OpenSocial

On November 1st Google announced the launch of OpenSocial API. Described by Google as, “a set of common APIs for building social applications across the web — for developers of social applications and for websites that want to add social features,” OpenSocial will allow developers to make social networking tools which are portable and not domain dependant. Google says that developers will be able to use the tool to “build far-reaching applications that users can enjoy regardless of the Web sites, applications, or social networks they use.” Says ComputerWorld, “In a nutshell, OpenSocial is likely to mainstream social networking and transform it from mostly gossipy online graffiti for teenagers into a super powerful and automated way for everyone to communicate with the people they care about.”

If it were just a play by Google OpenSocial might not be quite as newsworthy; the value of such a move is not as great if one is going it alone. Google, however, is not alone. Already signing on to the initiative are Bebo, Engage.com, Friendster, hi5, Hyves, imeem, LinkedIn, mixi, MySpace, Ning, Oracle, orkut, Plaxo, Salesforce.com, Six Apart, Tianji, Viadeo, and XING. (Notably missing from the list is Facebook, which is MySpace’s big competitor, and is largely credited with the idea of encouraging site specific widget development by outside developers.) The implication of such a roster, which estimates a user base of 200 million, is huge. By writing one application developers will have access to roughly four times what Facebook, with 50 million profiles, has. “OpenSocial is going to become the defacto standard for developers instantly out of the gate,” MySpace cofounder Chris DeWolfe said on Friday.

While being spun by Google as a way to make the Web more social, the company also has money in mind. And as should be expected, that money will come from advertising. Joe Kraus, Google’s product manager for OpenSocial said that by making it easier for developers to reach their market, Google ultimately will benefit because users benefit. “Consumers spend more time online, and generally, when consumers spend more time online, they’re doing more searches,” Kraus said. As eWeek notes, “Implicit in this statement is that users who do more searches will stumble across more ads, resulting in more clicks, and hence, more ad revenue for Google.” Google will also likely see an increase in revenue via its AdSense tool. While Krauss stated that OpenSocial applications will not need to use Google’s AdSense, the company would like to see developers placing ads in widgets using their tool and Google is anticipating some income from that stream. Krauss admits to this, “We certainly hope that by having more developers writing more applications that are social, some of them choose AdSense and certainly the company would benefit.”

“It’s rather like in the business world, the way a software vendor likes to encourage people to build products on top of its products, but doesn’t necessarily take any revenue from the partners that do that because it enlarges its market,” said Ovum Research analyst David Bradshaw. And in the advertising market Google is tough to beat. Patrick McKenna, CEO of DMi Partners, told TechNewsWorld, “One thing Google has over all social networks is its unparalleled ability to monetize traffic.”

For many, the initial reaction to OpenSocial was that it was Google’s shot at Facebook and Microsoft which just days before OpenSocial was announced signed a $240 million advertising deal. However, if that is so, it is only the echo of the shot. Talks between Google and MySpace began a year ago, about the time the two cut their own advertising deal for $900 million. As noted in Computer Business Review, “Could this be a direct retaliation? We think the converse – because Google had this rolling down the launch ramp, it was perhaps not as keen as Microsoft for an alliance with Facebook.” Though not a direct response to the Microsoft/Facebook deal, OpenSocial will likely be a blow to Facebook. As the go to site for social networking at the moment, Facebook has the benefit of therefore being the go to site for developers creating social tools. It is an apparent circle of success which Google and OpenSocial are attempting to threaten. However, questions, in particular about user response, are being asked.

According to TechNewsWorld, “Google may be changing the face of social networking with its new open platform for third-party applications, and the news that MySpace is joining the effort may be giving Facebook an even bigger reason to sweat. The ultimate question, though, is whether anything the companies or the developers do will prod social networkers to change their habits accordingly.” eWeek asks much the same question, “In the midst of all this speculation, it is easy to overlook one giant unknown: How will social networkers react?” Further questioning Google’s move, the eWeek piece refers to Victor Donselaar, president of Movial, a provider of mobile applications and tools, noting, “One important element in Google’s plans that is missing — so far — is mobile functionality.” Donselaar states that “[Mobile tech] will be the default access point for accessing social networks.” Though this piece may be missing for the moment, there is speculation that Google may have plans to capitalize on it.

Days after it announced OpenSocial, Google also announced it was joining a group of developers to support a Linux-based, open sourced cell phone operating system, Android. Like the OpenSocial group, the list of adoption for Android has some big names: T-Mobile, HTC, Qualcomm and Motorola. (Nokia has said they are not averse to the idea of joining.) The first phones running on this platform are expected in the second half of 2008. Says ComputerWorld: “Could it be more obvious? The Google Phone project will support, feature and emphasize OpenSocial widgets.” ComputerWorld also suggests that if this happens it could be revolutionary, “Everyone is talking about two big Google projects: The long-awaited Google Phone, and the new OpenSocial initiative. Each is cool, but combined, well, they’re going to change everything.”

While all this is waiting to take off, or not, there is one thing that is obvious: the value set on social networking is increasing. The New York Times quotes Eric Schmidt, Google’s chief executive, “One of the things to say, very clearly, is that social networks as a phenomenon are very real,” he said. “If you are of a certain age, you sort of dismiss this as college kids or teenagers. But it is very real.” It gets all the more real as the college kids and teenagers enter the workforce and expect social networking to take a seat in the office with them. InfoWorld acknowledges this, “as the ‘millennial generation’ leaves school and enters the workforce, businesses will have to accommodate them by deploying the social networking capabilities they are used to.”

In an effort to monetize the movement, “Everybody is lining up, picking sides and buying weapons,” says analyst Rob Enderle. “This is going to be bloody for a while. The battle for the social networking space is going to be hard fought.”

A more complete version of this post, including links to market research, can be found at the website of Analyst Views Weekly.

More information on this topic can be found in Northern Light’s Internet & Information Services Market Intelligence Center.

And in the following articles:

AnalystWatch: Google OpenSocial Empowers Web Portability
Computer Business Review, November 5, 2007

According to a widely-leaked announcement due as we went to press, Google is to introduce OpenSocial, a set of APIs that enables third-party web application developers to build applications that can appear with little or no modification on any of the websites that have adopted the API.

Will OpenSocial Open Wallets for Google?
eWeek, November 2, 2007

Google’s OpenSocial bonanza has consumed the high-tech media and blogosphere for the last few days. Since it was formally unveiled Nov. 1, the focus has been on what kinds of applications programmers will build from the 15 or so social networks that have signed up.

Making the Google Phone, OpenSocial connection
ComputerWorld, November 2, 2007

Whatever the Google Phone project entails, you can be sure it will improve the experience of using Google applications from a cell phone — applications like Gmail, Maps, Search, Docs and YouTube, for example.

Social Networking Likely to Grow in Enterprises
InfoWorld, November 2, 2007

While social networking sites may primarily be the domain of students and recreational use, enterprises can be expected to climb aboard as well, dignitaries said at the Nokia Mobile Mashup 2007 event in Palo Alto, Calif. on Thursday.

Google and Friends to Gang Up on Facebook
New York Times, October 31, 2007

Google and some of the Web’s leading social networks are teaming up to take on the new kid on the block — Facebook. On Thursday, an alliance of companies led by Google plans to begin introducing a common set of standards to allow software developers to write programs for Google’s social network, Orkut, as well as others, including LinkedIn, hi5, Friendster, Plaxo and Ning.

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