Internet companies: Social graph-iti

November 2, 2007

A NEW fad is sweeping across Silicon Valley, causing excitement, confusion and hyperbole not seen since the dotcom bubble. It began in May, when Mark Zuckerberg, ten days after turning 23, took the stage in a San Francisco warehouse and announced that he was opening up Facebook, the social network he founded at Harvard University, to outside programmers. Anyone can now build little programs, or “widgets”, into the network. To illustrate his idea, Mr Zuckerberg projected onto the wall behind him a “social graph”—a pattern of nodes representing Facebook users and the links among them.

Since then Facebook and the idea of the social graph have become the favourite, if not the only, topic of conversation among the valley’s geeks, venture capitalists and internet moguls. Mr Zuckerberg compares his graphing of human connections to the work of Renaissance mapmakers. Facebook is growing furiously and may catch up with MySpace, the biggest social network. Outside programmers have added about 5,000 widgets.

One of Facebook’s investors estimates the social network’s revenues in 2007 at only $100m, mostly from selling ad space, with tiny profits. Nevertheless, the internet’s giants—Yahoo!, Microsoft and Google—are offering to buy Facebook or a stake in it for a price that would value the firm at many billions. At a Facebook conference on “Graphing social patterns,” panellists said the firm may be worth $100 billion and that it is the new Google.

How much of this is hype? Facebook has made two genuine breakthroughs. The first was its decision to let outsiders write programs and keep all the advertising revenues these might earn. This has led to all kinds of widgets, from the useful (comparing Facebookers’ music and film tastes, say) to the inane (biting each other to become virtual zombies). The entire internet industry reckons this was clever and is planning to copy it. This week MySpace said it would open its site to outside programmers. Google, which owns Orkut, a social network extremely popular in Brazil and parts of Asia, is expected to do the same soon. Facebook’s second masterstroke is its “mini-feed”, an event stream on user pages that keeps users abreast of what their friends are doing—uploading photos, adding a widget and so on. For many users, this is addictive and is the main reason they log on so often. Jerry Michalski, a consultant, calls the mini-feed a “data exhaust” that gives Facebook users “better peripheral vision” into the lives of people they know only casually. This mini-feed is so far the clearest example of using the social graph in a concrete way.

Silicon Valley’s craze for the “social graph”, however, is overdone. The term has been around in computer science for decades, says Eric Schmidt, Google’s chief executive, so it is puzzling that Mr Zuckerberg should get any special credit for using it. “We have address books, and the sum of the address books is the social graph,” he says. Companies such as Plaxo, which help to synchronise address books, and Google itself, which has a primitive address book in its web-mail service, plan to turn these books into fully fledged social graphs that can do useful and productive things, perhaps including new variants of mini-feeds.

This analogy to address books points to an important limitation for social networks, such as Facebook, compared with older sorts of network, such as the postal or telephone systems. These benefit from Metcalfe’s Law, which says that the value of a network is proportional to the square of the number of its users. In other words, the more people have phones, the more useful they become. This “network effect” leads to rapid adoption and puts up barriers for new entrants.

But unlike other networks, social networks lose value once they go beyond a certain size. “The value of a social network is defined not only by who’s on it, but by who’s excluded,” says Paul Saffo, a Silicon Valley forecaster. Despite their name, therefore, they do not benefit from the network effect. Already, social networks such as “aSmallWorld”, an exclusive site for the rich and famous, are proliferating. Such networks recognise that people want to hobnob with a chosen few, not to be spammed by random friend-requests.

 
 

This suggests that the future of social networking will not be one big social graph but instead myriad small communities on the internet to replicate the millions that exist offline. No single company, therefore, can capture the social graph. Ning, a fast-growing company with offices directly across the street from Facebook in Palo Alto, is built around this idea. It lets users build their own social networks for each circle of friends.

So are Facebook and its graph really worth many billions? From an advertiser’s point of view, says Rishad Tobaccowala, the boss of Denuo, the new-media unit of Publicis Groupe, an advertising company, Facebook is so far anything but the new Google. The search giant does have traditional network effects in its advertising system, he says: it aggregates advertisers and sends them to potential customers who have expressed specific intentions by typing search queries. But Facebook has only “large crowds who are communicating without expressing specific interests”, says Mr Tobaccowala. On Google, advertisements are valued; on Facebook they are an annoyance that users ignore.

Facebook might nonetheless be suited for other sorts of marketing. Reuben Steiger, the founder of Millions of Us, a marketing agency for social networks and virtual worlds, says that brands need to design “experiences” that use the social graph to engage groups of friends. If a wrestling association, say, wants to drum up ticket sales for an upcoming bout, it could build a widget that turns users into wrestlers and lets them fight bad guys and win gifts, while making them aware of the brand and the match.

But that possibility hardly justifies the sorts of valuations bandied around for Facebook and other social networks. Such valuations, indeed, may reflect a misunderstanding of the social graph. For bigger companies such as Google, the graph is simply the web of links among its many users. It can be used to make existing services more useful. But Google increasingly views such utilities as “features, not products,” says Sergey Brin, its co-founder. Facebook, like many hot start-ups in Silicon Valley, has some fantastic features, but maybe not much more.

Source:Economist.com


Will Google’s OpenSocial API Program Kill Ning?

November 2, 2007

By Stephen Wellman,

Google this week stormed into the social networking world and stole Facebook’s thunder with its new OpenSocial API program, an effort to create an open standard for creating and integrating applications into social networking platforms. While the rest of the blogosphere is pondering Facebook’s fate, I want to ask another question: Does OpenSocial spell the death of Ning?

For those of you who don’t know, Ning is startup that offers a platform designed to let users create and manage their own social networks. Ning has been around since 2004 and it has a list of big Silicon Valley boosters and investors, including Marc Andreessen of Netscape fame.

Ning is targeted at both consumers and businesses.Ning is trumpeting the OpenSocial platform and its participation in it. Ning’s leadership thinks that OpenSocial will allow Ning to explode (in a good way).

I am not as convinced that OpenSocial will be so good for Ning — or other social networking upstarts either. But for the sake of this post, I will focus on Ning.

Ning’s real value prop to date has been its ability to let users build fully custom, white-label social networks. While competitors like Facebook are aggregations of social networks (not just one social network), Ning’s advantage has been its ability to offer more user customization. Lots of different networks using the same platform behind the scenes vs. bunches of networks on the same interface.

Now, with the addition of Google’s OpenSocial APIs, Ning will offer the same kind of functionality as the rest of its rivals, including Facebook’s arch-nemesis MySpace. So if the entire social networking universe will soon offer integrated application functionality using the same standard (assuming Facebook signs on, which I think it will) what does Ning bring to the party?

Hear me out on this. I see how OpenSocial benefits MySpace. And I can see how Facebook might benefit from this too, despite all the naysayers who claim this move could kill Facebook. But, how does Ning really benefit from this?

As I see it, OpenSocial potentially gives Facebook and MySpace the ability to beat Ning at its own game. Assuming Facebook and MySpace integrate OpenSocial and these APIs give users the ability to create and integrate new kinds of applications and functionalities, why not give users the ability to create their own standalone networks in these respective platforms? Why not launch custom networks on both of these platforms and skip Ning all together?

As I see it, all Facebook, MySpace, Orkut, etc. have to do is add an additional level of interface customization and they can easily take Ning’s market right out from under it. Why use Ning when you could build a professional network for a large company on Facebook or a custom network for a movie or TV show on MySpace?

What do you think? Will OpenSocial spell the end of Ning?

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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.

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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?

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Significant workplace inroads for Enterprise 2.0?

November 1, 2007

By Dion Hinchcliffe

According to a random poll I recently conducted on Facebook, just over a quarter of 300 respondents — 27% of them in all — answered in the affirmative that they are provided with an easy way at work to post on a blog or put information on a wiki. I often ask this same question to gatherings of people whenever I get the chance these days and have been getting roughly the same answer for the last few months. Businesses are apparently starting to take Web 2.0 for a more serious spin.

A year ago, accessibility to blogs and wikis in the workplace was less than half this number in my informal sampling. The growth trend seems clear and appears to be increasing. So while this data might be fairly unscientific, I suspect the number is pretty accurate, and social media, aka Enterprise 2.0, is finally making some measurable inroads in the workplace despite a few open concerns about these mediums.

Facebook as a measure of social media in the general workplace?

Of course, Facebook users in general are probably more digitally literate than the average population, will look for blogs and wikis on the local Intranet to use, and thus some say they may be more likely to gravitate to workplaces and jobs that would provide an environment with familiar tools. However, one odd breakdown in the demographics of the poll is that the youngest group, 18-24 year-olds, reported the least access to social media. Perhaps it’s because this group also includes a great deal of students or that entry level workers don’t have as much computer access as workers farther up in the hierarchy.

Poll respondents were also pretty sure when they weren’t being provided with these tools with only 21% reporting that they didn’t know if they were being offered them. A whopping 52%, just over half, said that they had no social media tools offered to them in a way they could access.

The poll question was also carefully posed to uncover if tools were being “brought in the back door” by workers using the hundreds of free social media platforms out in the Web with their browser at work, or if the workplace itself was providing enterprise blogs and wikis. In my opinion, this makes the 27% “yes” number almost surprisingly high. But, while some respondents may not have parsed the question clearly, the trend is strong enough to stand on it’s own:

Blogs and wikis may finally be seeing fairly widespread “business approved” adoption in the workplace.

Getting good business outcomes from social media while managing downside

While blogs and wikis continue to show the potential to greatly improve collaboration, create higher levels of knowledge retention, and generate more reusable business information over time, it’s also probable that in attempts to access the benefits of Enterprise 2.0 platforms, these new platforms will incur some issues that IT departments and the business will have to deal with, particularly if these platforms are exposed outside the organization.

What are the business benefits and issues of social media? The diagram above depicts the world of traditional software and native PC applications with expanding access to the “2.0″ generation of new software models and platforms. Here’s a more detailed run down of the pros and cons that will have to be balanced in most organizations when deciding on providing access to these types of social media tools to their workers.

Notes: Social media is just one important aspect of Enterprise 2.0, but the one most likely to see near-term, widespread adoption. Also, the diagram above clearly shows the social media is a new aspect to the enterprise and will more likely to enhance existing IT systems over time rather than replace them outrighte with the possible exception of enterprise content management.

Reported social media in the workplace benefits:

  • More ad hoc collaboration between employees who can find each other’s work and team together.
  • More globally persistent, discoverable business information is made available over time.
  • Social media tends to capture more institutional knowledge that’s reusable.
  • A deep hyperlink infrastructure begins to form, built by continuously by workers using social media. tools to forge links, making business information more discoverable.
  • Tagging and other emergent organization methods allow business information to be organized and cross-referenced from every point of view.
  • More efficient access to information as more business information becomes available internally and externally via syndication.
  • Potentially higher levels of innovation and productivity as more previously unavailable enterprise thinking is available to be accessed, repurposed, and built on top of.
  • Increased efficiency in conversations: social media scales up to mostly resource and time friendly conversations among thousands of asynchronous participants, yet excludes those uninterested in them, unlike e-mail distribution lists and conference calls.

Reported social media in the workplace issues:

  • Productivity: Users employing social media tools for non-productive purposes such as socializing.
  • Security: Information that should be under tight control appearing on publicly via social media, either accidentally or intentionally.
  • Control: The level of control over what appears on an organization’s Intranet will decrease with the rise in use of social media, for better or worse. Also note that unlike e-mail, control of social media can be more successfully retroactive.
  • Outcomes: Ensuring that social media tools are generated pre-defined, specific goals is difficult when the the extremely freeform platforms of social media can be used for everything from managing projects to tracking a department’s fantasy football game.
  • Another silo: Right now social media is primarily a consumer-side invention, like many aspects of Web 2.0. Consequently, most enterprise blogs and wikis don’t have good access to feeds of enterprise data and this can encourage cut-and-paste publishing of information from traditional enterprise IT systems into social media, creating another silo of data.
  • Trust: How can the usefulness of the content in social media platforms be trusted. The Web has partially solved this with techniques such as inbound link counting, but reputation and voting systems are starting to appear, often as plug-ins such as the highly capable new comment and reputation add-on release from Intense Debate, for social media tools. Despite this, until the tools become mature, trust will likely continue to be an issue for many uses of social media in the workplace.
  • Not-enterprise ready. I’ve talked plenty about the enterprise context for blogs and wikis last year. The good news, many of these issues are starting to be addressed in the latest crop of Enterprise 2.0/social media offerings.

I’ll continue to run this poll on a periodic basis going forward and see what we can learn about the adoption of social media in the workplace. In the meantime, please share your stories about blogs and wikis at work in Talkbalk below.

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.”

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