Social networks: The users revolt II

Mark R Anderson — Fri, 07 Mar 2008 10:21:27 -0800

This is a series that flows directly from Mark Anderson’s annual predictions, presented here in exclusive detail for the Industry Standard.

Part II. How Business Plays

In Part I, we talked about the obvious and unintended barriers between the privacy expectations of consumers, and the highly conflicted online advertising plans of the owners of social networks.

As we wait for that slow-motion car crash to occur, something just as interesting, and much more financially rewarding, is under way. With a similar set of tools and functionality to work with, business people present social network site owners with a virtual opposite to the consumer profile. In fact, these should be called business networks. Business users of such networks are there precisely to expand their own sales and influence.

While it is fair to say that this represents the most robust trend in social networking, it remains something that site owners still don't quite get. Until they understand the deep differences between social consumer networks, and social business networks, a great deal of money will be lost.

As proof of the trend, one has to look no further than the explosion in starts and restarts among the business networking sites. Starting with the old pros, like Plaxo (just relaunched) and LinkedIn (where I think I now have 4.2 billion contacts), and moving to the newer, often offshore sites in India (which has hundreds) and Europe (fast-growing Xing comes to mind), all share understanding of this new, ad-friendly market: Users are there to make business contacts, and to do business, and owners are not there to prevent it.

Having said all this, it seems that many of these business networks still have terms of service which strictly prevent advertising per se, something I think will soon go out the window. Further, there are a lot of protections built into these sites that restrict who can contact you and why, as though you're a 13-year-old girl from the suburbs -- possible, but unlikely.

The worst part here: The new owners seem to have been so cowed by the conflicts we described in Part I of this prediction, that they can't really get down to providing all of the services you'd expect from a business-centered site: General access to the larger population, ability to advertise profit-making products and services to various removed levels of contacts, and, in general, use of the site to make money. And again, I'll give founder Lars Hinrich the nod here for what he's done at Xing, which strikes me as the most advanced business social network site put up yet.

Business-based sites will increasingly provide hub application activities, as Plaxo Pulse now does, exchanging names and services around the 'Net, and thereby creating a convenient level of "meta-services" which you can use without leaving your cozy little home business networking environment.

The success of these sites will, I think, give the proof of how inappropriate advertising was on privacy-sensitive sites, and make the owners of those sites wish they were the owners of these, instead. Are we listening, Rupert?

The Prediction: Users in the new category of business social networking sites will be tolerant, or perhaps even welcoming, of online advertising, compared to the nasty reactions among consumers using social networking. The result will be a clear financial distinction, with business networking site owners making real money.

Mark Anderson is CEO of Strategic News Service (TM), publisher of the technology industry's most accurate publicly-ranked predictive letter, at www.stratnews.com. He is also CEO of SNS Project Inkwell (TM), bringing appropriate technology design standards to K-12 classrooms (www.projectinkwell.com), and Chair of the "Future in Review (TM)" Conferences (www.futureinreview.com). He is a Contributing Editor to the Industry Standard.

Social networks: The users revolt II

Mark R Anderson — Fri, 07 Mar 2008 10:21:27 -0800

This is a series that flows directly from Mark Anderson’s annual predictions, presented here in exclusive detail for the Industry Standard.

Part II. How Business Plays

In Part I, we talked about the obvious and unintended barriers between the privacy expectations of consumers, and the highly conflicted online advertising plans of the owners of social networks.

Social networks: The users revolt II

Mark R Anderson — Fri, 07 Mar 2008 10:21:27 -0800

This is a series that flows directly from Mark Anderson’s annual predictions, presented here in exclusive detail for the Industry Standard.

Part II. How Business Plays

In Part I, we talked about the obvious and unintended barriers between the privacy expectations of consumers, and the highly conflicted online advertising plans of the owners of social networks.