Social Networking Becoming more Invisible But More Ubiquitous?

The Economist notes that while social networking efforts haven’t found profitable financial models, there is evidence that they are migrating to more of a common model that is less proprietary and more in the background, like air.

“Historically, online media tend to start this way. The early services, such as CompuServe, Prodigy or AOL, began as ‘walled gardens’ before they opened up to become websites. The early e-mail services could send messages only within their own walls (rather as Facebook’s messaging does today). Instant-messaging, too, started closed, but is gradually opening up. In social networking, this evolution is just beginning. Parts of the industry are collaborating in a ‘data portability workgroup’ to let people move their friend lists and other information around the web. Others are pushing OpenID, a plan to create a single, federated sign-on system that people can use across many sites.

“The opening of social networks may now accelerate thanks to that older next big thing, web-mail. As a technology, mail has come to seem rather old-fashioned. But Google, Yahoo!, Microsoft and other firms are now discovering that they may already have the ideal infrastructure for social networking in the form of the address books, in-boxes and calendars of their users. ‘E-mail in the wider sense is the most important social network,’ says David Ascher, who manages Thunderbird, a cutting-edge open-source e-mail application, for the Mozilla Foundation, which also oversees the popular Firefox web browser.

“That is because the extended in-box contains invaluable and dynamically updated information about human connections. On Facebook, a social graph notoriously deteriorates after the initial thrill of finding old friends from school wears off. By contrast, an e-mail account has access to the entire address book and can infer information from the frequency and intensity of contact as it occurs. Joe gets e-mails from Jack and Jane, but opens only Jane’s; Joe has Jane in his calendar tomorrow, and is instant-messaging with her right now; Joe tagged Jack ‘work only’; in his address book. Perhaps Joe’s party photos should be visible to Jane, but not Jack.

“This kind of social intelligence can be applied across many services on the open web. Better yet, if there is no pressure to make a business out of it, it can remain intimate and discreet. Facebook has an economic incentive to publish ever more data about its users, says Mr Ascher, whereas Thunderbird, which is an open-source project, can let users minimize what they share. Social networking may end up being everywhere, and yet nowhere.”

socialcapital.wordpress.com

Yahoo Officially Rejects Microsoft Offer

As expected, Yahoo has officially rejected Microsoft’s $44.6 billion bid to acquire the company. In a brief press release issued this morning, Yahoo writes

“After careful evaluation, the Board believes that Microsoft’s proposal substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments. The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders.”

So, essentially Yahoo wants more money. But, let’s not forget that the public markets “substantially undervalued” Yahoo quite a bit more than Microsoft – shares were trading sub-$20 prior to the Microsoft bid (they are hovering around $29/share this morning).

As others have noted, this feels mostly like a negotiating tactic by Yahoo. They’ve bought more time to consider less likely alternatives such as a Google partnership or AOL merger, but in the end, it’s looking increasingly unlikely that there is another bidder that’s going to better Microsoft’s offer - other than Microsoft of course.

Social Networks Still Growing Strong

Stats to be released tomorrow by comScore show that traffic to most of the top social networking sites is continuing to increase in the US, although the amount of time users spend on such sites is leveling off. For example, while MySpace is showing 11.6% year-to-year growth in unique visitors and Facebook is up 78.6%, the amount of time the average user spends on each site is down 10.4% and up just 1.1%, respectively. Further, the average time spent on Bebo is off 63.6%, though the US is only a small part of that social network’s user base.

Looking closer at the engagement metrics, it’s notable that MySpace users still spend the most time on the site versus users of other social networks. In January, the average visitor spent 203.9 minutes on the site (a 13.7% month-to-month increase), while the average Facebook visitor was logged on for 172.1 minutes (a 1.6% month-to-month increase, but notably down from a high of 199.9 minutes per visitor in February ’07).

The decline in minutes per user on Facebook certainly adds more credence to the theory that interest in applications is starting to fall off. Meanwhile, a few Facebook-like additions such as a friend news feed and improved photo galleries seem to be keeping users on MySpace as the top social network prepares to launch its own developer platform to users next month.

A few other notable numbers from the report:

* YouTube unique visitors more than doubled in the past year, to 61.3 million visitors in January. Page views were up 277%.
* Flickr unique visitors were up 88.5% to nearly 14 million. Page views were up 266% year-over-year to 340 million in January.
* Yahoo 360 unique visitors plunged 53.4% to 2.2 million. Page views were down 54.6% to 52 million.
* Unique visitors to Facebook fell 2.3% from December. They are essentially flat since August (33.7 million, versus 33.8 million for January).

Clearly, YouTube is benefiting from being acquired by Google and integrated into search results, while Flickr is continuing to grow under the Yahoo umbrella. As for Yahoo 360, its demise probably doesn’t come as a huge surprise given Yahoo’s ever-shifting social networking strategy.

mashable.com

MySpace cranks up heat in Facebook turf war

By Jon Swartz, USA TODAY

MySpace popularized online social networks and has a membership the size of the population of Mexico. It commands a gluttonous chunk of advertising, has a multibillion-dollar parent in News Corp. and boasts dynamic leadership in co-founders Chris DeWolfe and Tom Anderson.

Yet MySpace will have the mind-set of a start-up the next several months, with an audacious menu of business partnerships, technology initiatives and expansion plans to gain the attention of consumers and advertisers.

It has little choice. Though the most popular social network, MySpace is in an escalating battle with upstart Facebook. As major retailers such as Coca-Cola and Blockbuster pump up advertising on social networks to reach millions of Americans creating personal Web pages, MySpace is trying to be heard above the din of Facebook — a rival less than half its size. MySpace co-founders DeWolfeand Anderson have a few tricks up their virtual sleeves as they try to reassert their company — often stereotyped as a site for kids — as a preeminent power.

The goal is to make MySpace the starting point for people on the Internet, where they can check in on the activities of friends, peruse e-mail, get the latest on news and weather, and post their favorite photos and videos. "We're offering one place where people are in control," DeWolfe coolly explains at an L.A. restaurant near MySpace's offices, cradling a cocktail.

MySpace is competing with Facebook not only for advertising market share but for mindshare: Facebook is benefitting from the type of buzz in Silicon Valley that MySpace received a few years ago.

"There is a class divide between the two," says tech blogger Robert Scoble. "MySpace is Hollywood. Facebook is Silicon Valley. The tech influencers go to Facebook, but the mainstream crowd is MySpace."

While some may scoff at such stereotypical comparisons, Facebook's growing popularity is a concern for MySpace, financial analysts say.

"Is Facebook to MySpace as Google was to Yahoo?" posits Spencer Wang, a financial analyst at Bear Stearns, alluding to the upstart search-engine service that upended an older competitor. Since Facebook made its network available to anyone in September 2006, its user base has grown sixfold, to 59 million. Wang expects that to reach 100 million by mid-2008.

"The Facebook factor is a huge concern," Wang says. "It could lead to a potential cannibalization of MySpace's user base, less time spent by users on MySpace, and increased investments by MySpace to fend off Facebook."

Facebook, which had no comment for this story, has a higher percentage of college-educated users, considered attractive to marketers. MySpace users are more likely to click on ads because they are less private than Facebook users, Scoble and financial analysts say.

At the Web 2.0 conference in San Francisco in October, News Corp. Chairman Rupert Murdoch acknowledged that MySpace may not reach its previous revenue forecast of $800 million for its 2008 fiscal year, ending in June.

Power to the people

Some may dismiss MySpace, with its unruly layouts and neon-glow graphics. But the masses — it has 110 million members — love it.

"MySpace is not a wild child," DeWolfe says, pointing out that 40% of the site's members are over 35 years old. "It is a company for everyday people who wish to express themselves in music and videos. Facebook is a utility."

No less an authority on mainstream tastes than News Corp. noticed that when it swooped in and plunked down $650 million to acquire MySpace in 2005.

Despite some initial skepticism at the time of the deal, it is now considered a "home run" by analyst Wang and others. Since the purchase, MySpace's monthly unique visitors have increased more than fivefold, and its daily page views have soared to 1.5 billion. Oh, and that $650 million acquisition? MySpace is estimated to now be worth $2.4 billion — nearly four times News Corp.'s initial investment.

What's more, MySpace's revenue has improved 10 times since the acquisition.

A big slice of that is ad revenue. This year, MySpace is expected to sell $525 million worth of advertising, about 58% of the social-networking industry's total, says researcher eMarketer. Facebook, by contrast, is expected to ring up a profit of about $30 million on revenue of $140 million this year, says Bear Stearns analyst Robert Peck.

Webisodes of original productions such as The Fit and Quarterlife, condensed versions of old TV shows such as Fantasy Island, viral videos and presidential candidate forums run on MySpaceTV, the company's video channel.

About half of MySpace's 800 employees work in a tony office with a panoramic rooftop view of the Hollywood Hills, Rodeo Drive and palm trees. A game room is anchored by two Guitar Hero stations and basketball hoops. Walls are festooned with commemorative posters of famous MySpace users such as music groups Franz Ferdinand and Jet.

Indeed, MySpace has burnished its enormous following through its show-biz connections. There are 6 million bands registered on the site.

Before MySpace, many bands sent demo tapes to radio stations and music writers to get the word out. Now, they can post songs to their MySpace page. "It changed everything for us," says Joel Madden, lead singer of Good Charlotte. The band has tested new material on its page for feedback and posts messages for fans. It's even scouted other MySpace pages to find opening acts.

Jesse Carmichael, keyboardist for Maroon 5, says the five-member group started a MySpace page to communicate more directly with fans. It now has more than 300,000 friends.

Music is just a fragment of MySpace's vast constituency, however.

As MySpace turns 4 years old in January, it has grand plans to extend its reach.

Next year, it plans to offer members the option of creating multiple profiles tailored to friends, family and business associates. A channel with Oberon Media, a maker of multiplayer games, is in the works for the first half of 2008. MySpace unveiled a service that lets MySpace members make free Internet phone calls through Skype. And it just unfurled Transmissions, a program that lets musicians showcase music on their pages and sell performance videos.

The Southern California company has taken steps to raise its profile and show off its high-tech chops. This month, it opened an office in San Francisco with about 50 people. It plans to expand to about 200 by mid-2009. DeWolfe vows to raise his profile in Silicon Valley, as he did at the recent Web 2.0 conference in San Francisco.

Wait. There's more. Next on the expansion agenda: offices in Russia, Brazil, Turkey, South Korea and Poland in 2008.

Meanwhile, MySpace's membership in OpenSocial — a Google-led consortium of about 75 social-networking sites that includes MySpace, LinkedIn and Friendster — should also buttress relations with makers of mini-software programs called widgets, some of whom feel MySpace has not been as supportive as Facebook, says David Gentzel, creator of Trakzor, an application used by 4 million MySpace users to track when their friends view their profiles.

The Facebook factor

What makes the horse race between MySpace and Facebook so interesting is the fluid nature of the market and its always-dynamic roster of players. Since 2003, there have been no less than three go-to networking sites: the since-faded Friendster, MySpace and — now — Facebook.

"Who knows? There could be a new hot company five years from now," says Konstantin Guericke, CEO of social-networking site Jaxtr and co-founder of business network LinkedIn.

Complicating matters, multiple sites can co-exist. Social-networking denizens have shown a predilection to use major sites in distinctly different ways.

Consider MySpace, Facebook and competitor LinkedIn: MySpace is treated as an uninhibited, open hangout for the young and creative at heart; Facebook is a more discreet destination for selected friends to schmooze and network; LinkedIn is for business dealings.

"I use all three for different reasons, but from a musical standpoint, MySpace has a hip music disposition," says rap legend MC Hammer. "Facebook is great, but it's for a more mature crowd."

Yet Facebook's mature — some might argue elitist — crowd is a highly influential one. "Facebook has won the hearts and minds of the techies," says Jennifer Simpson, an analyst at Yankee Group.

That became painfully clear to MySpace last month when — despite a new advertising plan and the new OpenSocial partnership with Google — it was lost in the vapor trails of Facebook, which also announced a new ad plan as well as an investment by Microsoft.

"We've always felt we were the original social network, but we haven't done as good a job establishing our place in the social ecosystem," DeWolfe says.

"Facebook has made inroads with the over-25, professional crowd," says Jason Feffer, a former MySpace executive who now is CEO of SodaHead, which makes opinion-poll widgets for Facebook and other social networks. "But MySpace is bigger, it has a lot more media relationships through Fox, and it has OpenSocial."

What's more, MySpace has a significant edge in the foreign market, where 80% of all Internet users reside. It has localized services in 23 countries. In other words, it has more on its mind than Facebook.

"We've been global for a year and a half," Anderson says. "There is more to what's going on than just the U.S. market. People focus on Facebook, but we have larger rivals in other countries."

2008: Year of the Mini Social Networks

MySpace, Facebook, and the other large social networks need not worry. The small, niche social network sites that are popping up faster than poker rooms in the 90’s are not going to hurt the big boy’s bottom lines. They’re just going to draw more people by the end of the year because of one fact.

They’re just more useful than the big sites.

The appeal that brought millions to form profiles and make friends on MySpace and Facebook will have the opposite effect in 2008 an beyond. We built our MySpace page and started Facebooking because everyone else was doing it. As closed social sites begin to gain in popularity, they will appeal to people because NOT everyone else is doing it. Inclusion is easy on today’s internet. Being part of something exclusive is becoming the new IT thing to do.

Ning and other emerging websites offer places for people to “give everyone the opportunity to create your own social networks for anything.” Here are some of the more popular emerging themes for these closed social niche networks:

Age-Based Social Networks

There are social networks popping up for everyone from 8-year-olds to 80-year-olds. Websites like Boomj (social network for baby boomer), Whyville (”a virtual world where boys and girls from all over the real world come to chat, play, learn, and have fun together”), and Eons (”loving life on the flipside of 50″) are making it possible for people in particular age groups to interact with each other.

The appeal here is obvious. Age gives people an instant point of reference where they know that, no matter what else is different, they have something in common. Exploring these websites reveals that the members seem to be more open, willing to reveal more about themselves than they would on general social networking websites.

Local Social Networks

Quick story: a friend was at a party the other day and really hit it off with a girl he met there. They talked, laughed, drank… all was going well. As the night drew to a close, he asked for her phone number. She hesitated, saying that she didn’t really give her phone number out to people that she just met. Then, she took a card out and wrote something down.

It was her MySpace page.

She said they could get to know each other better that way first. He was disappointed, but it was better than nothing.

Social networks like Tribe and GoingOn to localize their networks and give the audience places to find local focus. While MySpace and Facebook have similar interfaces, it’s impossible to separate yourself into the closed networks, as the bulk of friends and members will still be crossing over to other general areas.

Social networks with local membership and flare are becoming more and more prominent, especially with dating. Being social with people you can never meet based upon proximity is one thing. Having them available within your city is something completely different. Local social networks act as that buffer zone where people can interact and get to know each other without having to meet for drinks or talk on the phone. In 2008, there will be multiple large social networks in every major city. Expect to start hearing radio ads and even a few television spots pop up.

Professional Social Networks

The car business, which is notoriously a year or two behind the times when it comes to the internet, has a few social networks for car dealers popping up. The presence of Automotive Social Networks is either a sign of the end of the world or an example of how any, ANY, profession can find itself with a social network specific to its profession.

Getting advice, networking, sharing experiences — we are professionally based individuals who revolve around our jobs. Few are willing to admit it, but it’s true. Having a place with like-minded people makes it easier to cope sometimes. That’s the appeal to social networks by profession.

Interest Social Networks

Forums fade. They pop back up, then they fade again. Slowly, they will be integrated into social networks that offer more interaction beyond the forums themselves.

Gaming, for example, has dozens of emerging social networks. Gaming Social Networks like Great Games Experiments offer networks within the networks to allow gamers to become even more specific about their wins and conquests.

Why Now?

What makes 2008 the year that Niche Social Networks will emerge? The answer has 2 parts: Money and simplicity.

With the Facebook Beacon debacle and other outcries for less user data being used for marketing, it makes sense to target networks where the advertisers already know they’ve got the right audience. Hyper-targeted marketing will continue to emerge, but for now, closed social networks make it much less controversial.

The simplicity aspect is even more important. It is simple from every angle - simple for members to find the answers and networking they need, and simple for developers to make the sites and promote them with very little investment. Google’s Open Social and several other applications will make it very easy for these types of networks to get started and grow.

socialnewswatch.com

Community Networks versus Social Networks

Google (GOOG) has just bought Jaiku, a Finland-based mobile IM and presence company.
In the recent period many articles has touched upon sites like Jaiku, FaceBook, and LinkedIn etc and labeled them "social networks". But in my opinion they can't be classified as social network, but more as "free end-user driven virtual community networks" as real contact between members are rare.

Real social networks are a description of a "professional real life and closed company specific social networks" where real contacts between members are what the software displays and analyse on.

lars-kirstein.blogspot.com

Open Web Awards Announced Final Winners

The voting in the first ever Open Web Awards is over and Vizu has validated the results. The awards ceremony will be held at the Palace Hotel in San Francisco, California on Thursday, January 10th from 7:00 – 10:00 PM.

Here are the winners:

Mainstream and Large Social Networks - Netlog.com

Applications and Widgets - WidgetBucks

Social News - Digg.com

Social Search - Facebook.com

Sports and Fitness - Sportme.org

Photo Sharing - Vois.com

Video Sharing - Kaltura

Start Pages - Cafemom.com

Places and Events - MySpace

Music - Pandora.com

Social Shopping - Zlio.com

Mobile - Google Maps for Mobile

Niche and Miscellaneous Social Networks - Cafemom.com

Social Networking for the Socially Minded (Part 1)

District Firm Razoo Joins Other Web Site Builders Trying to Reinvent How People Give Money to Charity

washingtonpost.com
By Zachary A. Goldfarb
Washington Post Staff Writer
Monday, December 17, 2007

The office of Razoo on Connecticut Avenue blends two distinct cultures common in Washington.

It has the feeling of an Internet start-up, what with programmers clicking away, big flat screens, an espresso machine and funky green carpet. Yet the photos on the walls from Rwanda and other poor countries and the 11 employees, age 23 to 33, suggest it could just as easily be a nongovernmental organization.

The combination is no mistake. Razoo is a company that has built a Web site to connect people with one another, much like social networking giants MySpace and Facebook, but in support of humanitarian objectives such as preventing homelessness in the United States and helping families who live in a Nicaragua trash dump. Users and causes each have their own pages.

"YouTube is transforming TV. Google has transformed advertising," said Razoo founder J. Sebastian Traeger. "The Web will do the same thing for philanthropy."

Traeger, who built and sold a previous online venture, is following in the footsteps of several other Internet entrepreneurs who are trying to reinvent philanthropy. They hope to apply the tools of the digital age -- such as social networking and peer-to-peer and viral marketing -- to an industry long criticized for its slow-moving ways.

It's not the first time tech entrepreneurs or Web sites have gotten involved in directing money and attention toward social causes. What's striking about the current movement, though, is how technology and philanthropy are intersecting with the start-up, for-profit culture of the Internet.

Risks abound. The for-profit companies are operating in a nonprofit world. And it's not clear if the hype surrounding their potential will be met by reality. "While the fusion of commercial values and non-commercial values makes sense and has promise, it's not going to be this magical cure," said Jeff Trexler, a Pace University professor who has studied the phenomenon.

"Like with any movement there's going to be a shakeout," he said.

Last week, AOL founder Steve Case's foundation announced it would award $750,000 in grants to charities selected by Internet users. Part of the contest will be administered through a "Causes" application that lets users of Facebook affiliate with and donate to charities.

The application was built by Project Agape, a venture-backed start-up in Silicon Valley created by Sean Parker, a former Facebook president and founder of the file-sharing service Napster, and Joe Green, the Harvard roommate of Facebook founder Mark Zuckerberg.

Others take different approaches. The Omidyar Network, started by eBay founder Pierre Omidyar, invests in for-profits, such as Digg, the social news site, and also backs a wide range of nonprofits. Google created a for-profit company for supporting social causes.

By merging social networks and philanthropy, the idea is that people will be more likely to give money or support to a certain cause if their friends do. The Internet also holds the promise of cutting down on bureaucracy and the high administrative and marketing costs associated with raising money.

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