Category: Web 2.0

Social Networks – The Future

I posted an answer on Social Networks on LinkedIn.

Hi,

Looks like no one can have enough of Social Networks.

In my opinion, the entire wave of networks would keep on flooding the Internet. Pertinent question would be which network would survive in the long term.

Lets not even go into reasons why these networks are created in the first place.

Things that would keep one social network ahead of another are

1. Network Effect: The network with most number of people would eventually win. People would have to join the network with most people and most people would join a network because the network has most people on it. Saw this in action with Orkut in India.

2. Repeat Visitors: Once a social network grows beyond its novelty factor, a lot of people simply stop coming back. Network should have something that attracts people back. LinkedIn: Professionals. Facebook: Applications.

If I need to talk to my friends and other random people about something, I can create a blog, I can comment on other blogs. I can send SMS, emails, call for real. The utility of a social network for daily chores is simply absent. Networks would have to offer more than just dating, friendship, music etc.

3. Offering: A network should give me something that is hard to find (or do) in real life. For example LinkedIn. This is something (access to people with IQ :D) that I cant get in real life. No popular network apart from LinkedIn offers this to me.

Apart from these three, if few networks have to emerge as winners, they need to take care of following

1. Regional networks: Even though Internet does not have any boundaries as such, currently we have different networks dominating different geographies. Friendster – Asia, mySpace – US, Orkut – India and Brazil.

Obviously the reason for this spatial distribution is real connections (you invite, join and interact with social networks where your real-life friends are and most of your real-life friends live close to you)

2. Interest Areas: End of the day you join a network and stay there because you are interested in something and you want to connect to people with similar interests and want their opinions.

Myspace could connect all musicians, Linkedin could connect all professionals etc. The social network that can do this first would end up as a winner in my opinion.

If I was to compare professional interests, FaceBook with its applications is a move in that direction but it still lacks seriousness for a QnA network and more importantly it does not have the kind of people LinkedIn has. Similarly if I was to compare music interests, Myspace and FaceBook are still not there.

In my opinion, social networks are like any other commodity. In the long run, we would have one or two major players with chunk of the market share. And the networks that can aggregate interest areas and geographic spread would emerge as winners in long term.

Regards,
SG

Ever Elusive Users

Definition: User is a person at the core of the business. User should ideally bring revenue to the company. In some cases, if he is not bringing in the money, he should participate.

A lot of new start-ups and websites boast about million users in few months of operation (and in some cases, existence). They say, they have “almost reached” the critical user mass from where they can take-off to the next paradigm of web enabled services that will enable them to harness the collective intelligence that will empower businesses and solve intricate business problems in a cost effective manner. Sounds like Dilbert Mission Statement Generator at work.

Every successful and not so successful business (especially of the online variety) talks about number of users they have and the percentage of market they command. Ironically, they never talk about number of users actually bringing in cash to the business. Everyone seems to be pushing it under the carpet.

The numbers although are very important, they are more likely to be abused and misused. Every time someone says that they have 20 million of the 40 million Indian Internet Users (or half the universe), there should be questions like

  • How many use the service on a regular basis?
  • What is the percentage of repeats?
  • How often do repeat users come-back?
  • How many actually contributed to the revenues in last one month?

    • Obvisouly most of the times, answers are as elusive as the users themselves. It is very very easy to get someone to a website but the hard part is to get the user come back again and again and again. The hardest part, is to get the user to interact with the business. And this interaction actually makes the money for the website. The hook, the stickiness factor, the tipping point is very important.

    E-commerce Websites
    This is especially pertinent for rapidly springing ecommerce websites. mylatestonlineshop.com might have 100,000 users but

  • What is the actual number of people who place orders?
  • How many of these orders are being fulfilled?
  • Do these users come back with more orders?

    • Collaborative or User Generated Content
    Collaborative websites are growing at the speed of mushrooms in India. With ease of implementation of Web 2.0, increasing bandwidths, and lots of time to spare, quite a few user generated websites (obviously operating in their beta modes) have come up. USP for most of these websites is user reviews, user written articles, user made videos, user stories, user this and user that. The biggest question here is

  • What percentage of users is actually creating the content?
  • And how many actually come back on a regular basis (with a frequency of at least once every two days)?

    • Finally, next time someone comes up with a fancy number for their user base, ask them about their revenue per user. If at all they have a revenue stream (apart from monetizing with Google Adsense), answers would be really surprising.

    Someone once said, “With fools and tools anything can be proved”. Next time someone pitches a beta version web 2.0 website with 2 million users, please be skeptic before pumping in the money behind the idea and ever elusive users.

    Comments? Thoughts? Views?

    Related Links
    eBay admits they over-paid for Skype (Business Week, Oct 1, 2007)

    Saawariya is now following you on Twitter!

    I just got this email

    From: Twitter ;
    Date: Oct 26, 2007 12:59 PM
    Subject: Saawariya is now following you on Twitter!
    To: ******

    Hi, s4ur4bh.

    Saawariya (Saawariya) is now following your updates on Twitter.

    Check out Saawariya’s profile here:http://twitter.com/Saawariya

    You may follow Saawariya as well by clicking on the “follow” button.

    Best,
    Twitter
    —
    Turn off these emails at: http://twitter.com/account/notifications

    This is for the first time when an Indian movie has used twitter as advertising tool. The very fact that I am blogging about it means that they have been able to get my attention. And more than that I would spread the word.

    I might watch and might not watch the movie but I will sure talk about it to my friends. I will brag that one I twitter and two Saawariya is cool enough to follow me.

    The Ripple Effect
    Virals are like ripples. Someone needs to drop that pebble that starts the ripple. People at Saawariya are sure throwing a lot of pebbles. These pebbles have to be dropped at the right places. Where water is deep enough to create a large ripple. And where a ripple would not die down after some time.

    Food for thought
    And finally my another theory about social networks. I cant reinforce that human beings in the end are social animals. If a marketer can give humans some food for thought, something to talk about, a context that helps people diffuse time in social gatherings, something people can become master of (by virtue of thought and/or use of words) and the master can attract followers, the marketer would have done his job.

    Most of the time people hang around with same set of people and after a time you know everything there is to know about a person. What do you talk about then? You have to find something to talk about. This is where the Food for Thought would come in. Let people use the food supplied by marketer to kill their time. And spread the world.

    Any thoughts? Comments?

    Comments on Microsoft and Facebook

    I sent this email to a friend in response to his views on Microsoft and Facebook. I have repalced names and email addresses with *****

    Hi *****,

    I also have my two cents on Facebook deal and why I think MS paid that kind of money.

    To start with, it is not about the advertisement at all. It is also not about buying a stake in the company. 1% is too less a stake to have any meaningful say in the company. Ok, it is meaningful but if I was serious about partnering someone, I would rather take 10% odd stake and make meaningful suggestions to the overall vision of the company.

    With 1% MS is saying that they are confident about FB and they like the business and want to be partners.

    The reason could be psychological too. May be after Steve Balmer’s announcement last month about getting 25% of MS revenues from advertising, they had to show something to the world. May be they wanted to prove something to Google .. ? Who knows. Men do funny things to prove themselves are superiors. Envy and Jealousy are two of the most potent forces in the universe.

    As far as exclusive advertising rights, MS already had exclusive rights on FB. This deal just extends those rights to international markets. One might argue that 60% of FB traffic is now international and deal makes more sense, I would say that in web environment, national and international segregation dont really make a sense. If I am in Antarctica and want to advertise about the latest Igloo design, I dont have to advertise from Antarctica, I can advertise from US also.

    Now if I was Bill (I hope I was), I would have thought that the entire Social Networking thingy has gone past me without me making any serious inroads (ok, Windows Live was for sometime making people happy but all it has got is measly 10 mn users), how about getting a piece of the pie?

    There are more things that aren’t really in public domain as yet. Like they have said they would have other partners. They also said that they would not disclose the exact terms of technology exchange that they would have. May be it includes access to user preferences? May be it includes MS and FB’s entry in to Software as a Service space? With this they can take Google head on. May be FB will now truly become a platform rather than just a website where you upload pics and poke at firrends?

    And did you notice that share price of MS jumped after FB deal was announced .. ?

    Regards,
    ******

    P.S.: You have said that it makes “FB, a 100 million OTS website” .. what is an OTS.. ?
    P.P.S.: Please share this with your friends also. I want to see if this makes any sense to them. Thanks 🙂

    He had sent his comments on Microsoft’s recent stake in Facebook