Openness, network effects, and competition in social networks

The social networking space has opened out significantly today, with two significant announcements changing the state of play and introducing a new level of competition. From the very beginning of the social networking space, with the launch of sixdegrees.com in 2000 (which gave up the ghost in January 2002), the fundamental underlying issue was whether social networks would be entirely exclusive and competitive, or whether they would in some way integrate to create a global social networking space. Today’s news suggests that finally, after many years of highly competitive play, there is the potential for more open social networking systems.

The first key news is Plaxo’s release of a new social network Pulse, due out on Monday (Robert Scoble has provided pre-release news, apparently leaked at the end of a long party). Almost everyone has been subjected to emails from Plaxo over the last few years asking them to confirm their contact details. From the birth of Plaxo, it was clear their ultimate business model was going to be something quite different, building on the extraordinary database of members and contact information they were acquiring. With the recent surge in popularity in Facebook – which means that now a far broader segment of the population is familiar with social networks – Plaxo has decided the time is right to make their move.

What distinguishes Plaxo’s new offering is that it is more open and offers more user control than Facebook. On the one hand Facebook is a poster-child for openness, in that it has opened up the platform so any developers can create applications that complement the system. Yet in many other ways Facebook is a highly closed system, only allowing users to access profiles and content. Plaxo will allow its users to aggregate feeds and contents from any location, and to take that content and use that anywhere else. In addition, it allows a far greater degree of control on who can and can’t see particular information or content on your profile, allowing you to present different faces to professional and social audiences, for example. Venture Beat has some screen shots of Pulse.

The other key announcement is that Netvibes is allowing users to view their Facebook friends and notifications within Netvibes. This means that Netvibes users can access everything they need, including news and feeds as well as their Facebook information in the one page. However Netvibes is still not able to access Facebook news. In this case the underlying functionality of Facebook is not being replaced, but it means that the play to be the primary aggregator, or space where people access their online information and activities, is definitely still in play.

For a long time MySpace was the predominant social network, with the key question being whether they would over the next years retain their position or be supplanted. Facebook has recently changed the game with its extraordinary growth, driven by accessing a new demographic, and its move to open out the system to developers. However it’s possible that the landscape will now evolve far more rapidly, as the shift to openness accelerates. Facebook now has a choice of locking down, as MySpace has done on a number of scores, or going with the broader trend and opening out. Either way, more open players such as Plaxo will be in a good situation. It doesn’t seem likely that we will get to open standards on sharing social network information, which the data standard FOAF (Friend of a Friend) aspires to, however if social networking players continue to provide deeper access to data, the same aim of open social networking platforms will be achieved. Once again, the powerful trend to openness is being illustrated in practice.