March 25th, 2008
Why isn’t Facebook a founding member of the OpenSocial Foundation, along with Google, Yahoo, and MySpace? Because Facebook is threatened by OpenSocial’s ultimate aim of connecting user profiles and enabling users to easily manage and port their data across any social network.
Facebook is worried that this will enable groups of friends to easily pick up and move their social activity en masse to another network — or, even worse, that you won’t have to join Facebook to connect with friends on Facebook.
Why does Facebook fear this so much? Because Facebook’s social networking features are a commodity.
Even Facebook’s third-party applications will effectively become a commodity of sorts, in that developers will be able to use OpenSocial to make applications available on any social network. So the applications themselves aren’t commodities — but a social network having the application will cease to be a differentiator.
Facebook fears the openness of OpenSocial because it doesn’t really have a differentiated product. All that differentiates Facebook for an individual user is the presence of that users friend’s on Facebook — which forces them to use Facebook to connect with them.
But if OpenSocial makes it possible for user profiles to communicate across networks, then Facebook becomes just another set of generic social networking features, supplemented by third-party applications also available on any other network.
So why did MySpace join? Well, for one thing, they don’t have a $15 billion valuation to support, so they can afford to bet on the evolution of social networking.
And what is the evolution of social networking?
I think it will be the decommification of social networks, which will increasingly offer features customized to particular users, which complement, rather than compete with other social networks a user may belong to.
If two social networks target the same definable groups of users with unique features and value propositions, OpenSocial makes all the sense in the world. OpenSocial connections can enhance the user experience (heaven forbid we put users first) by integrating the experience across networks and making it easy for users to manage multiple profiles.
For the social network itself, creating an OpenSocial connection with a complementary network can be a form of co-marketing/co-registration. Even better, if there are active read/write connections between networks, data created in one network can enhance the other network its connected to — and vice verse.
Only a social network like Facebook that has no unique value proposition and depends instead on a traditional customer lock-in and monopoly control strategy need fear OpenSocial.
And even then, I think resistance will ultimately prove to be futile. (I’m tempted to quote Eric Schmidt’s “don’t bet against the Internet,” but realize what a cliche that would be — oops, I guess I just did.)
The web advantages companies like Google that can harness network effects and profit from liquidity in the system. That’s what OpenSocial will do for social networking.
Of course, none of this means there won’t be a market for standardized social networking features — but the big player in that market may turn out to be Ning, whose white-labeled social networks are able to differentiate themselves based on their brand identity. Ning social networks can have a unique purpose, i.e. the REASON why people connect — compared to Facebook, where the reason for joining is generic, and even the reason for “friending” someone is generic.
Not surprisingly, Ning has embraced OpenSocial for applications, and I wouldn’t be surprised to see them enable OpenSocial connections among their networks and with third-party networks.
If Facebook builds its business around a closed, undifferentiated, generic network, it will quickly become an old mass media company.