I have been thinking a lot about social networks lately, and why there are so many of them, and what will happen in that space.
Today I had what I think is a "big realization" about this.
Everyone, including myself, seems to think that there is only room for one big social network, and it looks like Facebook is winning that race. But what if that assumption is simply wrong from the start?
What if social networks are more like automobile brands? In other words, there can, will and should be many competing brands in the space?
Social networks no longer compete on terms of who has what members. All my friends are in pretty much every major social network.
I also don’t need more than one social network, for the same reason — my friends are all in all of them. How many different ways do I need to reach the same set of people? I only need one.
But the Big Realization is that no social network satisfies all types of users. Some people are more at home in a place like LinkedIn than they are in Facebook, for example. Others prefer MySpace. There are always going to be different social networks catering to the common types of people (different age groups, different personalities, different industries, different lifestyles, etc.).
The Big Realization implies that all the social networks are going to be able to interoperate eventually, just like almost all email clients and servers do today. Email didn’t begin this way. There were different networks, different servers and different clients, and they didn’t all speak to each other. To communicate with certain people you had to use a certain email network, and/or a certain email program. Today almost all email systems interoperate directly or at least indirectly. The same thing is going to happen in the social networking space.
Today we see the first signs of this interoperability emerging as social networks open their APIs and enable increasing integration. Currently there is a competition going on to see which "open" social network can get the most people and sites to use it. But this is an illusion. It doesn’t matter who is dominant, there are always going to be alternative social networks, and the pressure to interoperate will grow until it happens. It is only a matter of time before they connect together.
I think this should be the greatest fear at companies like Facebook. For when it inevitably happens they will be on a level playing field competing for members with a lot of other companies large and small. Today Facebook and Google’s scale are advantages, but in a world of interoperability they may actually be disadvantages — they cannot adapt, change or innovate as fast as smaller, nimbler startups.
Thinking of social networks as if they were automotive brands also reveals interesting business opportunities. There are still several unowned opportunities in the space.
Myspace is like the car you have in high school. Probably not very expensive, probably used, probably a bit clunky. It’s fine if you are a kid driving around your hometown.
Facebook is more like the car you have in college. It has a lot of your junk in it, it is probably still not cutting edge, but its cooler and more powerful.
LinkedIn kind of feels like a commuter car to me. It’s just for business, not for pleasure or entertainment.
So who owns the "adult luxury sedan" category? Which one is the BMW of social networks?
Who owns the sportscar category? Which one is the Ferrari of social networks?
Who owns the entry-level commuter car category?
Who owns equivalent of the "family stationwagon or minivan" category?
Who owns the SUV and offroad category?
You see my point. There are a number of big segments that are not owned yet, and it is really unlikely that any one company can win them all.
If all social networks are converging on the same set of features, then eventually they will be close to equal in function. The only way to differentiate them will be in terms of the brands they build and the audience segments they focus on. These in turn will cause them to emphasize certain features more than others.
In the future the question for consumers will be "Which social network is most like me? Which social network is the place for me to base my online presence?"
Sue may connect to Bob who is in a different social network — his account is hosted in a different social network. Sue will not be a member of Bob’s service, and Bob will not be a member of Sue’s, yet they will be able to form a social relationship and communication channel. This is like email. I may use Outlook and you may use Gmail, but we can still send messages to each other.
Although all social networks will interoperate eventually, depending on each person’s unique identity they may choose to be based in — to live and surf in — a particular social network that expresses their identity, and caters to it. For example, I would probably want to be surfing in the luxury SUV of social networks at this point in my life, not in the luxury sedan, not the racecar, not in the family car, not the dune-buggy. Someone else might much prefer an open source, home-built social network account running on a server they host. It shouldn’t matter — we should still be able to connect, share stuff, get notified of each other’s posts, etc. It should feel like we are in a unified social networking fabric, even though our accounts live in different services with different brands, different interfaces, and different features.
I think this is where social networks are heading. If it’s true then there are still many big business opportunities in this space.