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A-ha, Three Times Over
I’ve been mulling over social networks for much of the last year, and I admit that I didn’t fully grok them at first. I’ve looked at LinkedIn, Spoke, Tribe and Google's Orkut, and others, and I’m on the record as questioning the value of these networks to both user and investor. I just didn't see a clear and viable business model for these services.
But then, I had a series of those slap-yourself-on-the-forehead moments and the word “Aha!” came through to me three times, each time a little louder and clearer:
Aha! #1 came to me while I was updating my Orkut profile. I realized social networks, in certain iterations, are the perfect platform for targeted advertising. After all, when you register at any of these social network services, you describe yourself in great detail: your hobbies, political leanings, favorite activities. When I update my Orkut profile, I become a valuable target for marketers. I also identify with a circle of friends, groups or tribes—depending on which service you use—who share these interests. Marketing dollars effectively targeted to me can have an amplifying effect throughout my network.
Aha! #2 Perhaps this was a blinding flash of the obvious, but business relationships open doors. That is the theory behind Spoke and LinkedIn, of course. You use business relationships to ease the way into new business scenarios. Guarded relationships are more valuable than freely available relationships and as the novelty wears off, members are becoming increasingly cautious about those with whom they share social networks. As this occurs, the membership value a in that network increases.
That is, effectively, what has happened over the past couple of months. We are linking less, but better. And as a result, the referrals along these linked lines are more successful, because there is a real, rather than tenuous, relationship among the links. And that's worth paying for.
Aha! #3 Relationships are a type of new media, because they bring context to communications. When social networks are combined with new media such as blogs, that media is annotated and amplified. The collective community responds to and recommends ideas. I can use the references of like-minded business and social relationships as a filter on the media I consume. In effect, relationships combined with new publishing tools create a new social media.
This concept of social media— a convergence occurring at the three-way intersection of social networks, blogging and syndication is complex. As I prepare for the BlogOn conference and speak directly with this awesome conglomeration of thinkers, pioneers, investors and innovators, I realize that in just a few short weeks I’ve moved from category skeptic to cheerleader.
Social media has the potential to change how we communicate, how we maintain close or cordial relationships, what we read and who publishes it. Social media threatens to disrupt all publishing by decentralizing the process and thus democratizing it.
This is exciting. This is important.
Posted by Chris Shipley at 08:32 PM on June 27, 2004