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08.01.2011

Everything about Social Network Sites. Development Prospects [2/4]

Note: In the second part of my report I will tell you about the current trends in social network sites development and provide the forecasts for the nearest 3-5 years. In my previous report, which was published by me three years ago, I provided quite a definite forecast of the social network sites progress in the world, which turned real today for 80%, and we can really observe the ideas, described in previous publication.

1. Integration with Third-Party Sites and Application Software

is an important trend of the last 3 years. Last time I touched upon it quite superficially, at that time this practice has just started developing, today it takes an important position in social network sites development. Still, it’s only the beginning. A social network site is a huge community, thus it’s and a huge power. As everybody knows, there is no such thing as too much power. It means that social network sites will always strive for increasing their impact. One of the most important strategic tools to increase the impact is the integration with all possible third-party sites, apps and the outer world in general. The deeper the integration is, the more power the social network sites get. Therefore, this trend can be named among the top 5 trends for the nearest several years. This process can be divided into two global groups:

  • Integration with social networks
  • Providing social media functions.

The integration with outer social networks has rather entered our life. Millions of sites have firmly integrated with the most popular social network sites, and today almost all new projects are created with default integration. It can be standard linking to official communities of site followers in social networks, “Share” buttons, “Like” buttons, the integration of online stores for goods selling, special applications for working with networking sites, tools of commenting through social network sites and many others. The next step to make is the creation of specialized integration platforms, which will allow creating “social” ecosystem within the sites. This way, the users, logged in Facebook or VK, will be able to use any social network sites’ feature, being in fact on the third-party site. And vice versa: users will be able to get the required information from the third-party sites without quitting the social network. In turn, third-party sites gladly accept these integration tools, as they bring the additional inflow of visitors from networking sites that means extra income. Thus, drawing sites into the integration process, social network sites get the power concentrated in their hands.

At the same time, the companies realize the importance of arranging the communication between users within the site ecosystems, not letting them out and not entrusting this important process to the potential competitor. As social networks develop rapidly and users demand new content, the risk of social network’s creating the content close to a group of sites, which earlier integrated with a certain network, and thus a huge social network’s turning into a direct competitor for a smaller site or a whole segment is not excluded. The companies try creating useful social functional which will be a single whole with the site and will be able to attract new users. They often remake their sites into themed social networks and increase their popularity by many times.

Apart from the sites, currently, the desktop applications are socialized actively as well. The trend started from communication programs, messengers in particular, but it will gradually cover the other software as well (for instance, Microsoft corporation is actively integrating its Outlook program with social networks).

In the nearest future, the trend of socialization will intensify, and popular social network sites will increase their influence and control over the whole IT sphere. Out of date products, which are not socialized appropriately, will gradually lose their positions. Content will be created and distributed even faster thanks to the users of social networks.

2. Niche Social Networks Development.

As early as 5-7 years ago, social networks of general targeting, featuring personal and business communication, some certain type of content, general-type networks’ clones for local markets started developing. Following the general networks, themed projects, using the same mechanism of social networks but in a certain limited niche, began developing. This process started 3-5 years ago and now it has entered a very active stage. Today, one can find social networks for IT fellows, tourists, music admirers, photographers, sportsmen, avid readers, politicians, scientists, etc. Upon that, many of the world’s popular niches are still free, for example, there are no popular networks for car enthusiasts, real estate brokers, there are few networks for educational purposes and some other themes. Almost all themed projects have got global level without being oriented for a certain country. Currently, the stage of global projects creation is ending and creation of themed networks in local markets is starting. Most commonly these are the clones of existing popular projects to one extent or another. In the nearest 3-5 years the quantitative saturation of the market with themed projects will finish and the progress of the qualitative constituent will begin. Basically, these projects follow the progress history of general themed networks, being in abundance and starting competing mainly on the qualitative level.

Today, the users do not want to get editorial content, being created and selected by someone without their opinion being taken into account, they want to control the process and take a direct part in it. Precisely for this reason, we will see the creation of one or several themed social networks almost in each more or less significant theme, which will attract the considerable part of users among the targeted audience to themselves. Upon that, these communities will be based on the mixture of themed content and users’ communication, and auxiliary services in the sphere of commerce, geolocation, integration with the companies from related fields and others will be made a considerable feature as well. Fitting in is the easiest for the sites, already enjoying significant popularity, they only have to transform appropriately and to add social functional. This trend may create indirect competition between general networks and themed communities that, in its turn, may most probably result in the integration of such projects. The list of the most popular social networks is available on Wikipedia:
http://en.wikipedia.org/wiki/List_of_social_networking_websites

A particular branch of the progress will be the closed social networks of large organizations, which can also be regarded as themed networks, such as the ones of commercial corporations, state organizations, political parties, etc. In such organizations it is very important to set up efficient communication between its members from different countries and cities, to get the necessary information over, and to increase the operating performance. This trend has just started developing and so far has been captured mainly by the largest companies, leaders that are starting implementing these technologies and, thus, gaining good competitive advantages.

3. Technological Progress.

Today, social networks are on the drift of great popularity, growing more and more each day. Social networks have been progressing mainly in quantitative way, covering more and more users, while today social networks are entering the stage of qualitative development, inventing ever new tools of user interaction. Therefore, in the nearest 3-5 years, the technological progress will become a compulsory condition for surviving in competitive environment. The progress of technologies will be diversified, but a number of key trends can be already marked out.

Communication Tools

Communication is fundamental of any social network; therefore, communication tools are to be developed first of all. This process has been progressing continuously since the moment the first social networks were created. Today, many leading networks start drawing real life communication into their portals (for example, Facebook Company has recently declared its introducing email technology, it also laid claim to Skype Company in mid-2011). In the nearest future, one can expect the introduction of all known types of communication within projects of such type that will allow communicating with any person of the world in a single place.

Content Generation

At present, social networks work on the principle of “User-Generated Content”, i.e. a social network provides the required tools and people generate new content using the ones. The model works pretty well, but there are few tools of professional content creation so far while users in the modern information age want to get more and more diversified, high-quality content. Earlier, social networks mainly tried to structure users’ content, later they started creating tools of content filtration, and in the nearest future one can expect the new level functional for generation and selection of content as well as the integration with content-providers. The sites, combining social functional and high-quality themed content, are very encouraging.

The opportunity of integration is already available for content-providers, but not many of them use it though. Apart from standard widgets, the creation of special applications through API networks is also very profitable. The mechanism of integrating through applications is not very user-friendly so far: users have to enter the application to get the information required; in the future, one can expect the conversion of social networks into platforms, on which various applications, including the ones available from content-providers, will develop.

At the same time, social networks benefit from creating content within the frames of the network – either the social networks itself or users, or both, that will allow them controlling and managing the process totally; therefore, the new mechanisms of content generation and integration will occur. In light of this, web 3.0 concept, based precisely on the creation of high-quality content, comes to the mind: as early as now, modern social networks can create the brand new platform for the content generation, independently generate major content and provide users with the opportunity to filter this content and participating in its generation or editing.

Entertainment content (games, video, music), which is currently in great demand among the users, deserves particular mention. The integration of similar services is progressing rapidly (for instance Facebook declared its integrating with music service Spotify, Warner Bros. declared its starting the streaming movie service through Facebook,and earlier games applications, being available from various companies, in particular from the well-known games issuer Zynga, started appearing in the networks).

The Tools of Electronic Commerce

During last several years, social networks have been trying to get integrated with online stores and creating trading tools available for users. It is quite an attractive segment for the networking sites: nowadays electronic commerce market exhibits the turnovers of hundreds of millions of dollars, and social networks have got hundreds of millions of potential buyers. One has just to find an efficient tool of selling goods and services to these buyers. The same as for the content, there are two possible ways of progressing: integration with existing online stores and the creation of own platforms.

The integration tools are poorly developed so far. There is the possibility of creating special applications-stores for social networks that many online stores have started to implement (for example, "Expedition" store in the form of application)The integration tools are poorly developed so far. There is the possibility of creating special applications-stores for social networks that many online stores have started to implement (for example, Expedition store in the form of application); stores can be also connected to the networks, loading their data into special parts (e.g., “goods” section on Vkontakte social network). Such integration exhibits poor performance, the integration into a social network should be deeper, users’ behavior should be taken into account, the trading process should be personalized, etc. The creation of new integration tools is to be expected in the coming years.

On the other hand, social networks themselves gradually end up with creation of their own e-commerce platforms. Now there already Facebook Marketplace, Second Life Marketplace and other products. Social networks benefit precisely from creating platforms, the special functional that will allow selling and buying, and the network will act as an agent upon that, earning by advertising, extra functional, commission fees and other services. This tool will be in great demand both among common users and among companies, and social networks will be able to earn billions of dollars of net income that makes this line of the development the most promising with the perspectives of high progress in the foreseeable future.

Business tools

In my opinion, one more significant trend in the years to come will be the development of business tools. The ones will exhibit progressing in all the networks to one extent or another, but the most serious steps in this line will be made by the networks for business communication, such as LinkedIn. At present, people convert their work into Internet, and in particular, into the social networks more and more, thus, the need for special working tools increases day by day. One can expect the appearance of services for keeping the contacts, searching for customers, document management, HR management, cooperative work and even ERP-systems on the whole. These tools, most probably, will be free of charge in basic functional while extra functional will be distributed under SaaS model.

The first steps in this direction have already been made; social networks have started providing third-party developers with access to create special applications, including the ones for business. The networks also are beginning to create the job search features, trade, human resources recommendations, etc. These are just the first steps, further, special segments or may be even platforms will be generated on the basis of professional networks. On the basis of personal communication networks separate functions, mainly for the companies, will be created for providing the ones with the opportunity of implementing their activities within the network.

In the foreseeable future one can get prepared for the appearance of new networks or the transformation of the old ones into the working platforms, targeting economically active people. Communication tools, business applications, distributed under SaaS model, the tools of cooperative remote work will be highly developed in such networks.

Personalization

Any social network has got great opportunities for personalization of its work under a certain user. It can keep track of his behavior, interests, location and on the basis of all these data produce the personalized content of any kind. The personalization principle itself is in great demand; there is much information in the modern Internet, the most part of which is useless, and this tool allows selecting the required information precisely for a certain user at a certain moment of time in a certain place. The trend has been developing for 5 years and has not exhausted even the half of its potential opportunities so far; therefore, its further progress can be expected in the coming years.

Social networks have already mastered putting personalized advertisements, marking out the appropriate content (for example, an interesting service like Discover Facebook Pages, allowing searching interesting pages for certain person on the basis of the data, provided by him to the network), finding people being important for a person, etc. The higher quality personalization of content is to be expected in the nearest future, when the networks will master interconnecting the content into a single semantic web, creating multilevel information connections inside the projects, and an element of the web will be followed by the whole chain of the content the user is interested in. The networks may also master personalizing the functional. In many respects it will be closely connected with the technological progress, new functional will appear personalized by default.

Advertizing Technologies

Another important trend of recent development is the progress of advertising technologies. The ones precisely keep providing the major source of social networks’ income that means that these tools will exhibit serious progress in the nearest 3-5 years. Behavioral technologies, showing the advertisement to the user not only on the basis of the data available from his profile but on the basis of his behavior as well, are being actively introduced. In general, the networks possess great amount of information on users, they keep track of their lives, so to say. This allows the ones showing the advertisement in maximum targeted way and exhibiting the high level of conversion of visitors into buyers. These opportunities are complemented by a huge base of users, growing fast upon that, that makes social networks very attractive advertising sites. All largest brands have already lined up and are purchasing the advertising space on a large-scale.

Today, we can target our advertising in many networks by the following parameters: country, city, district, street, sex, age, marital status, education, position, interests, etc. Besides, there are behavioral technologies: the time of viewing, number of views, viewing after certain actions, etc. These tools allow touching the targeted audience quite precisely, selecting it among the great mass of the one without huge advertising budgets required. Such advertising has become available for everybody: from a private person up to a giant corporation.

In the nearest future, the tools of targeting will develop further, and, first of all, these are behavioral technologies, which eventually will be able to foresee users’ needs with high likelihood ratio. In addition, in the nearest future, much new functional, in particular in the field of electronic commerce, will appear in social networks, this, in its turn, will also become a huge base of information that will ensure the improved targeting of advertising. Besides, the networks are actively experimenting with the improvement of advertising performance (for example, new advertising format at Facebook, upon which the users are paid for viewing the advertisement). In this decade, advertising in social networks may fairly become the most efficient channel of goods and services promotion.

Geolocation

This is a relatively new trend, which started developing mostly due to the modern mobile technologies. Social networks are gradually mastering the tracking of users’ physical location and on this basis offer them the targeted content for certain area (everything that is physically close to the user: friends, entertainment establishments, information about the place, etc.) or the whole geolocation services (in particular, Foursquare geolocation service is gaining popularity fast). The identification of a person’s location is performed either automatically by means of mobile technologies or by means of data provided by the user himself. Information of the kind allows social networks expanding into person’s daily life that involves people even more.

In the nearest several years, mobile PC, smartphones and technologies of the kind will develop actively that will result in the rapid progress of geolocation functional in social networks. Even upon the telephone being switched-off, the companies can keep track of the location by means of other technologies, for instance face recognition. Many existing services will gradually start taking users’ location into account.

Anonymity

It is one of great problems of modern social networks, which is to be solved some way. Many people falsify their personal information or disclose little part of it on purpose, despite the anonymity tools are available. Therefore, new anonymity tools are to appear in the nearest future, which may allow keeping the data totally secret or even coded. In other words, users will be able of being in the network and tracking their friends’ activities without being noticed. The first fully anonymous projects are Diaspora or NektoMe.

4. Social Networking and Business.

Business in modern world widely uses social networks not only for the customers’ attraction, as many people may think. Depending on the purposes, the usage of social networks can be divided into two large groups:

  • Using within the company
  • Using outside the company

The companies, first of all the large ones, have various information systems to organize the workflow: both the Open Source solutions, and the Proprietary ones. The socialization of the ones has started recently. The pioneers were certainly IT companies of the global scale, for which it is important to maintain efficient communication of their employees from all over the world (for example, Microsoft Corporation, Google, IBM, Apple, Cisco Systems and many others). Basically, their information systems are social networks of closed type, dedicated only to the company’s employees, there is no universal definition for such. The employees have their profiles, communication tools, blogging tools, knowledge bases, corporate magazines… - it is a real electronic ecosystem inside the company! Apart from large companies, these technologies are already available for small organizations as well, but mainly in the form of cooperative work services (e.g., the Social Productivity App Manymoon, which is closely integrated with Google services as well). At present, such systems are in high demand as they solve a large number of tasks: project management, knowledge accumulation, improvement of employees’ loyalty, notification, distribution of work, etc. The list of the tasks can be drawn on many pages. Nowadays, such systems are an integral part of any large company, and in the nearest future the systems of the kind will actively be developing. They will gain new tools for the solving of new business tasks and, quite possible, they will start integrating with outer social networks.

Generally, the companies use social networks quite actively and can solve various tasks: the attraction of customers, the search of human resources, data search, image creation and many others. Upon that, whereas earlier all these goals were achieved by means of other tools (customers were searched for by means of TV advertising, employees were searched through specialized publications, and image was formed at press-conferences), at present, significant activity has been transferred precisely into social networks, which generate more and more new tools for companies and solve their tasks ever more efficiently. The using of social networks for business purposes first of all depends on the region the company performs in. For example, in the USA the companies actively use social networks, while in Russia only half do. In fact, the outer social networks are huge assembly of people that can be used for various commercial purposes. On the one hand, there are people with their needs and on the other hand there are companies being ready to meet these needs. Unfortunately, there are few tools, ensuring adequate communication of both parties, so far. It easy to conclude: in the nearest 3-5 years, the social functional will develop rapidly, which will allow efficient communication between the companies and consumers. The most part of companies will show high activity on many popular social networking sites and will start firm information integration.

Besides, different organizations often create niche networks, targeting certain market. For example, a financial group can generate a social network for financiers and benefit this way greatly. A large educational establishment can make a network for educational purposes, earning from it a lot. The networks, generated under such organizations, will develop intensely; upon that, the ones will have quite a number of peculiarities, which will allow closely integrating the company-owner into the social network.

5. Integration and Consolidation.

Today, social networks mainly develop separately and do not strive for integration. It is connected with the fact that the networks have not covered the huge mass of Internet users yet, the rapid quantitative growth is taking place, therefore, there is no need for its acceleration so far, and apart from that, many social networks are competitors to one extent or another. But this trend will gradually turn vice versa: people need the consolidation and expansion of scattered data, and there are already first examples of such integration (last year Yahoo! Pulse service, closely integrated with Facebook), or the most recent example: Google+, integrating its projects into the new social network exhibits phenomenal growth and now it’s the world’s most rapidly growing social network. Soon, the networks will benefit from mutual integration, certainly, if not direct competitors (e.g., managers’ social network MeetTheBoss TV has already started integrating with LinkedIn, Twitter and Facebook). Independently from social networks, third-party technologies and services for the consolidation of social networks, being beyond their impact, have been developing recently.

The consolidation process has been progressing gradually for several years so far. The first notable were: FOAF, XFN, OpenSocial, Google Social Graph, etc. Some social networks are beginning to stand for these initiatives; in particular, such known projects as MySpace, LinkedIn, Hi5, Bebo have already supported OpenSocial. And Facebook giant is going this way, creating Open Graph protocol for integration with third-party sites, which brings benefit mainly to the company itself.

The idea of Social Graph technology appears to be interesting. In the Internet there is a huge amount of people with certain list of contacts, direct and indirect ones. Each person has friends, visits favorites sites, including social networks, consumes some information. The contacts often intersect with each other or with the ones of other people, for example, two men can view the same site and this is precisely the point of intersection. All this can be regarded as a large web, the Internet itself is actually a giant social network. Activities and contacts of a certain person in the network can be traced in different ways, the simplest one is to collect and analyze information from several most popular sites, such as Google, Facebook, Yahoo and some other. Automatic analysis of the information can show the scheme of a person’s contacts and produce the forecast of his/her interests; for instance, person А has got friends - persons B and C on Facebook, upon that, the specified А and С use Twitter as well, but are not acquainted with each other in Twitter, the system can forecast that А and С may make friends on Twitter and suggest them to do so. In general, it resembles the principle of a semantic web much, and it is believed to be very promising, in the sphere of social networks in particular.

OpenSocial project, using API of many social networks and allowing creating cross-platform appli

The first part of the report: Everything About Social Network Sites. Impact on a Person [1/4];
The second part of the report: Everything About Social Networks. Development prospects [2/4];
The third part of the report: Everything About Social Network Sites. Technologies [3/4];
The forth part of the report: Everything About Social Network Sites. Monetization [4/4].


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About the Author

Nikita Semenov
Nikita Semenov
CEO, SECL Group Corporation
+1 (929) 237–12–11 info@seclgroup.com seclskype
Nikita Semenov is CEO of SECL Group Corporation, which structure includes the same name digital-agency «SECL Group»,Catamba Web Studio, chain of «Kupini Commerce» web stores, «Digitov» Business School, «Taxov» legal company. Since 2002 has been working in IT, since 2005 has been CEO of SECL, which in 2008 has evolved into the group of companies SECL Group. Author of numerous studies and articles, lecturer of specialized conferences, independent consultant for the dozen of companies. Specialization – social networks and eCommerce.

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