Friday, March 13, 2009

Should Social Networking Sites consolidate?

So many social networking sites (SNS) have come up in last 5 years and yet many of them are highly successful. In fact, it was the fastest growing category of websites in 2008. Entry barriers are pretty low but gaining critical mass through network effects and monetising them is extremely hard.

Users have been complaining about the
large number of social networking sites. Every new SNS was remarked by reviewers/critics as yet another or me-too. Friends who have joined those networks keep sending new invites to join. It is annoying as there are too many sites to manage in terms of accounts, privacy, friends, messages, profile, contents, status message etc. This leads to lot of duplication of effort and more importantly inconsistency of information.

Can’t they all merge together/consolidate on a common networking platform and build special applications for each type of network niche?
1. Monopoly – Internet, World Wide Web is so successful because of its free nature, no body owns it and yet everybody uses it. Merging will create a sort of monopoly and one who controls the core platform will exercise power over others. Monopoly creates imbalance, kills innovation and is good for the business but bad for users and society.

2. Growth – Being in the early growth stage of Product Life Cycle, consolidation is unnecessary. It is done usually in the maturity and declining stages.

3. Theme – Most SNS allows user to create a profile, send messages, upload pictures and videos, write status message and so on. But the same information is filled according to a context. In facebook one tries to be cool and casual while in linkedin one needs to be professional.

4. Features – The main reason why communities or sub-networks in main networks fail is because the communities don’t have the necessary tools for sharing and collaboration. Specialised sites can create them. E.g. flickr has tools for photographers; dhingana has tools for music lovers.

5. Network – In our social life we have different network i.e. family, friends, professional and special interest. They are vastly different and we don’t get all of them together not even during marriage. We like our family, relatives and close friends to attend our marriage but we keep a separate reception for our friends and colleagues. I wouldn’t have my boss in my facebook network to let him observe what I am doing in my personal life. Or I wouldn’t want my family/relatives to know with whom I am dating ;-) So I will use geni for family/relatives only, facebook for classmates/friends, linkedin for colleagues, picasa among my photography network.

6. Just a click away – Beauty of web is any webpage is just a link away. It is normal for everybody to have a blog, orkut, facebook, twitter, linkedin and flickr accounts. Integrating them is as simple as just hosting their links.

7. Advertisements – SNS has rich information about the user’s profile which can be used by advertisers for targeting. Also there is lot of activity that takes place and time that user spends on it giving enough opportunities for advertisements. It will be better if there are specific niches where advertisements can be even more effective. I will advertise on flickr if I launch a new camera, dhingana on releasing a movie/album, apple forum if I write a new application for apple’s app store, linkedin if I want to hire somebody than on general ones like orkut/facebook.

8. Simplicity – facebook being a giant offers every thing that twitter offers. Still people use twitter because of its simplicity. Twitter does just one thing but does it well.

So, clearly consolidation is not a very good idea but opening up the network through APIs is. Instead of somebody coming up with a new sns to just add a new feature he can use the existing network itself. More than facebook, I like the way linkedin has gone about this by partnering with the best in business like amazon, slideshare, simplyhired, wordpress and
many others.