The Social

No one's denying that the economy's rough. Not a single U.S. company filed for an initial public offering in the second quarter of 2008, the first time since 1978 that this has happened. Mergers in the tech and media industries are down. In this kind of climate, anything from a publicly traded tech giant to the smallest of garage operations can be hit hard.

But if you're one of the little guys, there's another obstacle you have to face: the media hype. (Yes, we at CNET News.com admit that we may, on occasion, be part of this phenomenon.)

Any industry's media can fuel buzz, but the tech industry is especially prone to it; like the notoriously fickle fashion press, tech relies on innovation and "newness." Since there's an incessant march of new start-ups to cover, and a general suspicion of anything that hasn't generated particularly appetizing (or scandalizing) headlines recently, the tech press has turned into a powerful mill for "Whatever happened to...?" tales in which last year's next big thing can easily turn into this year's overhyped embarrassment.

So here's our version of the "Whatever happened to...?" summer story:

Remember Virb? It was that feed-friendly social network that emerged as a "prettier MySpace" a while back from the creators of PureVolume, an indie-music-focused network that had some traction before News Corp.'s acquisition basically took over the online-music promotion market.

With a slick interface that contrasted with MySpace's clunkiness (the social network has since been redesigned), Virb offered an iTunes plug-in that shared music tastes much like Last.fm, and easy ways to pull in feeds from Flickr and other social sites long before the FriendFeed craze emerged.

But Virb never caught on. Traffic is static, and Compete.com says traffic to sister site PureVolume is actually plummeting, with its U.S. traffic showing a 54 percent drop from 2007.

Representatives from Virb admitted that they'd made "some mistakes" in the process. "We didn't do the best job in giving our users the right tools to find new friends, content and communities," exec Brad Smith told CNET News.com. But should things take a turn for the worse, it's probably good that the questionably fated start-up only generated a blip of buzz in the first place: that means a less high-profile fall, and a company like Virb could seek a quick exit from a buyer that likes its catchy interface design.

It won't be easy for megahyped companies that have yet to deliver. The blog world hasn't been quite as ambivalent about Joost, the video start-up from the creators of Skype and Kazaa, which was speculated about for months under the Bond movie-worthy code name "The Venice Project."

Perhaps because of the breathless chatter surrounding the company that was supposed to kill YouTube, TiVo, and your local cable company, Joost seemed all the more disappointing when it launched. The downloadable client wasn't intuitive, and big-time content partners like Viacom didn't always serve up their prime-time offerings.

Then NBC Universal and News Corp. got together to form Hulu, a company that was subject to so much negative buzz ("Big media couldn't possibly get it right") that its launch couldn't have been anything but a pleasant surprise. In truth, Hulu was very well received and continues to get positive press; Joost was suddenly second place in hubs for professional video content.

Joost's representatives, and some of its big corporate partners (including CNET News.com publisher CBS) still believe in it. The start-up has also said a Web-based version is on the way, and bored office drones everywhere awarded it a brief moment in the sun when it streamed 2008's March Madness basketball games live. But if it can't get itself back on its feet, the erstwhile megahype will ensure that Joost won't just fade away. Should it shutter, it could fall into the same sentences as dot-bombs like Webvan and Pets.com, potentially a permanent embarrassment for executives.

Beyond that, hyped projects that flop can have broader industry implications. When the Web drama Quarterlife earned a whole lot of press, it was ported to NBC as a prime-time series. Actual interest in the series hadn't lived up to all the press surrounding it, and Quarterlife lasted a single episode, after pulling in dismal ratings. It remained alive on the Web.

But the real twist about the tech press' hype generator is that things are not always as they seem. When a start-up isn't making headlines, announcing new deals or venture funding, some of us with RSS readers full of tech blogs are conditioned to assume that it's gasping for breath and in desperate search of a buyer.

Take Daylife, an aesthetically astute news aggregator that made quite a few headlines early in 2007. The New York-based start-up, its offices nestled in the middle of the new-media-heavy SoHo neighborhood, had chic launch partners in the form of TreeHugger and The Huffington Post. It had celebrity angel investors in TechCrunch czar Michael Arrington, new-media pundit Jeff Jarvis, and Meetup founder Scott Heiferman.

Press about Daylife's launch took an unexpected turn when Arrington expressed disappointment in the company's final product. We haven't heard much from it in months.

The surprise? Daylife is actually doing all right. It's still nothing compared to Digg or The Huffington Post, but analytics firms like Compete show traffic on a steady rise, in spite of a dearth of blog attention and little Valley name cred.

"There was a lot of buzz about what we were doing, but not by us," founder Upendra Shardanand said about Daylife's choice to stay under the radar. "My point of view is that we let the hype come and go, and just keep our heads down." He said most of Daylife's traffic (and all of its dollars) come from widget development in partnership with big news organizations, which is the company's core business. They've worked with CNN Money, the U.K.'s Daily Telegraph, and The Washington Post, among others, and Shardanand says they're doing just fine.

Another New York-based news aggregation company, Newser, has a similar story. It's been out of the headlines ever since attracting the attention of both Silicon Valley and Gotham media over its insider executive team, headed by publishing veteran and Bubble 1.0 chronicler (in his book Burn Rate) Michael Wolff.

Traffic is still far below that of news aggregation stalwarts like The Huffington Post, but it has been on a steady upward climb nonetheless. Numbers show that Newser is just about even with Daylife on a gradual but consistent growth trajectory.

"We're totally happy with the way everything is going, so for us, it's certainly not a question of hype and media attention," Wolff said in an interview. "I know its value, and I know its lack of value."

He said that while press hype can, at best, give a company a temporary boost, it can have a more adverse effect in the other direction. The decline of a faltering start-up can be all the more precipitous, if the hype balloon had been overinflated in the first place. Would-be entrepreneurs who "are out there ginning up press and not out there creating," he said, will pay for that when they fail to meet expectations.

"We got quite a bit of press attention which we didn't want," Wolff said, echoing what Daylife's Shardanand had said about his own start-up. "It distracts everybody," Wolff continued. "It builds up expectations that you probably can't meet. It makes the operators begin to think that they're something they're not. It takes everybody's eye off the main focus, which is economical traffic growth."

But quiet growth just might not be enough to ensure survival in this kind of economic condition, especially when all signs point to fewer exit routes. It also might not be enough to placate the hungry news hounds who populate the comment rolls of GigaOm and Mashable, and in a culture so rooted in the spread of information, a little meme can get big very quickly.

The common (and not exactly correct) wisdom that Second Life has turned into a 3D ghost town, for example, could easily deter new users from signing up. It's like the fashion industry: when the bigwigs declare something dead, that might actually kill it.

Recently, the constantly talked-about Twitter took down its "replies" feature for maintenance purposes. And TechCrunch, the Boss Tweed of the tech blog world, declared that the new trend was to ditch the fritzing microblogging service for FriendFeed, a social-network aggregator that's proven to be one of the most buzzworthy tech start-ups of '08.

There was only one problem: even FriendFeed co-founder Bret Taylor thinks that's a bit of an overstatement. "There's been a lot of blog posts about 'killing' this service and 'killing' that service," Taylor said in an interview. "(FriendFeed was) founded on the principle that you should be able to use any site you want, even if it's not the same site that your friends use, and FriendFeed provides that social glue."

Not every start-up is going to be able to work its way into a graceful exit, as would-be Twitter rival Jaiku did when Google snapped it up early. And not every company will be able to reinvent itself, which early social-networking leader Friendster managed to do somewhat by gaining popularity in Asian markets after infrastructure issues and subsequent bad press put a damper on its U.S. growth.

That's what Virb hopes to do. "The next iteration of Virb (is) hitting the Internet later this summer," Brad Smith wrote in an e-mail. "If we can take the ideas that worked, and raise that bar up a few notches, I think we'll have a winner on our hands."

Perhaps the best lesson is to just keep going, even if a Valley insider blog says you're doomed. That's been the mantra at Pownce, which launched with the star power of Digg founder Kevin Rose last year and which has received some disappointed reactions since it failed to snatch Twitter's audience away.

"We definitely did receive a lot of hype when Pownce first launched a year ago. However, since then, it's been a lot of steady growth," community manager Ariel Waldman told CNET News.com. She added that Pownce's team continues to work hard. "We have paid accounts, we have public file sharing, which we launched a couple of months ago, and we're always working on new features."

While statistics from Compete show that the original Pownce hype led to a huge traffic spike that soon plunged, it has since stabilized into a "normal" growth phase that has reached about half of its "hype" numbers and continues to climb gradually.

FriendFeed's Taylor said that knowing when to block out the hype and the backlash from the press is crucial. "That sort of negative tone is something that we aren't really that happy about, but it's sort of standard fare in the blogosphere," he said. "People play up or perceive competition, and we're just going on our way, trying to make the best service possible."

Still, there will invariably be a few victims, as in any industry where the media is driven by fast, momentary buzz. Web 2.0, for better or worse, will always have its Twitters.

A look at the tabbed interface that Facebook will be rolling out soon as part of its profile redesign.

(Credit: Facebook)

On Wednesday, after months of nothing but ambiguous screenshots, Facebook finally talked about its upcoming site redesign. It'll make it easier for members to see immediate, dynamic updates from their network of friends, a company representative said, and it'll cut down on some of the profile clutter by distributing user information across a set of tabs rather than having it all on one page.

The big question: Will members like it?

"Any user interface changes, large or small, carry with them a certain risk," developer Kyle Bragger told CNET News.com, adding that big decisions can easily create more confusion. "Audience really should always be considered when making user interface decisions."

And considering Facebook has more than 70 million members, many of whom don't consider themselves particularly tech-savvy, a massive overhaul won't go over smoothly with everyone.

One developer who asked to remain anonymous speculated that members might not like the fact that you can no longer view a Facebook profile on a single page. "(It takes away) the user's ability to create a unique profile page that they identify with," he said. "Even your Twitter profile seems to do a better job of representing you these days."

Ultimately, it's hard to tell how the general response will be, especially since no one outside the company has tested the new design yet. Major changes to Facebook have a spotty history: Facebook members freaked out about the News Feed but welcomed the ability to spice up their profiles with developer applications, and while some prominent critics lambasted the Beacon advertising program, members as a whole didn't seem to care.

But none of those situations involved a total redesign that will put some information in different sections of the site and require users to click around in ways the site didn't before. "Completely switching up the profiles on people will be like upgrading Windows (from XP) to Vista," said Nick O'Neill, the blogger behind All Facebook. "I think Vista looks cool but I have no idea how to use any of the tools, (so) I stayed with XP." The problem is that Facebook members won't have a choice: everyone's getting the new design, like it or not.

Then there are the thousands of developers who have created applications for Facebook's platform and who will have a chance to test out the new design several weeks before the greater membership. Although the code for application creation isn't changing, the way that Facebook users interact with apps certainly will: posting to feeds and "walls" is different, and some applications will have their own browser tabs whereas others will be an additional click away. Some developers have already voiced concerns that Facebook's platform is dominated by "corporate" apps and that it's hard for an indie creation to catch on. With applications on separate tabs, it's inevitable that some will say this worsens the situation.

"Not all of the details have been announced for what changes need to be made. What is clear is that applications are going to need to readjust how their content is displayed." O'Neill said. It's true: a lot of information was left unsaid, including how it might tie into the extension of Facebook's API into Friend Connect. He estimated that some developers likely are "going to be forced to make substantial changes to their applications."

At the same time, some developers say they appreciate the fact that Facebook will now be able to convey more immediate information into "news feeds" that are more advanced, and are looking forward to an expanded profile environment that isn't crammed into a single page.

"Much, much better. More dynamic. More room for breathing," a developer who asked to remain anonymous told CNET News.com regarding the new design. "The older design was very constricted."

When it comes to developer activity, Facebook is no longer the only gnome in the garden of social media.

Last week, a blog post by developer Jesse Farmer set the stage for some lively discussion about whether the Facebook Platform, revolutionary at its launch, is approaching an expiration date--and it only debuted a year ago. Activity in the site's official developer forum has declined sharply, he observed, new applications are less likely to become successful, and now that there are more destinations for social applications--from gaming sites to OpenSocial--developer activity no longer has a single hub.

Farmer crunched some numbers and found that they supported his hypothesis. The number of active users in the developer forum was down 27 percent since January, posts per day were down 51 percent, and he found that the average application launched in early January was 1.5 times more successful in terms of adoption rates than one launched in March.

The Facebook Platform, once a revolutionary free-for-all, has been "suburbanized." The roster of popular applications is dominated by corporations like Slide and RockYou with estimated valuations in the nine figures, and new rules and regulations have made it seem like less of an open playground where a kid with a cool idea and some spare time can start a new online fad or even make a few bucks. It's not a signal of doom for the social network, which has passed 70 million active users, according to company figures, and continues to grow. But it's a sign that the social Web is much bigger, and that Facebook can't be the center of attention forever.

"The forums just aren't what they used to be, and it was less the activity than sort of the quality of the posts that were being made," Farmer, the creator of Facebook application analytics tool Adonomics, said in an interview with CNET News.com on Tuesday. "There are all these people who will pop in, ask a question, pop out."

Developers mostly agreed with his original post, Farmer said, based on feedback he's received. "There were sort of three kinds of responses. One response was, like, 'Yes, we agree,' and there's lots of people who said 'Yes, we agree' who in public would not be able to admit that," Farmer explained. "There's a group of people who are, like, 'Well, maybe, but...' and they have some other explanation."

One entrepreneur said that he's been paying less attention to the developer forums because they simply aren't as useful as they once were. "Jesse's numbers are pretty clear," said Evan Steinberg, who is in the process of creating a Facebook application called Check My Campus. "Developers appear to be leaving or becoming more passive in the forums...I only visit the developer forums from time to time and don't always find what I'm looking for."

Only a handful of people flat-out disagreed with him, Farmer said. "The linchpin of (that) argument is that they present an alternate hypothesis, that people are just used to the Facebook Platform, so they don't participate in the forum anymore and that explains the decline." But more likely, he said, Facebook is a less appetizing place for developers. Early dreams of cashing in on applications have died down. Some independent Facebook applications have gotten acquired by larger companies. Other developers, after seeing their creations fail to gain a following, have likely moved on.

And the kicker came in early February, Farmer explained, when "OpenSocial stopped sucking as much." Medium-size and large social networks like MySpace.com and Hi5 started welcoming developers to their OpenSocial-compatible platforms, and suddenly there was more to do than build applications on Facebook. Farmer added that new rules and regulations on Facebook's platform--what tactics developers could use to spread the word, the nature of the advertisements in their applications--made the environment less hospitable.

Steinberg said: "The Facebook Platform was a huge introduction and I think we're all grateful for its existence. But the Web is opening up and developers are beginning to shop around. Saying you're building a Facebook app isn't particularly novel anymore."

The demise of "fluff"?
Plus, Facebook members are more likely to find that Zombie Wars application annoying rather than cool now. "Applications really have to be good to stick around these days," observed Steinberg, whose application is geared toward high schoolers looking to learn about prospective colleges. "I think we've seen the demise of 'fluff' and will begin to see the survival of utility."

Though Farmer's analysis focused on actual development activity, not users installing and interacting with the applications, he admitted that he wouldn't be surprised if that's on the decline, too. "My suspicion is that any time you're building something on top of a network and you're using network effect to distribute everything you're making, there's a reason it's called viral marketing," he said. "It's because it spreads like a disease, and like any disease, it reaches a point where there's no one left to infect."

The Facebook Platform won't be dying anytime soon, but Farmer said that it's no longer the biggest craze on the Internet and the evidence is beginning to show. "A lot of the people who, when the platform first launched, were very eager to send on invites, have become 'inoculated.'" It's no longer a novelty, so the initial rush has cooled off.

That's a warning signal for the dozens of upstart marketing agencies and development firms that have been betting on social-networking platform applications as the next big moneymaker. It's a symptom of the hype cycle: virtual-world development companies were all the rage a few years ago, but when was the last big announcement you heard about a brand launching a Second Life campaign?

"What we're seeing is a maturation of the marketplace, not just in the technology that's being used, but in customers' attitudes about the industry," said Eric Litman, whose development agency Aux Interactive debuted earlier this year with the aim of creating social-media applications for clients. "A lot of the early exuberance will dissipate."

Litman said that the social-media development world is indeed much bigger than Facebook now. Anyone who's made a significant investment in the social platform craze can't rely on Facebook applications alone. "With OpenSocial, developers have multiple options for how they want to target their audience. There is a significant difference in mindset between the people on Facebook versus those on MySpace versus LinkedIn," he explained. "Slowed new development growth on Facebook does not necessarily mean that development is slowing overall."

But this could turn out well for Facebook, if Mark Zuckerberg & Co. play their cards right. Competition is good for any market, and social media is no exception. If Facebook's onetime monopoly over the application developer market led it to grow complacent, perhaps the competition will cause it to make some modifications and change the perception that it's "a significantly less attractive package than it was even four months ago," as Farmer put it.

Already, Facebook has announced that its application program interface (API) will be modified so that Facebook "identities" can be portable across the Web. Google has announced a relatively similar program called "Friend Connect," and MySpace will be debuting "Data Availability" with a limited number of partners. But it looks like Facebook will be first to market, as it was with its developer platform, and that's key.

Steinberg said that when he launches his Check My Campus application, he plans to use Facebook's developer standard rather than any other, because the social site's university-focused roots are still strong enough so that it's the most relevant place on the Web for an application about choosing colleges to attend.

"I still think the platform is perfectly healthy," he said.