Social Networks

We hear the words “Social Network” a great deal these days. It's an Internet phenomenon that is bearing fruit, both by virtue of launching successful ideas and by providing much appreciated services to Internet users. It began with Craig's List, not long after the Internet itself became a phenomenon.

Craig Newmark set up a mailing list (and later a web site) to list the artistic venues and events in the San Francisco area. Anyone was allowed to post details, and the postings were moderated. Pretty soon people were posting advertisements for property to rent, small items they wanted to sell, lonely-hearts ads and so on. Craig's List became a global phenomenon with local pages to cover most major cities in the world, and the web site is a highly valuable property. But it was never intended by its founder to be anything other than a free service.

Craig's list currently employs just over 20 people who manage the web site, although the web site itself is vast. This small group of employees could never have assembled such a wealth of content. It is the customers who do all the work. Each individual customer doesn't do much, but, taken together, their efforts produce a remarkable resource. This is the principle behind social networks—to harness the power of the many. You can appreciate the idea simply by considering a number of “social networks” that have given rise to successful services (and in
some cases generated a handsome cash flow). Here's a list, many of which you will probably be familiar with. After all, most of these services have tens of millions of users:

• Wikipedia: arguably the best encyclopedia in the world, with just under 1.5 million user-contributed articles. It aggregates expertise.
  


• MySpace: self-publishing within your network of friends and colleagues. It's a grapevine. It aggregates opinion (what to listen to, what to watch, what's groovy) and is now the most popular web site in the United States.
  


• YouTube: The people's television network, allows anyone to post their own video. Founded in February 2005 by three young men (the oldest graduated high school in 1995), it is being acquired by Google for a mere 1.65 billion dollars in stock.
  


• BitTorrent, Skype and other P2P plays: All of these share your computer power with everyone else in order to deliver their service. Beyond that they aggregate content for sharing or in Skype's case, nothing more than a VoIP telephone directory (with the users doing the input).
  


• eBay: This is not normally thought of as having a social network element, but it does. It creates markets where markets didn't previously exist. Few people would have thought, for example, that there was a market for first edition AOL CDs. But there is, by virtue of eBay. (It is estimated that about 1 million people worldwide make a living from eBay, some in very ingenious ways).
  


• Del.icio.us, Stumbleupon, Digg: These three services are similar but not identical. They aggregate opinion. All provide interesting and usually high quality web links (which users voted for). Del.icio.us and Digg are real-time services. Del.icio.us is like a real-time record of who is interested in what right now, but it is also a high quality search capability that complements Google nicely. Google is blunderbuss search for when you are looking for something precise. It has depth but minimal quality. Del.icio.us is quality only. Digg is a little like a Reuters feed for interesting news. Stumbleupon is a resource that directs you to delightful or interesting web pages.
  


• SecondLife: a 3-D virtual world that is so popular it makes money by selling virtual real-estate for hard cash. Several major companies have set up shop in SecondLife and Reuters has opened a news bureau there.
  


• Freecycle.org: This is a goods recycling service that enable people to give away possessions that they no longer want and need. It simply allows people to post either what they have or what they need to an email feed. If you see something you want, you make contact and arrange to collect it. If you see something that someone needs and you can give away, you contact them. There are two prime rules. The receiver arranges transport and anyone who tries to sell anything they've collected through Freecycle will be banned from the network.
  


• World of Warcraft: This is a hugely popular Internet-based multi-player game with more than a million players. It is the most successful of several virtual worlds that the Internet has spawned. However it is also a very powerful (and commercially successful) social network.

This is by no means an exhaustive list, but notice how varied it is. Publishing, entertainment, education, information services, non-profit activity, unashamed commerce; just about any kind of web site can leverage a social network. The basic idea isn't complicated. Individuals are enabled to make specific contributions, the contributions are moderated (often by other contributors) and aggregated and something valuable emerges. The individuals involved may not even think that they are making any effort. Just a few clicks with a mouse, and maybe inputting a few details could be all that is required.

The investment required to leverage or create a social network can be very low even for an organization with few resources—and the value produced can be very high. All organizations that are pursuing web-based business need to consider whether there is opportunity for them here.

Robin Bloor, Partner, Hurwitz & Associates