Users become more dependent on them for their central data storage.
[+] An ignored project of opening user profiles
A few days before the 512 earthquake in Sichuang, China, MySpace announced its plan of MySpace Data Availability, which was to open its users' profiles. A few days later, Facebook follow suit by launching Facebook Connect. The two companies, after the phase of opening their platforms for one year, have entered a new stage of open user profiles. Their plans were supposed to arouse extensive attention, yet they didn't draw too much attention of the press because it was overwhelmed by earthquake news.
What is open user profile? It is about allowing users the freedom to carry their social network profiles to other websites. One simple example: you can post your photo from your MySpace album on your Yahoo Messenger. Users are able to do so if Yahoo Messenger links to MySpace platform.
Such openness breaks the barriers between websites even further. As far as small- and medium-sized websites are concerned, open platform is about social network websites inviting them in to develop applications, while open user profile is about opening user profiles for them to do applications from the outside. The former is a centralized system with a social network website at its core, and the latter concerns exchange among websites on relatively equal terms.
What has been opened includes not only user registration data (e.g. names and addresses), blogs and photos but also users' friend lists - so that you can see if your MySpace friends log on the same website. Users can carry not only static data but also living relationships. The Internet has got to a point where the rules of the game have been constantly overwritten.
[+] Why open user profile?
Some people may think that these social network websites must have gone crazy to unconditionally open millions of their user profiles, and most important of all, the social network of users, they have accumulated for years. It is within users' discretion if they want their profiles open and to be accessed from other websites, yet should social network websites allow their users such an option that makes their user profiles available to other websites?
From the viewpoint of users, many of them have been fed up with filling personal registration data repeatedly. Web 2.0 websites in particular would ask you to provide loads of information of interests, hobbies and things, upload photos and most annoyingly, set up friend lists and invite your friends to join. Users may think: why can't I just use my MySpace friend list?
To streamline user registration process, small- and medium-sized Web 2.0 websites even encourage you to use the same ID you use to log on bigger websites. They, on one hand, access big social network websites' open platforms and develop small widgets to be embedded in big websites; on the other hand, they link to these social network websites' open profile plans so that users can carry their profiles with them.
It looks like small- and medium-sized Web 2.0 websites are getting more dependent on big social network websites. Indeed, the trend of opening up - both the platform and user profiles - has been pushing smaller Web 2.0 websites to lean on bigger social network websites. Smaller websites will find it harder to survive and get more attached to large social network websites which control the valuable and critical asset of user profiles.
[+] Demand for central storage of personal data
So, don't social network websites worry about small- and medium-sized websites stealing the data? Firstly, Westerners have high respect to users' privacy and it is a serious issue to access personal data without the owner's permission. Yet, even if the small- and medium-sized websites don't steal but just access and use the data normally, users may at the end turn to stick to them instead of the social network websites where they are from. Are these big websites not concerned?
The core of social network websites has been users' profiles and social relationships. Look at the illustration below that shows the four layers of the concept of social network websites. We can say that it is feasible for website operators to have third parties develop applications for them as long as they have good control of the core. As a matter of fact, users prefer to store their data in one single place, so social network websites will be taking up the role of data centers.
Imagine there is one place on the Internet where it is safe for you to store all your personal data. You can user your own discretion to access this data from other websites to save the effort to repeatedly fill in the same data, and when you move house, you only need to change your contact address once at this once place and the data at other websites will be automatically updated. Such convenience is beyond understanding in the Web 1.0 era.
No small- and medium-sized websites will be able to steal user profiles from big social network websites, and the significance of social network websites will not be reduced whatsoever. In fact, as social network websites are opening their user profiles to more other websites, their users become more dependent on them for their central data storage. The more you open, the better chance you have in the competition - this is the true meaning of online openness.
At the same time, what problems there will be when social network websites are becoming a personal data platform?
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Openness, where is it going to take us? (4) - 2008/11/30
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After open platform comes the matter of profit share.
It is predictable that the open platform would change the existing dynamics of the industry. For example, we have seen many third parties developing applications for the social network websites in China - 51.com and Xiaonei. They can of course do the same thing for bigger players like Baidou or qq.com if they decided to open their platforms. Yet, is it possible that 51.com and Xiaonei develop applications imbedded in Baidou and qq.com?
Moreover, what if 51.com and Xiaonei develop applications to be imbedded in each other's websites? In that case, which is the big brother, and which is the little one? The relationship will become so complicated that in the end there will surely be many tangible and intangible clauses and terms made to prevent competitors from cutting ground by using imbedded applications. However, as far as social network service providers are concerned, to what extent should they open their platforms?
Some social network websites make it clear in their contracts with third party developers that applications in specific areas (such as recruitment and travel services) are not to be opened because the big brothers want to do it themselves, now or later. These areas are not supposed to be touched by little ones. Such cherry picking mindset is rather paradoxical - can this be called open?
In fact, social network websites need not to be afraid of opening themselves, as long as they get a good hold of their core value. The internet was born to be open, and online service providers should embrace this reality. They should open themselves except for their core. Yet, eventually what is the core value of social network?
[+] Only the core that should not be opened
From the surface, the tangible products of social network services are blogs, photo upload, friend lists and so on. Yet we should know clearly that the value of social network underneath these products lies in two parts - data storage and social relationship. The former is users' tangible asset and the latter the intangible.
A social network website's user may store blog articles s/he has been working for threes years and photos for one year at the website. Guess if s/he would run away from that website? Many people see the glamorous part of social network service providers but hardly their efforts in providing basic data storage functions. To be a platform operator or a big brother in social network services, data storage is the basic work, which needs to be under full control.
In addition to basic data storage, the intangible asset of users' social relationship needs to be taken good care too. The key for social network services to become sticky and irresistible for users lies in interpersonal interaction, which allows users to know what their friends are doing online easily. As long as social network service operators have god hold of users' social relationship, they don't need to be afraid of opening up.
In other words, it is OK to have third parties to develop applications except in areas involved in basic data storage or in ways intended to steal or transfer user's social relationship. This can be compared with the opening up of state-owned enterprises. It takes thorough consideration to decide which parts are about basic applications that should not be opened and which parts can be opened in moderation.
[+] Five tasks for open platform
After open platform comes the issue of profit share. A social network website operator should help third-party developers revolve problems and earn profits in the following areas:
1) Promotion. A social network website operator should provide a mechanism through which new services or applications can promote themselves while those not favored by users can be naturally weeded out.
2) Advertising revenue. For instance, a website can work with Google Adsense, a popular online advertising solution to web publishers in China, and let third-party developers keep all of the advertising revenue they bring in instead of sharing with them.
3) User payment. Users may be willing to pay for applications such as games, and social network websites should provide a solution to help application developers with user payment.
For the points mentioned above, 51.com has taken the initiative to provide solutions. 51.com opens its virtual money API to third-party developers, and by working with the sales channel of prepaid game cards of the game developer, Giant, users can top up easily. This is an attractive advantage for developers.
4) Basic web hosting. For developers to start offering their services at a lower cost, provision of basic web hosting may be necessary.
5) Investment or acquisition opportunity. A good application can be a good potential investment target; especially if it can be applied in a number of various social network websites and accumulate a huge amount of users. By provide funding opportunities at the initial stage, the website operator can help a application developer to grow and reserve a good investment opportunity for the future.
Open platform unveils a new competition for users. Social network websites wish to grow bigger, but at the same time they are worried to lose their turf. The top priority is to know yourself well. Your best chance lies in opening up yourself to the outside but preserving your core, and for this you need a good profit share system. At the end, you may even need to open up your user data to others to ensure lasting growth.
Yet, why do social network websites need to open their user data which they have made every effort to gather?
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- Today in History
Openness, where is it going to take us? (3) - 2008/11/23
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Why open platform? The root cause is to address the problem of inactive users.
[+] open platforms for big brothers only
The idea of open platform is about a big website releasing its API and allowing others (individual users, small groups or small or medium-sized websites) to write programs in accordance with its API standards and embed the programs in this big website for its users. For website application developers, this mode can be called "follow the big brother."
Why open platforms? The fundamental reason is to solve the problem of inactive users. Social network services are driven by pressure of interpersonal relationships, so in the beginning users would feel compelled to log on the services. After a while, the pressure wanes and about two thirds of users would quiet down. One way to resolve this problem is continue to offer new applications. Yet it is too slow for a website operator to develop applications solely on its own, so it can only open its platform and let others join.
There are several key points in the definition of open platform mentioned in the first paragraph. Firstly, only the major players of the industry have the power to attract others to join. The open platforms of 51.com and Xiaonei.com, two independent social network websites in China, can only work well when they are turning into major players. Yet, keep in mind that the most powerful open platform would be that of Tencent (qq.com), a major Internet Instant Messenger Service provider in China, which can afford to wait for its best chance.
Why do companies follow the big brother instead of striving to be a big brother? This is because the market conditions three years ago could support a startup to grow into a big player. Now it has become difficult for startups - many of them can't even secure financing. Attaching to a major player for a chance to survive is straightforward thinking. Therefore we see a process of industry consolidation.
[+] Benefits for followers
Secondly, applications, after all, are for users of major websites. It is necessary to figure out what kind of applications major users would need. News for Sina, search for Baidu, C2C trade for Taobao, - major websites have their distinct product positioning. In a word, big websites of different types would have open platforms of different kinds; so small players must have different ways to work with them.
Social network services websites have no specific product positioning, which, however, give unlimited space for imagination. They are most powerful in spreading information. Although this type of websites offers specific functions such as blog, photo album, friend list and communities, their actual core product - relationships and networking - is relatively abstract. For applications to be successful, this core must be taken into close consideration.
Thirdly, followers must have benefits. The odds may be poor for a small developer to grow into a big brother, but at least it must be able to support itself. A big brother cannot make smaller developers keep working with it if it does not take care of them. Unless the big brother is the one and only player in the business, otherwise small developers can always turn to other big brothers.
Contrary to the real life, followers on the Internet enjoy certain freedom. They can join different camps at the same time. Developers certainly would like their applications to be used at many occasions without restrictions and make them good money. It would be a lot of trouble if one has to follow different rules (APIs) when joining different camps. Wouldn't it be a lot more convenient if all big brothers have the same set of rules?
[+] Battle for open standards
So we've seen the emergence of a standard that all big brothers are supposed to follow. This is the Open Social standard advocated by Google - a universal standard for open platform. If all big brothers abide by the standards, life would be a lot easier for small followers. They can join different camps freely, and someday they may even become big by being able to benefit from working with many big players.
This scenario is very much like vertical and horizontal alliances in the era of Warring States in China. Google's performance in social network services is only average. But if you look at the list of Open Social partners, you'll find that Google, with this alliance, looks like ready to contend with Facebook. However, what is Googls's intent to develop a standard for all to use, free of charge? What benefits, after all, will it be able to reap?
Overall, the core of Google is search. Google would wish that its Spider and Adsense could reach where there is traffic on the Internet. Nevertheless, social network services websites are very special - they have heavy traffic, yet they, particularly personal profiles, can only be access by logged-on users. Search engines have trouble indexing web pages of these services.
So Google has to open them up, and Open Social can be seen as a product of such thinking. Actually, baidu.com can take the same approach and come up with an open platform standard that suits Chinese social behaviors. It can encourage other social network services providers to adopt this standard, and independent players such as 51.com and xiaonei.com are very likely to join.
Why? Because for independent social network services providers, it would be too risky to rely on a third party standard and too inefficient to develop its own one. The solution then is to "compatibility with all standards." For them, the point is to attract more developers to come up with more applications to stimulate user activities. It does not matter which standards they choose.
In a standardized and transparent Internet world, what can website operators do to retain their users?
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Prev : Openness, where is it going to take us? (1)
- Today in History
Openness, where is it going to take us? (2) - 2008/11/16
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"To grow bigger" is an inevitable pressure rising from within.
[+] The Internet was born to be open.
The Internet was born to be open and free. Since the time when people established the underlying architecture of communications network, the Internet was endowed with the attributes of a decentralized architecture like its genes. Some negative impacts have come along, such as issues of online security and spams. Yet as such things are the consequences of the working of the Internet's genes, they are meant to subsist. For those Internet businesses that go against the Internet's innate characteristics, they would inevitably face tremendous pressure from competition.
Ten years ago, the Internet had posed a severe challenge to the conventional logic of business world – monopoly - , especially of the capital-intensive media industry. The Internet broke the structure and created an opening. An open Internet enabled more content partners to join. Free Internet services quickly drew in a large number of users. People running Internet companies were aware that only through opening up themselves could they continue to grow.
As the Internet follows the pattern of scale economy, inevitably, there is always an innate pressure for Internet businesses "to grow bigger." They need to quickly increase their user base and traffic to achieve a comparatively low marginal cost. One way to grow big fast is to offer free services; to open and embrace more partners is another. During the first decade of the Internet, these two methods seemed to work well.
Now we've seen a third method emerges with Web 2.0 - social network. The way social network works is similar to multi-level marketing. Spreading from one user's social network to another's and then many others', social network services quickly accumulate a huge amount of users. However, the pressure to grow bigger never wanes. Following the innate nature of the Internet - open and free - , renowned social network services providers have come up with solutions: an open platform and opening up users' profiles.
[+] No opening up, no monopoly
Doesn't it sound paradoxical? The only way to achieve a monopolistic position on the Internet is through opening up. In the conventional business world, businesses that survive fierce competition would build bulwarks to enclose its empire within and erect competition barriers. This is why we've seen the first-generation Internet companies, such as Yahoo!, developing into new monopolies. It seems that they have followed the same trajectory of history.
If its monopolistic advantage can last out, why would Yahoo! have Yahoo! Open Strategy? Why would a monopoly need to open itself up? The reason is new players keep coming on the stage, first Google, and later MySpace and Facebook. They have come with a new revolutionary power to rewrite the old business rules, and on the Internet, the revolution can happen at an astonishingly fast speed.
Openness is embedded in the genes of the Internet. It is difficult to monopolize the Internet marked with a decentralized architecture. Internet companies are constantly under pressure for growth, and putting up walls is not good for growing big because no Internet company, however powerful it may be, can monopolize the traffic on the Internet with its own websites - the majority of the traffic is always fall outside its own websites.
Moreover, new comers will exercise the power of openness to challenge the success of existing players. One of the most successful products of Google is the omnipresent Adsense, but Google has been threatened first by Facebook, which took the lead to open its platform, and later by MySpace, which was the first to open up users' profiles. They have unsettled both Yahoo! and Google. More openness leads to greater competition.
[+] Technological innovation is a key catalyst.
The first-generation Internet aggregates and opens up "content;" typical examples are portals like Yahoo!, and issues concerned around copyrights, trading of content and the transformation of patterns of mass communications. The second-generation Internet aggregates and opens up personal relationships; typical examples are social network websites like MySpace, and issues concerned around privacy, property rights of personal data and the transformation of patterns of interpersonal communications.
A key catalyst of all the changes is technological innovation, such as standardization of data exchange and standardization of applications interoperability. The former refers to the prevalence of document (e.g. XML) exchange standards and the later the sophistication of Web Service. The former enables users to insert content of one website to other websites; the latter allows users to embed a function module of one website to other websites.
10 years ago, when a portal wanted to use the content of a certain media company, both parties would need to go through a lengthy process of program development and docking. Now, website operators share their content in standard RSS format freely. When this becomes a common practice, the barriers to content exchange are instantly pulled down, and content may flow more rapidly on the Internet.
The concept of open platform, first raised by Facebook, is to allow applications of other websites to be embedded on Facebook. On the other hand, the idea to open users' profiles, first brought up by MySpace, is to enable users to embed their personal profiles onto other websites. The mode of the former is like "one-stop shopping"; the latter is more like "take out" - portable personal profile.
Furthermore, the idea, initiated long ago, to integrate various login ID's for different websites into a universal one, has been back to the talk again. The Internet world is sure to become more transparent with data flowing faster and content and functions among websites more integrated. It will affect the closer integration of industry chains, the decline of old business giants and the emergence of new ones, disputes over privacy issues and so on.
Openness is a path of no return, but where is it going to take us?
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- Today in History
Openness, where is it going to take us? (1) - 2008/11/09
The Web 2.0 Revolution (10) the Big Future of Web 3.0 - 2006/11/05
