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What Makes the Different Social Networks Tick?

There are two “full-service” social networks that I predominantly use: Facebook and LinkedIn. I belong to a Ning group as well, but don’t often check in there. I avoid MySpace the way I’d avoid a hipster rave…it’s just not me.

Over time, I’ve either read things about social networks or made my own assumptions about them:

Aside from this horse race aspect, there’s also the issue of what you want to get from a social network. This is an important consideration. Josh Catone at ReadWriteWeb has a post that asks, Should Employers Use Social Network Profiles in the Hiring Process? It’s a really good question. And I think one that is probably best answered this way: assume they will.

With these perspectives as background, I wanted to map several social networks to understand them a little more. Not so much the technical ins-and-outs (APIs, open social, openID, etc.). More in the sense of why people use the different networks.

I picked four: Facebook, MySpace, LinkedIn and Ning. They are all quite distinct in their approach and personality. The chart below is my map of the social networks’ strengths. Across the top, I’ve put six different types of social connections. The boxes below each column represent the relative strength of each network for that social interaction.

Social Networks Chart png

Here’s my breakdown of the four social networks.

Facebook

More than any other social network, Facebook wants to be The Social Utility. Like electricity or water, you just plug into Facebook, and it’s the place you go for all of your social interactions.

Facebook’s Ivy League-inspired ethos is a good one for being a wider destination of all your social interactions. Clean interfaces, heavy alumni basis and a relatively safe feel to it are key to its wide appeal. It works well for keeping up with friends, social acquaintances and friends from the past.

I think there’s a fundamental decision you have to make with Facebook. Do you intend to use it to keep up with people to whom you really have a connection? Or do you see it as essentially a communication venue?

I use it only for people with whom I have a relationship in the offline world. This is important for me. I use the Notes functionality to blog about my kids. Lord knows I don’t want everyone out on the Web to read those. So I keep my Facebook network quite limited. Others, like Robert Scoble and his 5,000 Facebook “friends”, seem less interested in the interaction and more interested in the one-way communication.

What makes Facebook great for friends is what makes it not good for business in my mind. There’s the personal and goofy stuff you do on Facebook. Blog about your kids, talk politics, post party pix, family pix, throw sheep, etc. I don’t think that stuff is what you want your business contacts to see.

Facebook has designs on moving into the business networking space. The recently introduced ability to create your own groups and use those groups for distributing updates helps this cause. But it seems like a lot of work to keep all these connections categorized and used correctly.

Facebook’s best social interaction: core lifestream stuff with people you’ve known for years.

MySpace

I remember the glowing, pre-Facebook stories about MySpace. Founded by musicians, it had hipster cred. Kids loved it. And the profiles can be customized a lot in terms of look and layout. True personalization.

What did all that give us? Tila Tequila.

OK, that was a cheap shot. But MySpace has become an impenetrable thicket of overdone profiles with…uh…interesting pix and teen age language. I surfed around over there, and I’m a stranger in a strange land.

Which begs a question. In the chart above, Facebook and MySpace share strengths in several social interactions. So don’t they compete? I’ll have to say not really. The demographics of the two networks are quite different.

If Facebook is Harvard, MySpace is the crowded hookup bar.

I haven’t heard MySpace tabbed as a competitor in the business networking space. Yeah, it’s a pretty safe bet that’s not gonna happen.

But I do want note the large number of specialized groups on MySpace. That’s a really nice aspect of the social network. Meet like-minded folks to discuss topics of interest.

MySpace’s best social interaction: sharing good times and opinions with friends, fellow travelers and hookups.

LinkedIn

LinkedIn is a dry, utilitarian social network. It feels slow, and you don’t get many interesting updates from your network. It’s full of business types. It includes business news on the home page. It’s kinda boring…

And it’s incredibly valuable.

As you get older and develop of a bunch of professional contacts, LinkedIn’s value becomes more apparent. I love to see when my former colleagues at Pay By Touch land new jobs. You can find people you’d like to meet, and work your connections via the “six degrees of separation” functionality of LinkedIn. I don’t have to worry about maintain emails for all my old contacts – I just fire messages through the platform. Employers use the network to find prospective employees. Job candidates can do research on the current and former employees of a company to which they’re applying.

I don’t look to LinkedIn to stay up-to-date on the lifestream events of my friends. I have no idea what my old friends from the past are up to via LinkedIn. The groups based on shared interests are only beginning on LinkedIn. I question how active they’ll really be. In professional interactions, people probably will have their “professional guard” up at all times.

LinkedIn’s best social interaction: reaching out to your network to prospect for a new job or employee.

Ning

Ning is a platform chock full of individual networks. Lots of them. Ning lets people create their own private networks, with much more control than what the other big networks offer.

This makes Ning an ideal place to set up social networks that revolve around a specific area of interest. On the Ning home page right now, featured networks include:

Ning works best for topics with members who are passionate about them. Hobbies, pastimes, specialized professions, politics. This is because these networks have a limited scope. Whereas Facebook and MySpace offer updates on a variety of activities for members, a Ning network is wholly dependent on its narrow scope of interest. Better have a lot of energy around that topic!

Arguably, a Facebook or MySpace group page can serve the function of Ning reasonably well. And specialized industry/hobby sites with good community boards are competition for Ning.

Ning’s best social interaction: discussion with people we’ve met online who ‘get’ our passion.

I’m @bhc3 on Twitter.

 

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Will Enterprise 2.0 Increase Web 2.0 Adoption?

On ReadWriteWeb, Josh Catone asks Is Facebook for Business Really Coming? The post is a good breakdown on how Facebook is growing in terms being useful for business. It touches on areas such as employees networking on Facebook, concerns about security around private content and groups, and inroad against LinkedIn.

The post is a good reference point for thinking about the effects of Web 2.0 in the enterprise. I’ve been out at the Gartner portals conference the past few days. Plenty of good analyst presentations and vendor updates. Expect to see more tagging, implicit activity integration, blogs, wikis, mashups, social networks, etc. Coming to a company near you!

As I listened to the presentations and talked with companies at our vendor booth, I came away with a strong impression that companies are looking at implementing Web 2.0 inside the enterprise. Yes, there are business cases to be built, but more companies are bringing Web 2.0 inside the firewall.

Assuming increased Web 2.0 usage inside companies, what are the outcomes? Of course, there are business improvements that will occur.

But, I think there’s another outcome from this increase. Web 2.0 tools will become more mainstream as employees are introduced to them in the enterprise.

Now, I want to make two points with regard to that statement. One is that “mainstream” is a relative term. In the U.S., there are 211 million Internet users. So one definition of mainstream could be say…50 million users. In the one quarter range. The other point is that plenty of great web sites can/will go mainstream without enterprise adoption. Nice thing about this Web, eh?

OK…with that out of the way…

This idea that companies lead the way for consumer adoption of technologies is not without precedent. Apple had the better PCs in the 1980s and 90s, but Microsoft’s operating system became the standard for the consumer market (Compaq, Dell, IBM). Why? Microsoft became the corporate standard, and employees bought the same technology when they got computers for the home.

As companies adopt Web 2.0 technologies, employee adoption is key to maximizing their benefit. As employees adopt the Web 2.0 technologies at the office, they become more familiar with them at home.

Let’s look at tagging. Del.icio.us has 3 million users. An impressive number, but only fraction of the 211 million Internet users. Many enterprise software companies are offering companies social tagging and bookmarking solutions. What happens once tagging becomes a regular part of the application stack inside the enterprise? People become comfortable with it. They ‘get’ why tagging has value (easy personal classification system, basis for discovering new content). They tag content inside their own companies. They click on tag clouds. They then come home, and want the same tagging experience.

How about RSS? RSS is a terrific way to easily stay up to date on new website content. But how many of those 211 million Internet users actually have an RSS reader of some type? Google Reader, FeedBurner, Firefox subscriptions, etc. Not that many yet. But RSS is going to be more pervasive in companies. Heck, you can even add it to Microsoft Outlook. What happens when people get used to staying updated via RSS feeds at work? They ‘get’ it. And when they get home, they’re stuck with email and their bookmarked websites. Until they realize they can enjoy the benefits of RSS on their computers.

You’re also going to see social networking introduced in the enterprise. Big as Facebook and MySpace are, the majority of Internet users do not have accounts on these services. Once employees are automatically enrolled into their companies’ social networks, they’ll start playing with them and begin to ‘get’ the value if being connected in this way. Maybe they had held off on social networks before (that’s for the kids). But after their work experience, what happens when they get home and want to keep up in a similar fashion with family and friends?

Companies need to be on top of the technology trends to stay competitive. This happens regardless of whether employees are itching for the change (how many employees were demanding groupware?). As companies roll out Enterprise 2.0, how long will it be before employee adoption makes Web 2.0 applications mainstream?

Improving Search and Discovery: My Explicit Is Your Implicit

Two recent posts on the implicit web provide two different takes. They provide good context for the implicit web.Richard MacManus of ReadWriteWeb asks, Aggregate Knowledge’s Content Discovery – How Good is it, Really? Aggregate Knowledge runs a large-scale wisdom of crowds application, suggesting content for readers of a given article based on what others also viewed. For instance, on the Business Week site, you might be reading an article about the Apple iPod. Next to the article are the articles that readers of the Apple iPod article also viewed. MacManus finds the Aggregate Knowledge recommendations to be not very relevant. The recommended articles had no relationship to Apple or the iPod.

Over at CenterNetworks, Allen Stern writes that Toluu Helps You Like What Your Friends Like. Toluu lets you import your RSS feeds and friends who have also uploaded their RSS feeds. It applies some secret sauce to analyze your friends’ feeds and create recommendations for you. Stern finds the service a bit boring, as all the recommendations based on his friends’ feeds were the same.

In the case of Aggregate Knowledge, the recommendations were based on too wide a pipe. The implicit actions – clicks by everybody – led to irrelevant results because you essentially the most popular items. In the case Toluu, the recommendations were based on too narrow a pipe. The common perspectives of like-minded friends meant the recommendations were too homogeneous.

Both of these companies leverage the activities of others to deliver recommendations. The actions of others are the implicit activities used to improve search and discovery. A great, familiar example of applying implicit activities is Google search. Google analyzes links among websites and clicks in response to search results. Those links and clicks are the implicit actions that fuel its search relevance.

Which leads to an important consideration about implicit activities. You need a lot of explicit activity to have implicit activity.

Huh?

That’s right. Implicit activities don’t exist in a vacuum. They start life as the explicit actions of somebody. This is a point that Harvard’s Andrew McAfee makes in a recent post.

Let’s take this thought a step further. Not all explicit actions are created equal. There are those that occur “in-the-flow” and those that occur “above-the-flow”, a smart concept described by Michael Idinopulos. In-the-flow are those actions that are part of the normal course of consumer activities, while above-the-flow takes an extra step by the user. A couple examples describe this further:

  • In-the-flow: clicks, purchases, bookmarks
  • Above-the-flow: tags, links, import of friends

Above-the-flow actions are hard to elicit from consumers. There needs to be something in it for them. Websites that require a majority of above-the-flow actions will find themselves challenged to grow quickly. They better have something really good to offer (such as Amazon.com’s purchase experience). Otherwise, the website should be able to survive on the participation of just a few users to provide value to the majority (e.g. YouTube).

So with all that in mind, let’s look at a few companies with actual or potential uses of the explicit-implicit duality:

Google Search

In an interview with VentureBeat, Google VP Marissa Mayer talks about two different forms of social search:

  1. Users label search results and share labels with friends. This labeling becomes the implicit activity that helps improve search results for others. This model is way too above-the-flow. Labeling? Sharing with friends? After experimenting with this, Mayer states that “overall the annotation model needs to evolve.” Not surprising.
  2. Google looks at your in-the-flow activity of emailing friends (via Gmail). It then marries the search histories of your most frequent email contacts to subtly alter the search result rankings. All of this implicit activity is derived from in-the-flow activities. For searches on specific topics, the more narrow implicit activity pipe of just your Gmail contacts is an interesting idea.

ThisNext

ThisNext is a platform for users to build out their own product recommendations. They find products on the web, grab an image, and rate and write about the product. Power users emerge as style mavens. The site is open to non-members for searching and browsing of products.

ThisNext probably relies a bit too heavily on above-the-flow activities. It takes a lot of work to find products, add them to your list of products and provide reviews. It also suffers from being a bit too wide a pipe in that there’s a lot of people whose recommendations I wouldn’t trust. How do I know who to trust on ThisNext?

Amazon Grapevine

Amazon, on the other hand, has a leg up in this sort of model. First, its recommendations are built on a high level of in-the-flow activities – users purchasing things they need. This is the “people who bought this also bought that” recommendation model. Rather than depend on the product whims of individuals, it uses good ol’ sales numbers (plus some secret sauce as well) for recommendations. This is a form of collaborative filtering.

Amazon Grapevine is a way of setting the pipe for implicit activities. The explicit activity is the review or rating. These activities are fed to your friends on Facebook. One possibility for Amazon down the road is to use the built-up reviews and ratings of your friends to influence the recommendations it provides on its website. Such a model would require some above-the-flow actions – add the Grapevine application, maintain your account and connections on Facebook. But these aren’t that onerous; the Facebook social network continues to be an explicit activity that has high value for individuals.

Yahoo Search

Yahoo bought the bookmarking and tag service del.icio.us back in 2005. It’s hard to know what, if anything, they’ve done with that service. But one intriguing possibility was hinted at in this TechCrunch post. The del.icio.us activity associated with a given web page is integrated into the search results. Yahoo search results would be ranked not just on links and previous clicks, but also on the number of times the web page had been bookmarked on del.icio.us. And, the tags associated to the website would be displayed, giving additional context to the site and enabling a user to click on the tags to see what other sites share similar characteristics.

This takes an above-the-flow activity performed by a relative few – bookmarking and tagging on del.icio.us – and turns it into implicit activity that helps a larger number of users. But with the Microsoft bid, who knows whether something like this could happen.

The use of implicit activity is a powerful basis to help users find content. Just don’t burden your users with too much of the wrong kind of explicit activity to get there. Two factors to consider in the use of implicit activity:

  1. How wide is the pipe of implicit activities?
  2. How much above-the-flow vs. in-the-flow activity is required?

Stick-To-It-Ness Pays: Rapt To Be Acquired by Microsoft

Rapt Inc. is being acquired by Microsoft, as reported over at TechCrunch by Erick Schonfeld. Rapt is an online ad optimization application, which fits Microsoft’s continued push into more and better advertising solutions. Rapt is also a great case of stick-to-it-ness. By that, I mean keep working at figuring what will make your business successful, and survive long enough to get there.

But let’s back up for a second. To greatly simplify things, one can say there are three types of outcomes for venture capital funded companies:

  • Supernova: legendary companies (Google, Microsoft, Amazon.com)
  • Moderate: cash flow positive (Rapt, SquareTrade, ebates)
  • Flameouts: bust (Pets.com, Webvan, Pay By Touch)

There’s plenty of press for supernovas and flameouts. But not so much for the moderate successes. The moderate successes represent a fairly broad range of outcomes. But they are an interesting study in starting a company, getting to profitability, and having the option what to do next. The three companies above – Rapt, SquareTrade, ebates – are each Web 1.0 holdovers who continue to be successes in today’s Web 2.0 world.

Rapt Inc.

Founded in 1998, Rapt started out life as some sort of procurement optimization provider for manufacturing companies. Here’s how their product Rapt Buy was described in 2001: Rapt Buy is a web-based application that gives companies real-time intelligence to optimize the procurement of strategic goods.

So the company was in the optimization game, but pretty far away from applying that to online advertising. But read what the company described itself as in that same 2001 press release: Rapt Inc. is a leading provider of software and services for enabling real-time, risk-optimized buying and selling decisions in complex business environments, and internet marketplaces.

Somewhere in there is the kernel of Rapt’s transformation from procurement of strategic goods to online ad optimization solution. I don’t know the success of Rapt’s original model, but they stuck with things and found a good market to apply their strengths. They came out with a series of products that enabled web media companies to optimize ad inventories. A March 2005 press release talks about Rapt being used by MSN to improve pricing for online ads. Subsequent client wins included iVillage, Yahoo, Tacoda, CNET and others.

Rapt did raise $55mm, so it needed a lot of capital to get where it is today. But by persevering through different markets and products, Rapt won many marquee clients and an acquisition offer from Microsoft.

SquareTrade

SquareTrade was started in 1999. Its original purpose was to be a mediator for disputes among buyers and sellers on eBay. The company received $9 million in VC funding back in 2000, and it hasn’t taken anymore since then.

The mediation services clearly paid the bills early on. SquareTrade also offers an eBay Seal, which tells potential buyers that a merchant has been reviewed and approved according to SquareTrade’s standards. Again, a nice little money maker for SquareTrade.

The absence of any new VC funding since 2000 tells you that the company is cash flow positive. Which is a nice place to be for SquareTrade. The company could live off the success of its model and dividend out the excess cash to investors and other shareholders. That’s something a lot of traditional, offline companies have done for years.

But you could view that cash flow in a different way. Your own source of “VC money”. Figure out new business lines, and self-fund their rollout. Forget the VCs. What a great option to have.

And that’s exactly what SquareTrade is doing. They’re trying to establish themselves as the largest independent warrany provider. Basically, sell the SquareTrade brand for warranties. I don’t know how they’ll do, but their established cash flow is going to give them the chance to stick-it-out and make a run of it.

ebates

ebates was established in 1998 by San Mateo County prosecutors. Huh? Well, what they created has lasted for quite a while. ebates gives consumers cash back on their purchases with 800+ online retailers. Basically, you just launch your shopping trip via ebates.com, and your purchase info will automatically be captured and your rebate calculated.

It was cool idea in 1998, and this is essentially the same thing ebates does today. Something like 1 million consumers are active on the ebates site. The company raised a $25 million round in 2000, and nothing else since then.

ebates is in a similar position to SquareTrade. Cash flow positive, and able to try new things. So far, ebates seems to be sticking with its 1998 model. More execution around its core model: more retailers, more consumers. Perhaps there’s something big brewing over there. But maybe not – they just enjoy the cash.

In Conclusion

The tech superstars garner the most press and certainly have the largest influence on the tech and business landscape. But the next level down, the cash flow positive moderate successes, do have some interesting things going on. Some keep hustling to position themselves for the next big thing, others enjoy the fruits of past labors.

Keep an eye on them, their cash flow gives them options.

Farewell, Pay By Touch, Farewell

Pay By Touch has come to the end of the road. In a press release issued today, the company said it was ceasing all remaining biometric operations:

Solidus Networks, Inc., DBA Pay By Touch, regretfully announced today that it will no longer process biometric transactions on behalf of its merchant customers and consumer membership base, as of 11:59:59 pm March 19, 2008.

 

Alas, this is no surprise. The company was overextended, and bankruptcy is a terrible position for a start-up trying to right the ship. The employees and new management brought in gave it a valiant effort.

A few post-mortem observations about the company are in order.

Consumer Adoption of Biometrics

It’s tempting to consider biometrics a loser in the consumer space. Ben Worthen at the Wall Street Journal does a nice job talking about biometrics’ value as well as its shortcomings. Biometrics is very sci-fi. And yes, it is too spooky for a large percentage of people. Inside Pay By Touch, we found there were two types of people who wouldn’t sign up: those who were concerned about privacy, and those who were against it on religious grounds (mark of the beast). If you follow Crossing the Chasm theory, there was also the mainstream part of population that would wait to adopt.

But there were early adopters. Pay By Touch processed several hundred thousand biometric transactions per month. Now in the grand scheme of things, those numbers pale in comparison to the volumes processed by Visa, MasterCard, American Express and the overall number of transactions occurring at grocery stores. But processing several million transactions over the course of the year is nothing to sneeze at. It shows that consumers were indeed willing to use biometrics for adoption.

I do think the adoption curve for biometrics is longer than for, say Twitter or RFID-enabled credit cards.

Economics of Biometrics

Biometrics requires both hardware and software. The hardware is pricey, and it does need to be replaced periodically. One thing about the field is that vendors continually innovate. Hardware gets more durable and reliable, and prices do come down. I had the chance to test different vendors’ new biometric readers. A lot of effort is being put into biometrics out there. I remember one of my favorites during testing was actually from Casio. It performed well, and brought back childhood memories of my wristwatches.

But the cost of installing and replacing the biometric readers is an issue.

Installing in the grocery lanes also took money. Each lane in each store had to be outfitted. Pay By Touch had to be ready for the different POS versions the stores were running: IBM, NCR or Retalix. Always with some different configuration or customization.

Pay By Touch’s biggest play for grocers was shifting consumers to ACH. ACH is much cheaper than PIN debit, signature debit or credit cards. So, of course, Pay By Touch couldn’t charge too much per transaction. This meant that operational costs needed to be kept low, the company kept small and lean. This didn’t happen, of course.

Level of Certainty in Authentication

Pay By Touch was very focused on a high degree of confidence in its authentication of each consumer, each transaction. There are two measures for how the biometric authentication performed: false rejects and false accepts. False rejects were cases where the consumer was legitimately trying to authenticate, but the system rejected him. False accepts were cases where the system wrongly identified a consumer as someone else.

The company’s bias was to avoid false accepts. One false accept could become a major news story undermining confidence of consumers in using Pay By Touch. And the system was quite good at avoiding false accepts.

The focus on avoiding misidentification meant that false rejects ran higher. False rejects were more acceptable – no one’s checking account would be wrongly debited. Early on, the company had a bad problem with false rejects. But a lot of work reduced that number significantly to a barely noticeable level. And that was important. Too many false rejects also undermine consumers’ confidence in the system: “Oh that fingerprint payment system never works.”

A lot of time was spent improving biometric authentication at the in-store hardware level, in-store software level and the hosted server level.

What Would Have Been Better for Pay By Touch

Hindsight is always 20/20. But it’s clear the gobs of money raised and multiple business lines hurt the company. Pay By Touch really needed to be run as a small company for a while. Keep the focus simple – ACH payments in multi-lane grocery stores. The company would have run in the red for a while, and needed infusions of funding. But it would have time to work through the operational levers and to bring costs down. Work in concert with the grocers to shift consumers toward ACH usage (e.g. better product discounts for ACH users; higher discounts funded through CPGs’ trade promotion dollars).

Expansion into other areas would come after prudent consideration of what was needed to succeed. One good, but admittedly tough example: provide grocers with lower credit card interchange for biometrics than for mag strip cards due to lower loss from fraud.

Also, this is a company that really could have used the guidance of a traditional VC firm. The hedge fund investors ultimately were little more than silent money. Still not sure why hedge funds parked money in an illiquid, high risk start-up.

It’s Over

So now the remaining Pay By Touch employees are left to find new jobs. Creditors won’t see much of what they’re owed. Merchants have to tear all that hardware and software out of their stores.

But Pay By Touch’s acquired division S&H Solutions will carry on (independently or as part of some other company). It’s got a strong loyalty marketing business and some momentum from SmartShop implementations. And the biometric check cashing business, formerly Biopay, lives on as Phoenix Check Cashing. Good luck Jon Dorsey.

And someday, some start-up might try to do mainstream consumer biometrics again.

I’m @bhc3 on Twitter.

FriendFeed Will Make Switching Social Networks Easier

There has been quite a lot of coverage for the FriendFeed service. FriendFeed aggregates updates from a variety of other social networks and Web 2.0 apps, such as Twitter, Flickr, Jaiku, LinkedIn, YouTube, etc. TechCrunch’s Michael Arrington reports that FriendFeed just added a search capability, making it “suddenly feel like a destination site”. The service is growing and improving.

Aside from aggregating your feeds, you can subscribe to the aggregated feeds of others. You “friend” others the same way to do with Twitter. Just subscribe to their FriendFeed. They don’t approve your subscription, you just do it. FriendFeed is essentially a social network in its own right, allowing users to post comments and share feeds amongst friends.

Which got to me thinking…the emergence of FriendFeed and other “networks of social networks” is going to make switching services a lot easier for individuals. And that’s going to make life harder for the social networks.

Here’s what I mean. I signed up for FriendFeed. I added several other services to which I belong: Twitter, Google Reader, LinkedIn, Pandora and del.icio.us. Suddenly, I see my updates all in one place. That, by itself, is pretty cool.

I then subscribed to the FriendFeeds of others. Robert Scoble is an active FriendFeed guy, by virtue of his involvement in every other social network and Web 2.0 service out there. It’s pretty interesting to see what he’s up to and what he’s commenting on.

Then I notice something. I’m seeing Scoble’s Jaiku updates (Jaiku is a competitor to Twitter).

Jaiku? I don’t belong to Jaiku!

And this is how these social network aggregators are going to change things. On Twitter, I can subscribe to others’ Twitter posts. For example, I subscribe to Scoble’s Twitter updates. But to subscribe to Scoble’s Twitter updates, you need to join Twitter. Through FriendFeed, that’s no longer the case. You can follow anything Scoble puts up on his FriendFeed: Twitter, Jaiku, Pownce, and others.

So here’s how this unfolds. You and your friends join FriendFeed. You’re all on Twitter. You love the ease and carefree way you can post updates to Twitter. Your friends on Twitter see your updates, either on Twitter or on FriendFeed. But after a while, you decide the features of Jaiku are even better – you make the switch to Jaiku.

Normally, the switch to Jaiku from Twitter would be disruptive. Your Twitter-using friends no longer see your updates, and you can no longer see theirs. The pain of this disruption is a form of lock-in, as the value of switching does not equal the costs of doing so (see In Praise of Inertia: MyYahoo #1 for more discussion on this topic).

But with FriendFeed, the cost of switching social networks nears zero. Whether I post updates on Twitter, Jaiku, Pownce or Google Talk, my friends will see them on FriendFeed. There is a loss of the the ability to talk back to your friends directly on their different service, but FriendFeed lets you post comments on any update of your friends.

This is great for the individual, expanding the choices for different services. And it puts more pressure on social network and web service apps to continually improve their features and user experience. Otherwise, users will easily switch to a better service.

Lookout social networks and web services – the lifestream aggregators are coming.

UPDATE: Sarah Perez of ReadWriteWeb has a March 20, 2008 post up entitled “The Conversation Has Left the Blogosphere“.  In it, she observes that blog comments may ultimately migrate to lifestream aggregators, such as FriendFeed.  This thought is another variation on the idea that the lifestream cloud becomes the community, replacing the apps-based communities we know today.

Facebook Beacon Is Dead. Long Live Amazon Grapevine.

Amazon has just come out with two new Facebook apps, as reported by Erick Schonfeld on TechCrunch. One is Amazon Giver, which lets friends share wish lists. The other is Amazon Grapevine, which lets you broadcast your activities on Amazon back to the Facebook newsfeed.

Pardon me…but isn’t that the basis of Facebook Beacon? Well, sort of. There are a few differences.

Amazon made this completely opt-in, which differs from the opt-out philosophy of Beacon. Also, product purchases are not included in Grapevine, but they were an important part of Beacon.

Personally, Beacon doesn’t bother me that much. I did not experience the early versions of Beacon with the too-fast notice that popped up on e-tailers’ sites. No accidentally revealing an engagement ring purchase. But there are times a purchase says something about you.

In fact, I think the idea of sharing your purchases with your friends has a lot of interesting potential. I can think of three different reasons people would share purchase information with friends and check out what their friends have purchased:

  1. Self-expression
  2. Product discovery
  3. Friends’ reviews

I’ve mapped those reasons to several different retail sectors.

  • Apparel = self-expression
  • Computer Hardware/Software = friends’ reviews
  • Consumer Electronics = friends’ reviews, self-expression
  • Home & Garden = self-expression, friends’ reviews
  • Sporting Goods = self-expression, friends’ reviews
  • Baby Products = product discovery, friends’ reviews

For instance, I think broadcasting your Apparel purchases is more a form of self-expression. People’s fashion tastes are an extension of themselves. Participation in some sort of Beacon-like program for Consumer Electronics, on the other hand, would be a chance to provide reviews to friends and read the reviews of your friends. And Baby Products would have a lot of discovery and reviews. See what your friends have purchased for their infants. Anyone who is a first-time parent knows the challenges of figuring out what to buy.

But, Beacon is still controversial, and Amazon doesn’t go as far as broadcasting purchases. So for now, we broadcast our ratings and reviews. This is pretty good. I can learn a lot from that.

The only problem is, the opportunities to share this way are still quite limited. Not too many e-tailers are doing this yet. However, Amazon has a rich history of driving innovation in e-tail. It was the early leader in e-tail. It was among the first to set up an affiliate program (Amazon Associates). It pioneered product recommendations.

So now it’s experimenting with the sharing of product-related information on social networks. Probably won’t be long before other e-tailers get on board.

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