RealTime IT News

Rethinking Social Networking

Mediabistro Media Circus

NEW YORK -- When the phrase "social networking" comes up, most people will reflexively think of Facebook and MySpace. They're the biggest, and they certainly get the most hype.

But, if anything, those are social networks in name only, according to Chris Anderson, editor-in-chief of Wired magazine.

In a keynote address here at the MediaBistro Circus media conference, Anderson argued that social networking is really about identifying with a community that is built around a specific topic, a "raison d'etre".

"'Community' is one of these words that we toss around all the time," Anderson said. "The problem with the social networking destinations like Facebook and MySpace is that they're not about anything -- they're about Facebook and MySpace."

Instead, smaller sites with a narrow focus are the more fertile grounds for successful social networking, Anderson argued.

He was referring to the Internet's "long tail," a term he coined in 2004 referring to the innumerable niche sites across the Web whose visitors tend to have a strong interest in a particular field of content.

Any site can include social networking features such as profile pages, blogs and the ability to upload and share photos or videos. But those features aren't enough to build a community, Anderson argued.

The successful social networking model will be built around a defined field of content, the more specific the better, Anderson said. He pointed to Ning, the new venture of Netscape founder Marc Andreessen, which helps people build a social network around niche topics.

So far, Ning has helped created more than 255,000 social networks on topics ranging from Mercedes Benz ownership to amateur unmanned aerial vehicles, a network that Anderson created around his favorite geek hobby.

Sites like these are made for social networking, Anderson argued, because they already have a band of dedicated faithful with a common interest.

The mega social networks, by contrast, are social in so far as they impel people to seek out strangers to amass giant networks in what Anderson called the "friending arms race."

"We need to take social networking out of Facebook and out of MySpace and bring it into our sites," Anderson said. Those environments, he said, would be about "content first, and social networking second."

Any vision of social networking these days is bound to encounter the question of monetization. Despite the tens of millions of people who have created profiles on MySpace and Facebook, those sites are still struggling to turn a profit.

[cob:Special_Report]The short answer to the monetization question is, of course, advertising. But as News Corp. CEO Rupert Murdoch quipped on his company's most recent earnings call, selling ads on social networks is hard.

As Anderson explained it, the problem is targeting. Because the membership of those sites is so varied, targeting ads effectively and in a way that respects users' privacy has so far been an unsolvable problem.

Whereas the typical CPM (cost per thousand impressions) for an ad on Facebook or MySpace might be around 20 cents to 30 cents, Anderson said that his own Ning-based DIY Drones site enjoys CPMs of around $7 through Google AdSense.

The reason? A smaller community formed around a specific interest means a more qualified audience. A typical MySpace ad might represent a comparatively generic product such as classmates.com or a real estate service.

But ads on Anderson's do-it-yourself drones site are selling things like accelerometers built on open source hardware. Definitely not for mass appeal.

Of course, the monetization paradox is that "the highest value is in the smallest sites." Niche sites will have more qualified audiences, so they will be able to sell more targeted ads at higher CPMs -- just fewer of them.

That paradox doesn't have an easy answer, but Anderson is adamant that the future of social networks lies in the granular sites built around a distinct purpose. While he was not ready to eulogize MySpace and Facebook, Anderson was sharply critical of their purpose, and seemed highly skeptical about their staying power.

"They're generic social networks," he said. "That is why they have been so difficult to monetize, and why they will see so much competition from niche social networks."