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The Social Network Difference

Social networks know the first rule of the Web: personalization as a path to differentiation.

MySpace is wide open and popular with the high school kids and independent musicians. Facebook is for everybody now, but its early days drew the college crowd, and it's still mostly known for that. Friendster, meanwhile, is for the 20-something hipsters -- at least it seemed to start that way. Piczo is for little girls. And Multiply is a home for the soccer moms and dads eager to share photos from the latest reunions with near and distant family members.

It's safe to say, though, that they all perform the same functions. They host databases of users who have created profiles. Those users then map out how they're related to each other. And they communicate. So the trick for a social network to draw more users is to stand out with innovative features. As more social networking sites crowd into the sector, they all face the age-old question when deploying technology to hold their competitive edge: buy or build?

The difference, please?

Social networks have long been adding ways for their users to share videos, photos and music. Last year, Piczo, BeBo and hi-5 partnered with a company called VideoEgg to provide video editing, uploading and display tools for their users.

For Piczo, the partnership followed an earlier one with PhotoBucket. "This generation that's claiming the Web, they are very photo-, video- and music-driven. That's how they express themselves," Piczo CEO Jeremy Verba told internetnews.com.

But also last year, Facebook became the No. 1 photo-sharing site on the Web. MySpace partnered with Snocap in September to provide digital-music retail tools. And Multiply and Friendster released new versions with their own photo-, video- and music-sharing services.

Those types of services are popular with social-network users. But they aren't differentiators between sites. To borrow a manner of distinction delineated in Nicholas G. Carr's 2003 essay "IT Doesn't Matter," the technology behind media-sharing services has become infrastructure, rather than proprietary.

At least for all practical purposes. Some social-network executives, such as Multiply's Peter Pezaris, insist that their media-sharing technology is a differentiator. Multiply's version 3.0 features AJAX-based photo and video uploading tools, which Pezaris told internetnews.com are the best on the Internet.

"We do some neat tricks behind the scenes. Some of the things we're doing here are going to seem impossible from a Web developer's perspective," Pezaris said.

But executives running other social networks seem content to license white-label media-sharing platforms for their sites.

"There are whole companies that do nothing but serve photos. So to go do that on the side is kind of ridiculous," Friendster President Kent Lindstrom told internetnews.com. He said his company partnered with YouTube to help its users share videos.

So has Piczo. "We're not going to go create our own video-publishing solution," said Verba. "Why would we do that? Why would we try and create another YouTube when we can go and do a deal with YouTube?"

Nobody but Pezaris seemed to have an answer for that. In fact, Facebook and MySpace users share video with YouTube, too.

It's just the features, after all

So out goes media-sharing technology as any kind of differentiator between the social networks, right? At this point it's infrastructure. All the networks have to have it to do business. At least, according to everybody but Pezaris.

In Carr's essay, he wrote that "proprietary technologies can be the foundations for long-term strategic advantages, enabling companies to reap higher profits than their rivals."

So if they're not spending their time and money on building smoother media-sharing technologies, what are social networks doing to differentiate themselves?

"What we do and focus on really well is give you a way to connect with your friends. Invite friends, make friends and then keep in touch with what they're doing. Our expertise is all about how to make that better and more efficient," Friendster's Lindstrom said.

But while Lindstrom's company has the patents to back his claim -- Friendster was just awarded their third this month -- tools to invite friends, make friends and keep in touch aren't unique to Friendster.

In an end-of-year post on its official blog, Facebook released a more detailed list of those types of features it added in 2006. In January Facebook added Friend Details, where users could say how they knew their friends. In September, it introduced the News Feed and Mini Feed.

But somewhere along your way down the list, it hits you: wasn't Facebook well on its way to success before introducing any of these features? Hadn't they already somehow laid "foundations for long-term strategic advantages?" as Carr would put it.

What set them apart from their rivals so early on?

Maybe it has something to do with where we started. Facebook is known for how it draws the college kids. MySpace is wide open. Independent musicians love it.

The thing is that it's always been that way. Facebook started at Harvard as a "hot or not" clone. That got a pre-fab offline social network, a college class, paying enough attention so that when "thefacebook" came online a large enough crowd joined up and the site never lost momentum.

According to ex-MySpace CEO Brad Greenspan, MySpace membership started with a very long e-mail list.

MySpace was first part of a larger company then known as eUniverse, which owned a collection of sites and an e-mail list 3 million members long. At the launch of MySpace, they all got an invite in their inboxes.

In the end, social networks seem to differentiate themselves by the types of users they draw. Other than that, they're all more or less bumping along with the same technology.

One might be ahead for a bit, but the others will catch up as soon as they find a white-label partner willing to share revenue.

Each will be able to maintain their particular user base as long as they maintain their particular product: their user base.