This blog post originally appeared in serialized form here on TechCrunch. This version is the shorter, ADHD version. If you came here via a direct link you might want to check out the more detailed full version on my blog, which is here.
What I want to answer with this post (long though it may be) is:
- Why did Web 2.0 emerge and are there any lessons to be gained about the future? [cheap accessible digital hardware]
- Why did Twitter emerge despite Facebook’s dominance? [asymmetry, real-time, curated RSS / link-sharing]
- Why did MySpace lose to Facebook & what can Twitter learn from this? [encouraging an open platform where 3rd parties can make lots of money]
- Does Facebook have a permanent dominance of the future given their 500m users? [chuckle. ask Microsoft, Aol/Time Warner, and Google]
- What are the big trends that will drive the next phase of social networks? [mobile, locations, layering of services, data management, portability & more]
The Past (1985-2002)
We have been using social networks for 25+ years. Back then were were looking for the same things users look for today – the “6 C’s of Social Networking” – Communications, connectedness, common experiences, content, commerce & cool experiences. There were chat rooms, discussion groups, dating, classified ads – all the same stuff.
The Bridge Between Online Services & The Internet
Then came AOL. It preceded the WWW but then become the onramp to the Internet for newbies. While you dialed AOL to get on the Internet, the goal of AOL was to keep you locked into their proprietary content and thus earned the classification of “walled garden.” They had a proprietary browser, their own search engine, their own content, chat rooms, email system, etc.
Brands didn’t advertise their web pages they advertised “AOL Keywords.” If you were a newly minted, venture-backed consumer Internet company you had to have a deal with AOL to reach your customers. When Time Warner & AOL merged it was widely feared that this would be a monopoly that would control the Internet.
Social Networking in Web 1.0
By the mid-nineties we had the World Wide Web, which gave us a standard way to publish web pages using HTML. Smart people understood that people still wanted to accomplish on the world wide web all of things that we did in the pre-Internet world. Companies like GeoCities & Tripod built tools that let you publish web pages that could be discoverable by others.
Yahoo! rose to prominence by offering a free, ad-supported alternative to all of the crap your mum got on AOL for a fee. Yahoo! Groups in particular became the standard for clubs across the company to communicate to their churches, mothers’ clubs & schools and to some extent still is today.
Social Networking in Web 2.0
Next began the era of “spam-based” networks of which Plaxo (founded in 2002) was the king. It encouraged groups of people to email everybody in their email address books and “connect” on Plaxo so that when any of their contact information was changed online it could by synchronised with everybody’s local computer version and thus we could all stay in touch.
LinkedIn formed us into networks of networkers. It was suddenly now not only about whom I was connected to, but who they knew and how I could get access to them. We all wanted intros. It added a new dimension to online social networks … business networking.
Web 2.0 consumer companies were enhanced because they coincided with hardware that allowed us to capture more content instantly – namely images and video. Suddenly we were all creating blogs on Blogger.com, Typepad & WordPress.
But the masses didn’t want to blog. They wanted to publish pictures of themselves & their friends, share them, communicate with others, stay connected, have common experiences, find people to date, etc.
Modern Social Networking
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 “business” and with a little more interactivity. MySpace grew faster because Friendster’s servers couldn’t scale.
MySpace didn’t handle images or video well. So users put all their photos on Photobucket & their videos on YouTube and shared them with their friends through MySpace. Fox bought MySpace for $580 million. For a nanosecond Rupert Murdoch seemed like the smartest guy on the Internet. Google acquired YouTube for $1.65 billion.
MySpace later bought Photobucket for $250 million. Murdoch seethed at these “startups” getting rich off the back of MySpace. MySpace vowed not to create anymore big successes off of their backs that Google could then acquire.
Facebook had grown stratospherically from 2004-2007 to 100 million users and was everything that MySpace wasn’t. It was: up-market, exclusive, urban, elite, aesthetically pleasing, ad-free and users were verified. MySpace was: scantily dressed, teenaged, middle-America, design chaos and on ad steroids.
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. It launched open API’s and created a platform whereby third-party developers could come build any app they wanted and Facebook didn’t even want (yet) to take any money from them to do so.
Photo: Michael Arrington
It was at that moment that a 22-year-old Mark Zuckerberg completely schooled the 75-year-old Rupert Murdoch. Within the next 12 months Facebook users doubled to 200 million while MySpace stayed flat at 100 million. The lesson was learned over 30 years in Silicon Valley: you create ecosystems where third-parties can innovate and thrive and you become the legitimate centre of it all and can tax the system later. Ask Microsoft, Autodesk or Salesforce.com – the evidence was there from Seattle to Sand Hill Road.
Social Networking goes Real Time
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.
Another Twitter’s innovation was “asymmetry” because you didn’t have to have a two-way following relationship to be connected. You could follow people who didn’t necessarily follow you back. Twitter restricts each post to 140 characters so users often share links with other people – one of the most important features of Twitter.
But what is magic about Twitter is that it is real time. In most instances news is now breaking on Twitter and then being picked up by news organisations.
The one major thing that Twitter doesn’t seem to 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. Twitter seems to have become a bit allergic to third-party developers (or maybe vice-versa).
Lesson learned (to me at least) – let people get stinking rich off your platform and tax ’em later. That way other companies innovate on their own shekels (or at least a VCs) and let the best man win. Close shop to try and control monetization and you can only rely on your own internal innovation machine & capital.
Social Networking is Becoming Mobile
The most obvious change is that now social networks become mobile & “location aware.” The highest profile brand in this space is FourSquare.
It’s 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.
The Future: Where is Social Networking Headed Next?
1. The Social Graph Will Become Portable
Right now our social graph (whom we are connected to and their key information like email addresses) is mostly held captive by Facebook. There is growing pressure on Facebook to make this portable and they have made some progress on this front.
2. We Will Form Around “True” Social Networks
Facebook lumps us into one big social network. Nobody exists in one social network. I have the one with my friends where I want to talk about how wasted we were at the party last weekend that I don’t want to share with my family network where I share pictures of the kids with my parents and siblings.
To get around all of this jumbling of social graphs young people simply create multiple Facebook accounts under pseudonyms for their real discussions and more pristine Facebook accounts for their real names.
We will seeing the growth of social networks around topics of interest like StockTwits for people interested in investing in the stock market. There are new networks forming to try and address the needs of specific social networks such as Namesake that is in its experimental stage but sees a world in which people want to network outside of Facebook.
3. Privacy Issues Will Continue to Cause Problems
Facebook made a deal with us that our social network was private. When they jealously watched the rise of Twitter they decided that it should be made more public, but that wasn’t the bargain we made when we signed up in the first place.
What I realised in working with so many startup technology firms is that even if you don’t give permission to third-party apps to access your information much of it is available anyways as long as somebody you’re connected to is more promiscuous with third-party apps. Also, all of those “Facebook Connect” buttons on websites are awesome for quickly logging in, but each gives those websites unprecedented access to your personal information.
4. Social Networking Will Become Pervasive
As our social graph becomes more portable I believe that social networking will become a feature in everything we do. You can already see it slipping into services like Pandora where my social graph instantly appears and my friends’ musical tastes are displayed without my knowing this would happen. On NY Times I’m getting recommended articles by friends and I didn’t explicitly turn this feature on. This trend of social pervasiveness will continue.
5. Third-Party Tools Will Embed Social Features in Websites
One thing that is obvious to me is that while many websites want to have Facebook Connect log-ins to know more about you, they don’t really know what to do with you once they have that information. They’re mostly now thinking about serving demographically targeted ads to you, but that’s not very interesting. Third-party software companies will start to offer features to websites to actually drive social features. This will take a few years but players such as Meebo are already innovating in this category though their toolbar.
6. Social Networking Will Split Into Layers
One of the most interesting trends in the last few years has been watching the Internet split into layers. At the bottom end of the stack is storage (S3) and processing (EC2). At the top end is the business logic created by startups and established technology companies. We know that the layering of the PC era led to huge innovation at each layer in the stack and I expect the same to continue to emerge on the Internet.
One interesting layer is the “mapping layer” that is emerging in mobile social networks. If every startup had to figure out the locations of every business, what type of business they were and where they were located on a map we’d have very few startups. There will be other layers including place information and open-source data.
7. Social Chaos Will Create New Business Opportunities
We know that Twitter is leading to customer service opportunities for businesses but the opposite is also true. If you don’t manage what is said about you in social networks it could be detrimental. So tools in the areas of social CRM, social customer support & real-time data management will emerge.
8. Data Will Reign Supreme:
One thing has become clear in the era of “participation” is that as more people create content the more important the ability to sift through data, organise it, share it, analyse it and present meta-data / trends will become. If you look at the power of Bit.ly it’s not because you can create short links but because of the analytics that bit.ly provides you.
Once we’re uber connected and getting information online from people we’ve only met online we need to know more about the “authority” of the people we’re following. Enter Klout, a service that tracks the influence of individuals in social networks.
9. Facebook Will Not be the Only Dominant Player
I know that in 2010 it seems ridiculous to say anything other than “Facebook has won – the war is over.” In a complete return to where we all began with AOL – the world is “closed” again as Facebook has become this generation’s walled garden.
Well, here’s a quick history primer that may change your mind:
1. In 1998 the Department of Justice launched an anti-trust case against Microsoft. People feared they were going to have a monopoly over the Internet due to “bundling” Internet Explorer with their operating system.
2. In April of 2000 there were fears that the AOL / Time Warner merger would create a monopoly on the Internet. As you know, Time Warner eventually spun off AOL for peanuts.
3. In May 2007 there were fears that Google was becoming a monopoly. It controlled two-thirds of all Internet searches in the US and as we all knew – search was inevitably going to be the portal to finding information on the Internet. We now know that social networking is having a profound impact on how we discover and share content online.
4. So … November 2010 and Facebook has 500 million users. They have more page views than even Google. More than 10% of all time on the web is now Facebook. They have become a juggernaut in online advertising, pictures, video and online games. And now they want to revolutionise email. It is no doubt that the next decade belongs to Facebook. But the coincidence is that 10 years out will be 2020 and it’s when we look back from that date I’m certain that people will find a Facebook monopoly a bit laughable.
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