3.7 Social Networking
Social networking sites, which allow users to keep track of their existing interpersonal relationships and form new ones, are experiencing extraordinary growth in Web 2.0. According to the “Hitwise US Consumer Generated Media Report,” in September 2006 “one in every 20 Internet visits went to one of the top 20 social networks.” A large portion of the traffic on shopping sites (and other Web 2.0 sites) comes from social networking websites such as MySpace.1
“What distinguished 2.0 is the design of systems that harness network effects—a broader way of saying community—to get better the more people use them.”
The term network effects refers to the increased value of a network as its number of users grows. Metcalfe’s Law states that the value of the network is proportional to the square of the number of users.3 Consider, for example, eBay—the more buyers and sellers that use the site, the more valuable the site becomes to its users. Google’s AdSense advertising program also increases in value as the number of participating advertisers and publishers grows and ads can be better matched to site content (see Section 3.3). Social networking sites also rely heavily on network effects, often attracting users only if their friends are on the site.
A key part of building a successful network and creating an architecture of participation is setting the user preferences to default to share content so users will automatically contribute to the value of the network.4 Most users do not think about sharing capabilities, let alone care to alter their preferences. If companies do not enable sharing automatically, few users will take the time to share their data. Providing the option to disable sharing is an important privacy feature.
Network effects also make it difficult (though not impossible) to break into markets already claimed by successful companies. User content often loses value when moved into a new network. For example, a photo’s tags (created by the community) on Flickr are lost if the photo is taken to a different site. Competitors must then find a unique way of convincing users that it’s worth the switch.
Friendster was an early leader in social networking. Within a year of Friendster’s founding in 2002, Google offered to buy the site (Friendster rejected the offer). Created as a dating site, Friendster experienced a boom in popularity that quickly overwhelmed its servers. Friendster’s popularity declined as new sites like MySpace emerged.5 Though Friendster has not been able to keep pace with competing social networking sites, it still claims over 45 million members worldwide. It was granted a patent in 2006 on a key part of social networking, specifically how networks of friends are developed (i.e., identifying mutual friends and degrees of separation).6
MySpace is the most popular social networking site. Hitwise reported it as the top website in May 2007 based on market share (beating Google by 1.5%).7 Self-defined as “an online community that lets you meet your friends’ friends,” MySpace allows you to build a network of friends and identify mutual friends. Each user’s page can contain general info, pictures, blog entries, a message board and more. Customization options, such as changing the background or adding music, give users an easy way to create their own unique web page. The site also features a private messaging system and special sections for film, music, videos, classifieds, etc.
MySpace plays an important role in the music scene, and even companies and politicians are creating accounts. MySpace reaches a younger audience than most conventional media outlets. Some political candidates have used MySpace to reach out to young voters and find new volunteers. Though candidates risk embarrassing connections (to inappropriate accounts) on these sites, they have often found the benefits to be worth it.8 Businesses can also create profiles, which then become a form of free advertising. News Corp, which acquired MySpace in 2005 for $580 million, recognizes its benefits for local businesses that want to gain exposure.9 Though many consider social networking sites to be more popular with teenagers and young adults, the largest user group on MySpace (and other large social networking sites) consists of 35–54 year olds.10
Hitwise named Facebook the “preferred network among college students. Because Facebook was closed to non-students, students felt safer than on MySpace, and Facebook became nearly a social necessity for students seeking to connect with peers.”11 In July 2007, Facebook held an 85% market share of four-year U.S. universities and had over 31 million users.12 Though Facebook has since allowed users without an .edue-mail address to join, this elitism and idea of increased privacy drew a large enough crowd to compete with MySpace. A user can set privacy levels for networks or even individuals, but Facebook users (as well as users of other social networking sites) are warned about possible repercussions from information they post.
“Remember, unless you’re prepared to attach something in your profile to a resume or scholarship application, don’t post it.”
The site has added many features over the past few years, including photo albums where you can tag your friends in pictures, recently updated profiles lists, events, groups, a marketplace for classified ads, and user status updates. In May 2007, the site introduced third-party applications that can be integrated directly into Facebook. Not all feature implementations have gone smoothly, though. In Fall 2006, Facebook experienced resistance from users concerned over privacy issues when it added a “News Feed” feature, which lists updates of friends’ Facebook activities in real time.14 Facebook increased privacy options in response, quieting most complaints.
In June 2007, LinkedIn claimed a membership of “11 million experienced professionals.” The business-oriented social networking site allows users to stay in touch with professional contacts, network with new contacts, check references, and find a job or a potential employee. Its low-key design and feature implementations keep the site unobtrusive.15 Because of its older, more mature audience, privacy concerns are more prevalent—some users worry that their professional contacts will be abused by other users or even their employers for marketing reasons.16 However, the site has gained popularity as a convenient way of networking. Members can find other professionals through their mutual acquaintances and get introductions.
LinkedIn monetizes the site through advertising, premium accounts for power users (mostly recruiters), and groups for companies and organizations. Because of the growing size of its network, LinkedIn maintains a strong hold on the professional market.17
Xing is a professional networking site based out of Germany. Xing is most popular in Europe and offers its services across many countries, industries, and languages—an important factor, given today’s globalization of organizations. With its discovery capability and management tools, Xing helps members find professionals, search for job opportunities and locate other business prospects. In April 2007, Xing reached 2 million users.18 Xing has also been acquiring other social networks in an attempt to increase its global reach.
Second Life, developed by Linden Labs, is a 3D virtual world with millions of inhabitants. Users create avatars, digital representations of themselves that they can use to meet other users with similar interests, conduct business, participate in group activities, take classes and more. Some users have created profitable businesses or continued their real-life professions in the virtual world. For example, lawyers have used Second Life to meet new clients (often software developers wanting to discuss patent laws).19 Many large corporations, such as IBM and Hewlett-Packard, have created Second Life presences to connect with customers, hold meetings and even recruit and interview new hires.20, 21
Users can create objects and add scripts (to animate the objects) in the virtual world. Because Second Life allows users to maintain rights to whatever they create, a dynamic marketplace has emerged that does millions of dollars in transactions monthly—the site has its own exchange, the LindeX.22 Not only does this create monetization opportunities for users (one woman claims to have earned over $1 million in Second Life assets23), but Second Life earns revenue from premium accounts, purchases of virtual land and more.
Gaia Online is a popular teen virtual world. This online community allows teens to play games, make friends and express their creativity. Similar to Second Life, Gaia has its own marketplace where members can earn Gaia Gold for various actions they perform on the site (e.g., playing games or posting), and use their earnings at the virtual stores or for creating their own shops. Nearly 300,000 members login daily and about 2 million unique visitors login to Gaia every month.24
Mobile Social Networking
Many social networking sites have found innovative ways of connecting people through the Internet and their mobile devices (such as cell phones and PDAs). Mobile users can send instant messages, check e-mail, and post content to the web from Internet-enabled mobile devices. The new Apple iPhone further realizes the dream of having the Internet in your pocket by allowing the full Internet (not a simplified mobile one) to be accessed wherever wireless Internet access is available.
Google’s Dodgeball.com provides users with mobile access to a network of friends in many cities. GPS chips in mobile devices allow Dodgeball users to update their location and be notified of nearby friends or “crushes.” Dodgeball also provides an easy way of sending messages to groups of friends to plan get-togethers. (See Section 3.14, Location-Based Services.)
Other sites such as Twitter provide similar services, accessible by text message, IM or a web client.Twitter users can message groups of friends at once and automatically receive their friends’ updates on a cell phone or through a chat window. The site is considered to be amicroblogging service (since users are limited to a small number of characters for each update). Twitter offers a web services API, which allows developers to integrate Twitterinto other applications. (See Section 3.13, Web Services, Mashups, Widgets and Gadgets, for more information on web services APIs.)