Techdirt poses an interesting counter argument to the typical rocket growth conversations among social networks lately, pointing out coincidences like Bill Gates killing his Facebook page on the heels of Microsoft’s recent $240 million FB investment. Techdirt also discusses the current declining growth trend among early adopters in the social networking space including my favorite, Friendster. FYI – If you haven’t read Inc’s spread on John Abraham’s rise and fall of Friendster “the first social network” from last year it is a must read for anyone interested in this space.

Bloggers attack you, call you “a real asshole” and “a very lucky idiot savant.” Former investors badmouth you. Other entrepreneurs copy your ideas without giving you credit. The New York Times makes reference to your “ballooning ego” and the local Fox affiliate can’t even get your name right.

Here is why I’m not buying into the social network counter argument:

I think social networks as we have come to know them are maturing at a rapid pace. User’s are continually barraged with new social media solicitations and sign-ups everyday. In addition, users are tired of spammers and over zealous ads. Companies like Google, Facebook and Myspace are scrambling to bring order to user’s craving more through the exchange of their social graph data.

Social networks are answering in the form of open api’s, portable data, OpenID and advertising models that will actually have standards. The social network has become a teenager (in Internet years) and is going through some growing pains. Most users maintain accounts hoping to take their profile and friend data with them to the next “it” property when the standards and technology is implemented.

Just like so many Gold rush trends in history, the “me-too” brands will eventually join the deadpool through attrition. The social aggregators and social platforms that hold true value propositions and offer real services to their userbase will survive. Monetization through advertising will continue to be the bloodline for the social network, but don’t under estimate what users may eventually pay for real benefits.

Sending a virtual cocktail or electronic poke is fun and viral but does it benefit a user over the long-term? Expanding your rolodex of like-minded people, pooling resources, solving problems and making money as a user through your social network is the stuff that will stand the test of time.

Check out the the Facebook interview on 60 minutes last night with founder Mark Zuckerberg.

Mark is still writing code and living in a 1-bedroom apartment with the mattress on the floor. Gotta love it.

Imo.im is an instant message social aggregator that turns your social network friends (Facebook, Myspace) into IM friends. This will allow instant messaging to occur through Imo.im instead of through a single IM service like AIM, Yahoo Messenger and Gtalk. VentureBeat makes an interesting case of a possibly bigger trend:

if services that pair social network data with IM will it eventually render AIM and other IM services obsolete?

I think the bigger trend is correct but I think this trend is still wildly unclear which symbiotic relationship between social, IM aggreagtors and traditional IM will surface. Services like AIM, Yahoo Messenger and Gtalk have an enormous userbase built-in and continually rollout “social” services that seamlessly function within the instant messenger environment. The existing IM providers will develop enough social prowess to compete with the big social networks. Compete may be a strong word, but instant messaging services like Gtalk and AIM will continue to go social and force the social network user to go where the useful functionality is. IM in social networks has a lot to be desired and traditional IM has a long working history. Instant Messanging aggregation is a difficult animal because social can go IM and IM can go social, so where does that leave the IM aggregator?

I think Meebo has a huge headstart in this space and is already turning social themselves. Meebo is an aggegator, a social service and distribute killer plug and play widgets that can go in any social network. Meebo is front in center in my netvibes for my IM widget of choice. However I still find myself using traditional IM services…

For example, I have a gmail and yahoo email account….that automatically entitles me to a Gtalk IM and Yahoo IM. I find I use IM because I have email from these providers. Nothing to download, IM is just seamlessly integrated. Yahoo and Google will import your offline contacts and other free email contacts as well. If these services decide to import social network contacts, where does that leave the IM aggregator? VentureBeat nailed the bigger trend in this space and with the web becoming one big open melting pot of services, it begs that question….who will own the killer app? The aggregators or the aggregated.

Monster has plunged into social networking like fellow bellwether Cisco (Tribe.net and Five Across social acquisitions). Affinity labs was purchased for $61 million cash and has a number of specialized social sites. The vertical social networking trend seems to continue, however the fate of these vertical social networks it still unknown and traffic opinions vary widely from a low of 500K uniques a month to over a million.

Let’s hope the trend (and advertising dollars) continue as StartupAddict 2.0 gets ready for final launch.

Om has the full scoop.

An awesome spreadsheet by TechCrunch based on an inquiry to Comscore regarding data for social networks from October 2006 to October 2007 and percentage change.

TechCrunch also has a nice founding timeline and funding amount per company. Enjoy!

Opensocial has been getting big traffic since Google’s announcement into the social arena. Myspace along with numerous other social heavy weights have thrown their hat into the ring. I scan a number of blogs on a daily basis and I truly wish I could remember where I saw a graph of Orkut and Myspace teamed up (in terms of traffic) compared to Facebook. I’m sure a blog in my blogroll lineup is the culprit but I cannot think whom? Anyway, it portrayed a crushing blow to the 40 million users of Facebook. I employ you to take a look at how truly amazing opensocial will be for both Google and social networks. Take a look a the campfire 1 discussion below Google orchestrated regarding Hi5, Flixter, Slide and other case studies. It is as beneficial for the social networks as it is the widget makers. This will create such a drastic change in privacy settings and advertising that no one has even had time to think about it yet.

Google OpenSocial

Opensocial – You got to love Google. The company has become a poster child web startup soaring past 700 bucks a share and has a market capitalization bigger than coca-cola and McDonalds combined (now that is serious). If you’ve been following the postings in this blog or the opensocial posts from TechCrunch, VentureBeat and John Battelle then you know Google is in the social arena.

As a social entrepreneur I see this as more of a boon than bust. Take StartupAddict.com for instance which currently is riddled with broken code from our first wave of programmers (not much longer) and the 2.0 version based on a drupal core is going to be live the middle of this month. I am salivating at the possibility of taking these open social API’s for a spin and have live by Christmas in a 2.x release. If I’m feeling this way as a newbie, Imagine how the other big social networks and social media companies with an established user base like Bebo, myspace, slide, rockyou feel.

One of Google’s spokesperson said “There will be plenty of revenue opportunities for everyone”. This is great news….but any social network with little to no subscription model in place depends on advertising as the only source of revenue to subsidize the growth of the company for bandwidth, hiring etc. So Google can’t be giving away the advertising farm totally, maybe just a reincarnation of adsense socially (so to speak).

You can find the apis and launch at http://code.google.com/apis/opensocial

More Open Social fun from these sources TechCrunch * VentureBeat * John Battelle.

Why social networking sites are so popular is summarized in two words “targeting” and “verticals”. Social networks offer online networking that rivals real world networking such as trade shows, business meetings, bar scenes etc. This is because like-minded people have aligned interests and attract each other. For example if I love classical music and love web programming then I am a highly sought after target and become a defined vertical for advertisers. Social advertising will continue to be a necessary evil and bloodline for web companies that have a user base but unproven revenue models in subscriptions or transactional income. This is a guaranteed revenue stream from social networks or developers of social networks (Google’s open social). Advertisers will continue to find out as much as legally possible to get the right messages in front of you. Whether it is based contextually, behaviorally, geographically or socially.

As a user of a social networks, a tremendous amount of information is voluntarily disclosed. Although many sites like Facebook and StartupAddict have privacy settings available to users, it is inconsequential to the social network database that acquires this information. The database still acquires the information and serves up information to advertisers. Think of it as advertisers paying for the social services you enjoy. At the end of the day social network users benefit in the real world along with the social network itself making a compelling answer to why social networking sites are so popular. It’s an online extension of our offline social status.

Facesoft or Microbook (sorry couldn’t help myself) is about to get a heavy dose of social networking competition from Google according to a great article from TechCrunch.

Facebook’s move to open up the “social network” for application developers was a brilliant move. However, the one niggling and critical complaint from Facebook developers is not having the ability to export or pull data outside of the Facebook platform and into third party applications. Facebook does not want developers to have the ability to pull data outside of Facebook and into third party applications via the APIs.

Another security blanket Facebook has in place currently (as noted in the Zuckerberg – Battelle interview) The Terms of Service put forth by Facebook has a very anti-competitive feel as well. Essentially allowing Facebook to shut down application developers that may cut the head of the beast and compete directly with Facebook.

It has been said in many blog postings Facebook is 98% there. No doubt, but the last 2%, just like the last mile was for broadband is the chink in the FB armor. Google’s plan is a back door approach by taking all the apps and services already in place through iGoogle, Orkut, Gmail, Google Talk and socializing the services. To fuel the fire even more Google is going 100% open with a new set of APIs that will let other social networks like startupaddict.com (if I can ever get version 2.0 launched) interact with google applications. Imagine if the UK site Bebo having the ability to push and pull Bebo/Google data within the Bebo network. My brain actually starts to spin when I think about the privacy and advertising implications of this, but one thing at a time.
TechCrunch has another more specific API article that will shed even more light.

Awesome stuff!…

It’s not “what you know” but “who you know”. The old cliche’ is being modified a bit by Facebook’s social graph concept. The social graph is more about “what people around you know”. I’ve been trying to wrap my arms around the term Mark Zukerberg put forth. What I am able to glean thus far is two components to social networks. The first and most common is the Linked-In concept of being connected directly to people you know and who they might know. This mirrors the six degrees of Kevin Bacon concept. The second social graph concept is a bit more analytical by culling through the 40 million user base and identifying sub-networks and social connections from the registered masses. These connections are based on geography, industry, skill-sets, common interests, goals etc. Much the same way Google can index and make a sitemap of any given website, Facebook is capable of doing a social index and sitemap among its’ 40 million users that are being crawled to define the social graph. A combination of user’s social and private information is made into categories topics and buckets based on any number of analytical social parameters. this allows one to socially interact with like-kind, like-minded and like-proximity people at break-neck speed, essentially doubling and tripling one’s possible network connections. Sounds awesome right? Now comes the fun part…

Targeted Advertising…rather than using contextual based advertising that Google so deftly conquered, Facebook has the ability to serve up highly relevant ads based on categorized or tagged social connections. Imagine a geography of Boston in an industry of musicians that have a tendency for goth and grunge interest. Bingo an advertiser would pay a premium well beyond the normal CPM to have access to a targeted group of users like that. Look at John Battelle’s Federated Media (FM) and how the premium price paid verse other blogs is worth the price of admission for the targeted audience it serves. This is obviously only one of many possibilities when an entity such as Facebook has command of 40 million interacting users. Just think, a 30 second spot on network television during the superbowl runs 1-2 million bucks for a very general untargeted spot aimed at roughly the same number of users (and growing) registered on Facebook. The concept resonates with the early 90s song “things that make you go hmmm”.

I may eat my words of “overvalued at $15 billion” based on the previous thoughts, but the proof will be in the pudding and Facebook needs a better hook to get out of the $200 million a year realm of revenue. But with Microsoft and NY hedgefunds diving in, anything is possible. It will be fun to watch.