaller developer don’t have the resources, so using OpenSocial is the way to go for them, he said.

Levchin predicted that the OpenSocial APIs will provide a core set of functions, but that each social network will have extensions that expose unique features of their platforms. “Not every social network has the notion of different levels of friending and newsfeeds,” he said.

Will OpenSocial applications find the viral growth that characterizes many Facebook applications? “One litmus test is the standard Facebook set for how fast things grow–just add water and you have 100,000 users in a few weeks,” Levchin said. “How well this plays out remains to be seen. It will be a frenzy initially and then the platforms will fine tune the controls so as not to piss off users….that’s what could cause the APIs to change.”

For Levchin, the standards are less of an issue than monetization schemes. “Developers are not going to abandon Facebook. The not-so-subtle competition will come among platforms offering monetization for developers,” he said. “Whoever has the user base will attract developers.

Over time, the social networking space will resemble the operating system battles of past decades, with just a few large players vying for developers.

NewsGator created Didjahear!?, a social content application using OpenSocial APIs that grabs a selection of video, audio and graphic material from among 7 million stories that go through its back end feed processor. It is hosted in an Orkut container, which gets recommended content filtered by category and then can push it out to friends, who can add and share comments.

Brian Kellner, vice president of product management at NewsGator, compared the Facebook and OpenSocial development platforms. “It’s pretty hard to do Facebook development, and it’s intertwined with their platfrom. You have to use the markup language and services. For example, Facebook recently changed the invites works, so you have to change your application.”

“Google’s OpenSocial is more flexible and lighter weight, with HTML and Javascript in the container,” Kellner added. “At the moment, the Google APIs have less data–it will be trickier to get viral growth since there is no prompt to push an application to other friends because it doesn’t know who your friends are who don’t have it.”

Kellner said the APIs could become more functional if the demand exists. “OpenSocial will be able to answer other questions, such as what kind of activities have been done on a platform or it may know about calendar events and be able to pass on that intelligence,” he said.

In a blog post, Ning co-founder and Chairman Marc Andreessen said that Ning will aggressively support Open Social APIs in the following ways:

Being an outstanding container. Open Social apps will be able to run easily and reliably inside Ning social networks — all 113,000+ of them. Ning Network Creators will be able to quickly and easily add Open Social apps to their networks, and Ning users will be able to quickly and easily add Open Social apps to their profile pages.

Being an app publisher. Ning already automatically produces Facebook apps for every Ning network — specifically, video, photo, and music players — using the Facebook proprietary platform approach. We will do the exact same thing for Open Social — we will automatically produce Open Social apps for every Ning network.

At the launch event tomorrow, Salesforce.com will demo its use of the OpenSocial APIs in the “business” Web. The company is using a combination of its VisualForce and Apex code to create the container that allows OpenSocial widgets to run on the platform.

“If you are on Orkut and you see a great [SocialOpen] widget that shows who are your closest friends, we could use the same widget and drop it on an opportunity page [on salesforce.com] and see the same presentation but instead of friends it would be people most active on this sales deal,” said Adam Gross, vice president of developer marketing at salesforce.com. “The data is coming from salesforce, or whoever provides the container.”

“A developer can define what a friend means–you could say who are all the friends related to this opportunity. The sales rep could see the opportunity and the strength of relationships among the influencers associated with the given opportunity,” he added.

Dave Winer, who pioneered technologies such as RSS and SOAP, offered his perspective in a recent post.

Standards devised by one tech company whose main purpose is to undermine another tech company, usually don’t work.

In this case it’s Google trying to undermine Facebook.

And I don’t think it’s going to work.

What would be exciting and uplifting, a real game-changer — Internet companies giving users full control of their data.

When Google makes their announcement on Thursday, the question they should be asked by everyone is — How much of my data are you letting me control today? That’s pretty much all that matters to anyone, imho

In some ways Google is undermining Facebook by introducing open APIs that enables write once, play almost anywhere social network application development. It will unleash far more activity among developers and benefit users, but it’s not a zero sum game.

Facebook has tremendous momentum, as Levchin pointed out, and is creating ways to share the wealth with developers. Users haven’t abandoned Apple because it’s a closed box governed by Steve Jobs and Facebook users won’t run for Orkut, Plaxo or Ning unless they have a far more compelling proposition.

OpenSocial won’t give users control of their data, but it’s a step in the right direction. And, given that Brad Fitzpatrick, who co-authored the seminal “Thoughts on the Social Graph” now works at Google, there is a small ray of hope for liberation.

Update: LinkedIn will an OpenSocial mashup, Conference Calendar, which grabs the industry information from a LinkedIn profile, associates releveant conferences and lists people from other social networks who will attend.

Source:

See more from and from