Morning Musings

A few things I came across in my morning browse:

First, there's the news that Adobe is refining its web and mobile strategy. I remember the days when Photoshop was like that cheerleader in high school: enticing, even intoxicating, but ultimately out of my reach. I loved the power and the features, but I never needed them enough to pay upwards of $600. Now, though, with Photoshop Express, I feel like I can finally hang out with the cool kids. Adobe has been a reluctant convert to the idea of web services, but they are finally (painfully?) making the move, and they're making some good decisions. "Automatically sync photos from desktop to Web to phone and back again"? Amen, brother -- that's added value, and along the way they're likely to enjoy the community love that comes when editing your photos, uploading them, and sharing them with friends are all part of the same, seamless process.

Contrast that with Microsoft, which is still shuffling its feet by the side of the pool, worrying that the web services water will prove too cold. Office Live never made a lick of sense as a branding concept unless it was an online version of the Office suite of products, and it's still not there. Touted as a "feature" is the ability to upload Office documents and then download them for use within the Office products you already own. Cool ... except that it's not any more cool than any other online storage option (including the decidedly un-sexy but more convenient alternative of simply mailing your documents to yourself as an email attachment). Of course we all know that Microsoft is terrified that the web will cannibalize its software sales, but when Adobe by comparison looks like a forward-thinking, innovative company, you've got a problem.

Second, the social networking wars are in full force; Facebook announced that it passed the 100 million user mark on the same day that news came out that MySpace might work with Amazon (or Apple, or Rhapsody) on its revamped online music service. Music is really MySpace's killer app; Facebook has the worldwide numbers, while MySpace's growth is mostly flat, but in terms of sheer US users, MySpace is still king and the main reason is music. Bands have pages on MySpace, and streaming music is already distributed throughout the site. Facebook simply has nothing to compare in that space, and if MySpace can get music retailing right, it could provide a very healthy revenue stream for a very long time.

Will Social Networks Ever Make Money?

This morning I came across a two-part article on Technology Review:

http://www.technologyreview.com/Biztech/20978/?nlid=1163
http://www.technologyreview.com/Biztech/20979/?nlid=1166

It's an interesting piece that focuses on the disparity between all the attention and venture capital focused on social networks, and the uncomfortable truth that (to date) no one has developed a business model to turn a profit on those networks. Definitely worth a read.

The crux of the problem is that advertising simply doesn't suit a social network audience. Google ads are profitable because people often search Google for a product they're interested in. They go there with the specific intention of learning more about Product X, so when ads pop up for Product X, they're more than happy to click on them. The situation is completely different for social networks, though. No one goes to Facebook to buy a television, and they're not on MySpace to do anything other than connect with friends and maybe cruise through a few random pages. Ads in that context are an intrusion, and marketers are only going to make it worse. Consider this ominous quote:

"The trouble," says Goldstein, "is we're putting ads up in front of users, where they can ignore them. We've got to get them between users."

Yes, good thinking -- put your ads between users, thereby effectively blocking the one activity that they come to social networks in order to pursue. I couldn't think of a better or faster way to shut a social network down than to force its members to click through an ad every time they want to make a social connection.

There may be no solution to this problem. Certain human activities are simply not connected closely enough with a purchasing decision for the activity to be monetized. This, of course, could pose a very serious problem for online communities that need to find some way to offset the cost of their bandwidth, servers, and company payroll. One possibility is to charge a subscription fee, but very few sites that throw up a pay wall will attract enough members to make their community experience worthwhile. Another possibility is to take a lesson from the music industry and try to think of ways that free content in one space can attract money somewhere else. Are you more likely to buy a used car from someone on a social network who's listed as a friend of a friend (of a friend)? If so, maybe a Craigslist tie-in is the way to go. Most fruitful are likely to be products or offerings that improve the social experience itself -- greeting cards, for instance, or gifts.

There are reasons for optimism. I don't read magazines or watch television because I'm looking for something to buy, but advertisers have long seen value in placing ads in those media. Perhaps social networks are simply too young, and the money will come later. Still, it's a tricky scenario that likely will not be solved anytime soon. When the next Internet bubble pops (in six months to a year, if the rumors I'm hearing turn out to be accurate), expect more than a few trendy social networks to be among the leading candidates to be this generation's Pets.com.

Verse the First

Web community: what is it?

At first blush, that's a simple question. After all, isn't the entire Web 2.0 experience supposed to be about community? The hot sites are social sites: MySpace, Facebook, even Google now that it's pushing its OpenSocial idea. The new web is about sharing, and sharing defines community, which is why YouTube traffic is growing while solitary experiences such as television-viewing are shrinking. Community is easy: just boot up a browser and take a look.

Except...what is community, anyway? When I think of community, I think of family and friends. The word has a connotations of intimacy for me. MySpace is more like being in a New York subway terminal: lots of people, lots of sound and color; it's exhilerating and alienating at the same time. I've spent more time randomly clicking through strangers' profiles on MySpace than I have actually connecting with someone who's part of my social circle. It's a very busy space populated by lots of people, but is it community?

Then there's the question of money. Facebook is hot; its traffic grows while MySpace's remains flat. It's been valued (in some quarters) at $50 billion. It's hard to get your head around that number, especially when you consider that Facebook has never once shown a profitable quarter. If Facebook is the most successful web community out there, what does it say that they still haven't figured out how to make any money?

This blog will concern itself with such questions. I don't have answers. I don't have readers or Twitter followers. I'm just one guy who's paid to foster online communities and who would like to do his job better. This blog will be the record of my explorations of web community in its many manifestations.

Welcome aboard.