The Social Networking Bubble Gets A Bit More Hot Air

from the but-when-will-it-burst? dept

So, I was one of the many people crammed into the Stanford classroom last night to hear the well-hyped panel discussion on whether or not there was really a business model for this new social networking craze. I thought it was a pretty good panel, overall, in the sense that it was entertaining. It certainly didn't answer the posed question (at all), but did make "public" the not at all secret rumor that Friendster took in a bunch of money from KP and Benchmark. CBS Marketwatch has written up a dreadful summary of the panel where things that were clearly said in jest were taken seriously. The article also ignored the healthy skepticism on the panel from both Cynthia Typaldos and Andrew Anker (who called the whole space a bubblet instead of a bubble) and who jokingly denied his skepticism as a way to encourage all the other VCs present to go throw their money away on social networking companies. In fact, the Marketwatch write-up takes one of Anker's quotes out of context to suggest that he thinks it's a big space. Ross Mayfield didn't get much time to speak on the panel, but gives his thoughts on the panel. He's a big supporter of the space and seems to think that the panel did say there was a business model. I didn't hear that. I heard that there were some investors who might be investing. However, we shouldn't get confused (as many did in the bubble years) and start thinking that venture funding is revenue again. Meanwhile, I never got a chance to ask my question about whether some of these "explicit social networking" systems can actually cause harm to real social connections. While both Friendster and LinkedIn claim that since you approve your connections, you guarantee that they're people you "endorse". However, that makes it sound like a binary decision. If they're in your network, you endorse them. That's not true. Let's say I want to contact a hotshot at a big company, and see that he's connected to a friend of mine. What if (a) that friend is getting so many requests to have people introduce him to the hotshot and (b) he thinks that introducing me to that hotshot will harm his relationship with that hotshot. Instead, he's now harmed his relationship with me, because now I know, explicitly, that he doesn't want to introduce me to someone. Sometimes things are better left unstated, and some of these social networks are going to discover these problems as they expand. Already, I've heard of people trying to figure out what to do about people they don't like adding them to their Friendster network. You don't want to turn down people and insult them, but each of those connections makes the whole thing less valuable.

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  1. identicon
    jay, 1 Nov 2003 @ 1:04pm

    Soon to be, the newest SocialTree

    The questions you raised will be answered in the world's newest online social network. will be introuduced to the world in the next few months that will answer many of the haunting questions of social software discussions that are buzzing right now. One of the most commonly asked questions has to do with the business model, or lack thereof. The model cannot be revealed for obvious reasons, but the model does exist. I'm sure with the new addition of Friendster's "corporate friends", they will be the first to let the cat out of the bag about the business plan and model of the social networking websites. Keep your eyes and ears, and most importantly your mind open as this new trend unfolds over the next year!

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