The Future of Online Social Networking

I’m flattered that from time to time our investors solicit our perspective on the changing landscape of Internet media. Most recently I was asked to provide our thoughts on the future of social networking, the business model challenges, and the core components of an effective social media platform. Business model challenges are a multi -part blog in itself, and for the purpose of this exercise I will focus on the core components of a social network and how social networks will evolve over time.

Online social networks are driven by three primary functions: communication, context, & technology (or tools).

Communication
Robert Young provides a detailed overview of the critical role that communication plays in an effective social networking environment. Young points out that the “communication anchor” of FaceBook is “the wall”, or the bulletin board on the homepage of a member profile that allows members easy access to communicate with one another. Email is another communication anchor – probably THE communication anchor in today’s online social networks. As these communication anchors become extensible across the Internet through web services and pushed out to mobile via both text & voice, so too will the online social network integrate with the offline world of our everyday lives. Social network convergence is already taking place, with organizations such as Meetup.com and www.RedCarpetMonday.com facilitating bridge between online social media & real world, physical networking events.

Young observes that “what attracts people initially is often not what keeps people on your network interested and vested in the long run communication as the extensible anchor.” A friend of mine, thrilled 6-months ago that Facebook has reconnected him with all of his friends, colleagues, and college alumni, hasn’t been back to visit this site in the last several weeks. As social networks can be extraordinarily trendy and momentarily engaging, it’s clear that sustainability is found in an ability to engage on an ongoing basis, and that communication anchors play a significant role in that engagement.

Context
Chuck Allen succinctly defines ‘social networks’ as a network of nodes (people and/or organizations) and ties (the context) of relationships or connections). “Context”, he explains, “is a matter of finding the ties that are relevant, meaningful, or useful to particular individuals.” Context can be the link between a job hunter & an employer, a passion for music, an interest in cooking or a love for Chihuahuas. Earlier social networks lacked the vertical context of today’s social networks. Tripod & Geocities allowed us to build homepages, but didn’t explicitly connect individuals based on context. LinkedIn connects individuals based on their business relationships. CafeMom just raised $5 million based on the commonality of, well, motherhood! While social networking is still, in my mind, in its relative infancy, those models that tap into the strongest and, most profitable ties, will prove to be some of the more compelling social network destinations.

Technology & Tools
Despite the ability to communicate with others based on some sort of context, the social networks of the future will incorporate more of the technologies made available through today’s XML based web environment. Web services now allow individuals with the LinkedIn toolbar to see who they know at companies that they may be prospecting on CareerBuilder. More recently, Facebook allowed ‘outside the wall’ to allow any developer to extend the platform. HairFlix is a social network for stylists & makeup artists and provides a virtual storefront to buy & sell haircare products & accessories. Emerging players in the social networking space are making significant headway by establishing themselves as niche, vertical destinations providing unique technologies to enhance and extend the contextual experience.

The Future of Online Social Networking
By identifying the anchor & driving characteristics of today’s online social networks, we project a good idea of how the space will evolve. Below I’ve outlined a few concepts that will become more and more prevalent as this space matures.

Social Marketing
Social marketing has two meanings depending on who you talk to. The first understanding of social marketing is that products & services will be marketed based on context. Facebook is already implementing social marketing campaigns to target users based on the information in a user’s profile. Like Chihuahuas? Why not check out the Chihuahua Club of America. Are you Lebanese? Welcome to Arablounge.com.

The other form of social marketing, of which I personally have an affinity for, are products and services based on social responsibility. Products that donate a percentage to charity, or that utilize environmentally friendly products, are great examples of socially marketed goods. As we associate online through various contexts, values & morals are probably two of the strongest personal connectors. Values or Moral Based Purchasing is a concept that was, until recently, relatively unknown. In the future, our ability to utilize online social networking to connect and transact with those of similar value systems will play a major role in cost effective direct marketing.

Middleware
One can only belong to so many social networking groups. With the emergence of new verticals and additional contexts comes the need for ‘carrying’ your network or various components of your socially networking profile from vertical to vertical. Soon we will see a robust middleware marketplace with tools similar to MSN passport that allow an individual to complete a single social networking profile and ‘syndicate’ relevant profile information to various vertical networking groups. Users will set permissions based on which information they’d like to share, and security of information will become a subject of intensifying scrutiny.

Open Extensibility
With the advancement of social software that removes limitations on the technical knowledge necessary for development, more an more users will be able to extend core platforms, allow social networks to evolve in an ‘open’ environment driven by the needs of its user groups. As mentioned before, Facebook already offers a developer platform and allows API integration outside of the core platform environment.