One of my main areas of interest is social networking on the web. The term “social networking” can mean many different things to many different people. What I’m talking about are sites that specialize in connecting people and forming communities. Usually, these sites seek to move your relationships in the real world online where, supposedly, you’ll be able to leverage “indirect” relationships you never knew you had and also create new ones. Some of these sites focus strictly on the networking itself while others serve it as an add-on to other applications like games.
What is fascinating to me about this subject is the variability of success rates (or lack there of) and word-of-mouth growth. The most famous one – MySpace is a great example. Almost everyone has heard of it or is on it. People that I know that barely use a computer check their AOL email and use MySpace to talk with their friends. MySpace has experienced explosive growth. I believe their active user base is well into the tens of millions if not more by now. MySpace basically lets you customize your own page with profile information (e.g. nickname, zip code), songs, backgrounds and pictures. It also helps you find and connect to your friends. So, why has MySpace experienced this growth when other companies haven’t? A few reasons come to mind. First off, MySpace focuses on the “teenager” or younger generation demographic. These are the people who really are online the most and drive what is “cool” these days. In essence, they made MySpace “cool”. So “cool” in fact that most older people rushed to signup for MySpace. I’ve even heard a few VCs have their own pages. 
Secondly, MySpace enables users to customize their home page and makes the process extremely simple. This was key for the millions of non-tech consumers. Lastly, a point often overlooked, what’s a better place to meet someone with dating in mind then on MySpace? There probably isn’t any. One big takeway for me personally from MySpace is the lack of technological innovation. They aren’t doing anything special at all – no propietary technology, no fancy user interface with AJAX and no web 2.0 jargon. I could be wrong, but I think the key for them has been innovating on their business model and consumer target. That’s what has made them successful.
Challenges
Social networking on the web is quite challenging for a number of reasons. First off, these networks are useful usually only if a large number of people signup, but people won’t signup unless other people already have. It’s a catch 22. For most of them, reaching that critical mass is necessary, but extremely difficult. Secondly, these networks are not self-sustaining and require significant manual effort. That means you need to signup, create a profile, find your friends / colleagues, send invites to those who aren’t members, request connections, etc. In my mind, this is a big problem especially if your core competency is just networking. If it’s something else like games, that’s fine I’ll play the game online and socialize within the community when I get around to it. For professional networking, face-time is still king and I’d be surprised if that ever goes away. Meetup.com has done a good job recognizing that and encouraging organic growth through offline groups.
A Few Players
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Future
Well, where do we go from here? No one really knows – even the so called “experts”. What I would like to see is community building around knowledge sharing and gathering – smart groups (wisdom of crowds stuff). Communities focused around industries (e.g. financial markets, technology, travel) where members are communicating with each other and sharing knowledge. Why would you pay 1 financial advisor when you could get feedback from 20,000 people with financial background probably for free?
From a technology standpoint, I can’t stand to see all of these companies creating centralized solutions. This is just not the future. People don’t want to create and maintain 10 different accounts. Why not build an open social network that is easily extendible and searchable? That would open the door to so many different applications and services. Empower users to generate their own content, provide them with distribution mechanisms and give them financial incentives to do so.
So much to talk about for the future of social networking I’m going to save the rest for another post.
