I just returned from a trip to Shanghai, and in case you didn't know anyway, here's my No. 1 insight: China scales.
Let's take QQ.com as an example, the leading Chinese online social network. The site is reported to have more than 300 million active accounts. That is eight times the member base of Facebook--and it's the same size as the U.S. population.
What's also remarkable (and different from the Western social networks) is QQ's monetization. Facebook posted revenue of $150 million for 2007 (and according to Plus8star a loss of $50 million); MySpace.com (purchased by News Corp. for $560 million) is projected to generate $750 million in revenue this year; and Bebo (purchased by AOL for $850 million) had revenue of just $20 million in 2007. While QQ reported revenue of $523 million and an astonishing operating profit of $224 million in 2007. The revenue distribution is unusual, too: 60 percent of the revenue came from services like games, an additional 21 percent from mobile services like ringtones, and only 13 percent from online advertising.
Do added value services trump ad based revenue models?
David Armano from Critical Mass will moderate a panel on "Always in Beta: How Big Business Can Benefit from 'Little' Innovation" at the Forrester Consumer Forum (October 10 to 13). Here's a quick synopsis: "Innovation isn't limited to R & rooms anymore. The Web 2.0 movement--powered by start-ups such as Twitter, Malhalo and even YouTube, has proven that innovation often happens in iterations. Build, launch, tweak, measure, repeat. Digital experiences seem to be 'always in beta'--learning and evolving along the way."
(Credit:
Not Gartner)
The fact that the Forrester Consumer Forum dedicates a panel to this much-blogged about topic is a sign that being in beta has become a broad cultural phenomenon. By nature we are all in beta, as the Boxes and Arrows blog poignantly remarks, and clearly, we now also live in an economy where "planes are built in the air." Many new products never make it beyond trial stage, and the trial and error beta-approach that helps Google and other alpha innovators to out-fail and thereby out-innovate the competition, is as much an attribute of successful organizations as it is a sign of our time.
But it's not only analysts and conference organizers who are switching instantly from micro to macro, picking up nascent trends and elevating them to a must-deal-with core competence that transcends the current fad (just see all the Facebook conferences that are mushrooming right now). What I find even more interesting is how the media and blogosphere deal with it. If everything's in beta, the public doesn't have the patience anymore to wait for the alpha. As the media are increasingly forced to immediately widen the scope and view every innovation in a larger context as it occurs, the boundaries between reporters and commentators, bloggers and industry analysts are fading.
Some examples: Not too long ago, Twitter was all the rage, and it was stunning to see that just shortly after the initial coverage during SXSW in March, reporters were already elaborating on the concept of micro-blogging, wondering what the new "radical transparency" meant for business. Nowadays, there is a great chance that you will stumble upon a Facebook story when you open just about any publication: It's Facebook vs. MySpace, the implications of social networking on the borders between work and personal life, reflections on the "Facebook economy," Facebook vs. iTunes, and maybe a philosophical piece on Facebook "as a post-modern book" or the future of social networking, which, for TIME, equals the future of the Internet. It is only a small step from MySpace to the "MySpace generation," and from Facebook to the "Facebook generation" and then to the "Fakebook generation." Similarly, the recent buzz around Radiohead's "pay what you want" online release has instantly led to the coining of a "Radiohead Generation" and praise for the band "as a pioneer of the digital revolution." And there are hundreds of articles discussing if Radiohead's decision ushers in the definite end of the record industry. The stories about the radical distribution model appear to eclipse the actual music on the album--in this case, too, the reviews are in before the story is told.
Evidently, the media need to cope with the current while also putting forward a vision for the up and coming. The time between observation and conclusion, between description and prediction, however, has shrunk to almost zero. There are no more lapses between news, analysis, background story, industry trend story, and intellectual dissection; they have become one and the same, at the same time. Not only is beta the new alpha--beta has gone meta.
Over at Micropersuasion, Steve Rubel is making a bold prediction: The portals will be big winners in the social-networking wars.
"Social networking is certainly rising and there seems to be no end in sight to the phenomenon. However, what I do know is that people will jump around from one Myfaceborkutspace to another and not all of them will win," Rubel wrote.
He is referring to Long Tail author Chris Anderson, who points out that all good web sites should have elements of social networking and therefore suggests that social networking is a "feature, not a destination." Rubel believes that the portals' key advantage is that they "own the glue that keeps many of usconnected to our structured social networks (e.g. Myfaceborkutspace) and the looser ones--e.g. a personal network of contacts. And that glue is a trusted communication system that works with every person and social net."
That's true. You could also say that our buddy list is our social network, and we appreciate just plugging it into the most convenient and trusted network of our choice. Call it the "floating network." I therefore also agree with Rubel when he says, "No matter which social network(s) you participate in, even if you float, you're going to turn to your trusted communication system to manage it all. This will include any or all of the following: a) Web-based e-mail, b) instant messaging (which is nowadays integrated), c) RSS and d) telephony tools like Grand Central."
There are good reasons why there is a lot at stake for the traditional portals, and there are good reasons (Rubel names them) to predict they will not just sit back and watch the young social-networking sites own the game, especially now that business has begun facing up to social networks. And yet, I am hesitant to follow Rubel's prediction that the portals will have the upper hand in this conflict. In fact, I think he gets the conflict wrong.
I don't think this is as strict an antagonism as Rubel describes it, and I would even question the "war parties" as he identifies them: On the one side, the emerging social networks that are relentlessly trying to enhance the one main feature they're built upon ("making connections") into a platform. On the other side, the big portals, the AOLs, MSNs, Yahoos, that are seeking to operate more like social networks. This is an over-simplified showdown, for Rubel stages a competition where, in fact, we witness a co-evolution. The portals will adapt the best social-networking features, for example by activating the "dormant social networks" they own (see Yahoo Mash), and the social networks will adapt some of the portals' features; just yesterday AllFacebook and Paid Content speculated that Facebook is preparing to launch a music platform, either as a potential iTunes killer (according to AllFacebook) or a MySpace competitor (according to Paid Content).
However--and herein lies the major difference to Rubel's assumption--both social networks and portals are striving to eventually become something entirely different: the new operating system. Facebook is not shy about its intentions, and you could argue that it has already transformed the site into something much bigger than a social network.
It is a not a social-networking war; it is a race to become the de facto operating system for the social networker. And that is, of course, why Google, which is neither a social network nor a portal, is in the game too. The company is said to be feverishly working on "out-facebooking" Facebook by introducing a meta-platform that integrates not only a suite of Google services (like iGoogle, Gmail, Google Talk, Orkut, etc.) but is also 100 percent open to third-party developers--and other social networks. Google's recent acquisition of mobile social-network Zingku indicates that this uber-platform may have a strong mobile component and the long-rumored free, ad-based phone service. In other words, while social networks and portals are fighting the "social networking wars," Google may be winning the actual competition at hand: to become the dominant operating system for all of our communications. You can also call it the World Wide Web.
(Credit:
Areae)
It's not the most innovative name but the concept may be revolutionary. Metaplace, a virtual community that is currently being tested for launch in spring 2008, was one of the most talked about start-ups at the TechCrunch40 Conference. The new platform allows anyone to build a virtual world from scratch -- for the web or even mobile applications -- without any programming knowledge. Like other virtual communities such as Second Life, There, Entropia Universe, or World of Warcraft, the Metaplace worlds can be used for gaming, socializing, and e-commerce. And they come with the usual community features: forums, user ratings, wikis etc.
Unlike Second Life et al, however, users will not need to download any special software to engage in their respective virtual spaces; the service is hosted, so everything happens inside a browser. Because the Metaplace worlds are based on standard web technology, they can be embedded in blogs, Facebook profiles, MySpace pages, or web sites. "It's basically an MMO accessible through Flash apps, 3D clients, cell phones," as Om Malik writes: "While Second Life is evolving as an immersive 3D metaverse which slowly incorporates web elements like XML and RSS in-world, Metaplace is beginning as a web-based network which swallows the attributes of online worlds."
Metaplace is the brainchild of Ultima Online creator Ralph Koster. Koster ultimately envisions people share thousands of user-created virtual worlds with one another and tear down the walls between existing platforms. "We want to see 10,000 virtual worlds so that lots of wild and crazy stuff gets made because that is the only way it will advance as a medium," Koster says. His vision is just the latest in a series of moves to open up the "walled gardens" in online communities: Facebook opened up its platform for third-party developers, Second Life did, and MySpace is supposed to follow soon. Technology Review depicted a mash-up of Google Earth and Second Life into a "Second Earth" meta-verse, and models like Pageflakes allow users to completely customize their homepages. Metaplace presents an even more radical step -- the fully convergent virtual meta-platform for divergent user-generated content.
Slowly but surely we are seeing what may be the tentative contours of web 3.0: a user-generated, entirely customizable "world wide sim" that is mashed-up of geo-mapping (Google Earth), immersive 3D virtual worlds (Metaplace), and social networking features (Facebook) -- peppered with the power of the semantic web (Radar Networks) and a constant lifestream of user content.
Mash, Yahoo's way of quietly saying farewell to Yahoo 360, is at first glance a somewhat uninspired attempt to catch up with Facebook. Even the name is boring--Mash. Don't mix it up, by the way, with Mosh, Nokia's mobile networking site (currently in beta) and Mashable, the social-networking blog. Mash (invite-only as of now) looks like a cross between Facebook, MySpace and Netvibes--and it also has a bit of wiki DNA: Anyone you grant permissions to can edit your profile or add modules they think are relevant to your profile. Besides that, nothing new.
To be fair, it may not be a super-innovative move to come up with another social-networking site, but if you were a Yahoo exec, wouldn't you do the same? As one of the burgeoning social networks may potentially emerge as the new Internet, and yes, maybe the new operating system, Yahoo simply can't afford to not jump on the bandwagon and not leverage the viral powers of its broad user base.
As a user though, I have mixed emotions. I have slowly built my LinkedIn network over the years (although all my European friends remain on Xing, formerly OpenBC), jumped on and off Friendster, and just made it onto Facebook, as a very late adopter, and now I should join yet another network? What are the benefits? Besides a few neat features, what makes Mash truly different than the leader of the pack? Can I at least import my Facebook buddy lists? Is there really a market for multiple social networks? Can you, my loyal friends, please stay with me and not emigrate again?
And yet, there is hope: Every new social network is a chance to learn from the mistakes you made on past sites (when your invitation-happiness compromised the quality of your network). It's a chance to reinvent yourself, relaunch your identity, and start a new life. So I guess I will give it a try.
- prev
- 1
- next





