Social networking hottest Net trend
globetechnology.com
By DAVID TICOLL
Globe and Mail Update
POSTED AT 8:55 AM EST Thursday, Dec. 4, 2003
Get ready for social networking, the hottest Internet hit since the dot-com crash.
If you haven't heard of Friendster, Tickle or Tribe Networks, you're out of touch with the Net generation. And if you don't know about LinkedIn or Spoke, you're not hip to the new alchemy for turning business relationships from dross to gold.
Speaking of gold, make way for the rush. In late October, Friendster raised $13-million (U.S.) from Silicon Valley venture capital icons John Doerr (of Kleiner Perkins Caulfield & Byers) and Bob Kagle (of Benchmark Capital). Investments in LinkedIn ($4.7-million) and Spoke ($11.7-million) followed quickly. Then the Washington Post and Knight Ridder joined a $6.3-million financing of Tribe Networks.
Meanwhile rumours fly that IBM and Microsoft have major designs on this market, and the media announce that social networking is the Internet, Wave 2.
All this fuss is about six degrees of separation. The science behind this pop-culture phrase dates to 1967, when Harvard psychologist Stanley Milgram asked volunteers to forward letters via acquaintances to a stockbroker whom he identified only by name, job, and general location. Instead of meandering indefinitely hither and yon, a typical letter reached its destination in a mere, and surprisingly manageable, six steps.
Since then, network analysis techniques, powerful computers and the Internet have turned social networking from lifestyle curiosity into a phenomenon to be harnessed for fun, results, and profit. The theory includes some interesting insights. For example, weak social ties outside a person's normal clique are disproportionately important to functions like finding a job or new information. And though most people have few acquaintances, some special individuals called "hubs" have many relationships.
Network analysis helped control last winter's SARS epidemic and is part of the Pentagon's anti-terrorism technology arsenal. Beyond such esoteric pursuits, social networking is joining everyday life, both for consumer and business-to-business applications.
With four million member accounts and growing like mad, Friendster is the leading and archetypal consumer social network. It presents as a way to meet people and, well, get dates. You sign up, type in a personal profile, and invite your friends to do the same. Then they invite their friends, who invite theirs, and soon you connect and cross-connect to an ever-expanding social network. One Friendster member reportedly has 278 friends who link her to 1.1 million others. Friendster is big in Canadian universities. It's hot in Asia and among U.S. subcultures from porn queens to venture capitalists and neo-Nazis.
Friendsters with made-up IDs are known as Pretendsters; pets and household objects are Fakesters. While the site has no income to speak of today, Mr. Kagle and his partners are hard at work dreaming up business models, like charging merchants for referrals when users recommend good buys to one another. Meanwhile he hopes "network effects" à la eBay will keep the competition at bay.
Tribe Networks' business model is more direct. The site is a hybrid between social networks and classified ads. Looking for a used sofa? Tribe will transfer you to someone you can trust via the branches of your extended social network -- and take a cut of the price you pay. Its newspaper investors see Tribe as a new way to do classified ads.
Spoke's positioning is industrial strength, business oriented social networks. Rather than cobble them together contact by contact, Spoke assembles your extended networks in one fell swoop. You agree to let it mine your address book or e-mail files, it collects your connections, loads and matches them to the rest of its database. The goal, rather than making friends or buying consumer goods, is to let you mine the knowledge of the extended network to perform business tasks.
Want to pitch a new line of lawn chairs to, say, a Canadian Tire merchandiser but nervous about making a cold call? Spoke will list some people you know -- or who know you -- who can, through their personal networks, eventually connect you to the merchandiser. Then, before she agrees to an appointment, she may turn the tables -- use Spoke to find someone to tell her if you're worth meeting and what to expect from you.
At the end of our interview, Spoke CEO Ben Smith revealed that he had done precisely this to preparing for our chat. He'd called three contacts with strong links to me; one connected him to a previous interviewee. Though weird to hear, it explained why he seemed to know how to push my buttons.
Spoke's marketing focuses on how it can help salespeople be more productive and avoid cold calls, but -- as my experience illustrates -- it can be a much broader "knowledge management" tool. It would also be handy for headhunters and job seekers.
What about privacy? How do I feel about landing up on the Spoke network just because my name is in a salesperson's contact list? Mr. Smith says our privacy has already been violated by 411, Google and the like, and argues for freedom of speech. But pressed, he agrees that privacy is a fair expectation -- and points to a collection of seemingly workable protections.
These and similar businesses are jarring. They will make us rethink the architectures of our social and business relationships. And they will evolve in as yet unpredictable ways. In the mid-'90s, you needed to personally use the Internet to find out what it was really all about. The same applies to social networking. Check out some of these sites for yourself and imagine how they may change your life.
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David Ticoll's new book is The Naked Corporation: How the Age of Transparency Will Revolutionize Business, written with Don Tapscott.
dticoll@globeandmail.ca |
