Social Networks: The Internet Continues to Evolve

[Editor's Note: This is the second of a two-part series about social networks on the Internet. It discusses

The flurry of interest in personal online networking parallels what's been going on in the business and activist worlds. The real work in organizations, according to articles in two recent issues of Harvard Business Review, has already migrated from individuals to networks. Social networks are seen as keys not only to individual success, but to achieving organizational goals. To optimize their human "inventory," companies map employees' expertise and take advantage of their professional networks. Small wonder, then, that social network analysis is a growing academic field.

Several theories that inspire social networking are now hot topics:

Strength of Weak Ties (http://www.stanford.edu/ dept/soc/people/faculty/ granovetter/documents/The StrengthofWeakTies .pdf). This site advocates the power of looser connections in open networks to generate new ideas and success.

* Six Degrees of Separation (http://www.gladwell.corn/1999/ 1999_01_ll_a_weisberg.htm; http ://en. wikipedia. org/wiki/ Six_degrees_of_separation). These two sites claim that a person is only separated from any other person in the world by a chain of, on average, five people.

* The Long Tail (http://www .changethis.com/10.LongTail). This site affirms the feasibility of marketing niche products to tiny, distinct markets, provided storage and distribution costs are low.

The online application of these theories illustrates a counterintuitive quality of information that was pointed out decades ago by futurist Harlan Cleveland: Information gains in value when shared.

The Search Connection

Blogging brought useful technologies that allow ordinary users to share and distribute content as well as to slice and dice it in innovative ways to the Web. The new social networks enhance browsing and information management capabilities, creating self-selected audience communities and participants. They let users limit the Web's resources without sacrificing its open-endedness and serendipity.

By "learning" from the behavior of users and their affinity groups, San Francisco-based Eurekster, Inc. (http:// www.eurekster.com) uses "community driven search technologies" to rank search results by relevance to member communities and allows customers to share results and knowledge.

Florida-based Multiply, Inc. (http:// multiply.com) uses a different approach. It searches the Internet for content published by those in one circle and rates the relevance of hits by "degrees of separation" between publisher and searcher.

"Tags," such as those featured on the Technorati site (http://www.technorati .com) and to a certain extent social networks, generally help Internet users employ friends or colleagues whose judgment of resources and selection of friends they trust as filters.

The Profitability Challenge

Where is the money in all this? That is what venture capitalists are asking. So far, the answer isn't clear.

User fees have not been significant revenue streams for most social networks, although that might be changing. Linked-In, for example, now charges employers that list jobs on the site.

Since advertising is an increasingly important part of Internet revenues, a "business" benefit of social networks might be revenues earned by aggregating audiences for advertisers (in other words, adhering to older media revenue models).

Another route to profitability might be figuring out how to capitalize on a powerful marketing force-positive word of mouth.

Online networking is already being viewed as a benefit to print and online publications and conference planners. Check out the Web sites of forward-thinking organizations like Always On (http://www .alwayson-network.com), Red Herring (http://www.redherring.com), and The Push Institute (http://www.pushthefuture .org/PUSH_INSTITUTE.asp) for innovative ways to involve subscribers and conference attendees in building membership communities.

In their newly released book, The Virtual Handshake: Opening Doors and Closing Deals Online, David Teten and Scott Alien suggest that online networks can be an important business development tool for small and medium-sized companies.

Major Players Jump on the Bandwagon

Not wanting to be left behind while marginal players create yet another Internet trend, some major players are making key investments in social networks and are integrating networking approaches into existing services. For instance:

* Rupert Murdoch's News Corp. recently purchased Intermix Media, owner of networking newcomer MySpace.com, which is already the fifth mostpopular U.S. domain on the Internet.

* Yahoo!, which bought eGroups a few years ago, recently bought Flickr and has now launched Yahoo360 as "one place to keep the important people in your life connected to you" by sharing a blog, photos, recommendations, and more.

* Amazon, which has been pursuing a social network approach to marketing from its very inception, has invested in 43 Things.

* Monster Worldwide, the recruiting service, bought Tickle, a popular testing and matchmaking site.

The Ultimate Impacts

We can see where online social networking is taking us-toward greater specialization in content, localization, and interoperability with mobile devices (with the incorporation of their functions into major portals and search engines).

There are clear benefits for individual empowerment, new ways to collaborate, and tools for creating new communities based entrusted relationships. They can facilitate communications within small work groups and diminish the importance of traditional hierarchical channels in organizations.

From a societal perspective, social networks and their content can begin to incorporate the collective intelligence of additional people into an ever-expanding and more diverse Internet commons.

However, there is a disturbing aspect to this. Online social networks set up a new arena for the exercise of power-the ability to invite others into exclusive groups. These groups create new, somewhat problematic hierarchies and criteria for determining "haves" and "have nots," with the well-connected players on top of the ladder.

As we evaluate the broader impacts of this phenomenon, we should consider the thoughts of Harvard professor Robert Putnam, author of Bowling Alone ana Better Together. He distinguishes between social capital developed when "bonding" (associations that link us to people like ourselves) and "bridging" (associations that link us with people of diverse backgrounds and interests). In Putnam's view, the "bridging" type of networking is most important for a healthy society to flourish.

Clearly, it will take time to assess whether online networking becomes a force that meshes individuals into valuable communities or one that tends toward further societal fragmentation.

Certainly, the recent crop of social networking sites is moving the Internet along in its continuous quest to reinvent itself, perpetuating the permanent tension between commercial media forces that tend to want to organize the Internet on behalf of its users and savvy grassroots forces that want to use the Net as a forum for self-expression.

As one entrepreneur said: "We're turning the Web into a conversation."