The Economist on Social Networking: Where’d the Love Go?

EconomistThe current print edition of the Economist has an interesting set of articles – most especially so for anyone tracking the “online social network” space.

There’s no byline – the pieces were anonymously authored by a journalist out of San Francisco (though Henry Blodget of the tech industry blog Silicon Alley Insider speculates this could be correspondent Andreas Kluth).

The first piece, “Everywhere and Nowhere” observes that the current gold rush of investors towards the social networking giants resembles the interest showed a decade ago when the web mail startups like Hotmail (later acquired by Microsoft, who pushed it down the path of near-obscurity) and Rocketmail (which was acquired by Yahoo to become the now ubiquitous Yahoo Mail) were the big thing. Trouble is, the web mail sites aren’t really the big-ticket revenue generators, search is.

And so it goes with the social networking sites. The Economist thinks that their revenue models aren’t the stuff that inspires confidence just yet:

So it is entirely conceivable that social networking, like web-mail, will never make oodles of money. That, however, in no way detracts from its enormous utility. Social networking has made explicit the connections between people, so that a thriving ecosystem of small programs can exploit this “social graph” to enable friends to interact via games, greetings, video clips and so on….

But should users really have to visit a specific website to do this sort of thing? “We will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to be social,” says Charlene Li at Forrester Research, a consultancy. Future social networks, she thinks, “will be like air. They will be anywhere and everywhere we need and want them to be.” No more logging on to Facebook just to see the “news feed” of updates from your friends; instead it will come straight to your e-mail inbox, RSS reader or instant messenger. No need to upload photos to Facebook to show them to friends, since those with privacy permissions in your electronic address book can automatically get them.

The second piece, “Break Down These Walls” adds to this train of thought, viewing the current crop of Social Network sites as nothing more than a redux of the “walled garden” communities of old. This brings back bad memories of AOL, Compuserve, MSN, Delphi, and the rest of that ilk (well for the old farts in the audience, at least). Why create these closed communities when the wild and wooly web is out there for the taking?

More insights later as I brew these in my inner espresso machine for the rest of the day. Great thought pieces over all.

2 thoughts on “The Economist on Social Networking: Where’d the Love Go?

  1. social networking, like webmail garners a lot of people, but these people are not looking for products or services to buy.

    the nice thing about search is that you place the ads when people are looking for it.

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