Is that the sound of the social networking bubble popping?
UPDATE: I just read this post on the same subject. I think to a large degree we’re saying the same thing. He read Andreessen’s quote and interpreted it as a comment on technology, I read it as comment on an understanding of how to use technology - that is, I read it sort of as support for the notion that Cisco doesn’t know squat about how people use these sites. I think, though, the he’s probably more right in reading it. But we agree in our belief that success in this space isn’t defined by how many whizbang features there are but in a site’s access to its audience.
UPDATE 2: Also came across this post which talks about the “white-label” services currently available for social networking in a box. It turns out there’s a lot of them and he compares it to the CMS and Portal crazes of yesteryear. I think it’s pretty interesting comparison and the number of these services is startling.
Cisco just bought social networking company tribe.net. Does this mark a top for the social networking market? With everyone and their dog, and now also their network infrastructure company, looking to get into that space doesn’t that mean the market has reached it’s peak? Marc Andreessen said, “The idea that Cisco is going to be a force in social networking is about as plausible as Ning being a force in optical switches,” which seems reasonable to say.
These sites are huge, that’s their point. If no one is on them, no one will get on them. Having a ton of them, I suspect, doesn’t help. Letting me create my own social networking site for Cthulhu worhippers doesn’t mean that they’re all going to come to my site - because they all are already on MySpace. They don’t want to have to create and manage a new profile on this new site that none of their friends are on. True, I might provide some extra functionality that MySpace may not provide, but unless I can give them direct access to the sleeping god, I suspect that if MySpace wanted to they could roll out something that would keep their users. Making social networks that have very limited and direct appeal is a strategy that I just don’t believe is going to work.
You can have your facebook and your myspace and your linked in, because each of them targets a demographic that is both enormous and not competitive with the other. I’m sure there’s a copule other very large demographics that have yet to be served, but the number of these sites that can exist and be successful (by the standards of the investment community) is, most likely, extremely limited.Creating a network for a small demographic means that you’ll need to attract a signficant portion of your target and that is tough, the one’s who are going to be into a social network are likely already to be on one. The one’s who aren’t, I’d guess, aren’t because they don’t buy into the social network idea.
Does the long tail apply to the actual creation of social networking sites and not just the product of the existing ones? I’d guess no, but what if it does? It seems like that would be a tough business to be in. There would be some lock in for existing sites since it would hurt to move. But what would be the lockin for new ones? It would be a constant battle to improve the functionality, which is great, but as a particular service ages, it will be more difficult to compete with new sites built from scratch with all the new functionality cleanly implemented at the core. I guess we’ll find out and probably pretty soon as all the hype heats up to this fevered pitch.
