An article on AlwaysOn on LinkedIn's prospects makes some interesting points that I'm going to summarise and generalise to social networks in general:
- Niche-ification If I may coin a term, Social Networking 1.0 is now progressing to Social Networking 2.0. Broad-based networks such as LinkedIn and Friendster will gradually move towards providing functions for more niche community interactions. (LinkedIn already does this to an extent with its groups feature.) In a sense, this is merely the culmination of a trend of convergence. Groups features from Yahoo!, MSN and Google have long provided people the ability to pursue niche interests (anyone for "Self-Reference Paradoxes & Incompleteness in Logic & Computer Science"?). What could be more obvious than adding such functionality to social networking services?
- Revenue! Social networking sites making money? Glory be! What started off as mere hobbies or side businesses for some (YouTube, Flickr, Facebook...) actually make money today.
- Member services It seems LinkedIn is planning to provide member services that go beyond finding jobs or new employees. Great idea, IMO, and one that goes back to their roots in helping entrepreneurs and VCs connect. This ties in somewhat with niche-ification. Services = higher margins and niches ≈ services, arguably, so the trend towards niches should reinforce the growth of services.
- Aiming to be acquired No surprise here. Exit strategies are centred around being acquired. Makes sense. A social network may make money on its own but the big bucks are more likely to be in cross-promotions, up-selling and all those other evil, evil things marketing guys dream up. :) Which means living inside media houses (Newscorp/MySpace), telecom firms (Verizon/Good Call Bad Call) and perhaps even consumer goods companies (P&G/Tremor).
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