Social Networks: The New Platform

The big social networks are the new platform. More than 10 years ago, Windows became the platform of choice. It provided core functionality but allowed companies to build a huge variety of applications that extended the platform and cemented its dominance in the market. Today’s large social networks have the same opportunity. The question is, will they capitalize on it?

As I mentioned last August, widgets are the future. They are today’s new applications and they live on top of the existing social networks. They also run within lots of other environments — blogging platforms, open source community systems, and good old web sites. But their real impact is on the large, established social networks.

The great risk and the great opportunity for Windows was that it was a wide open sytem. This caused users (and CIO’s) a lot of angst because it meant users could run just about any application they wanted to — even applications that caused the system to crash or corrupted their data. But the risks far outweighed the benefits. Windows became the standard not because it was a great platform in and of itself but because of the applications it enabled — communications apps from email to browsers to IM, productivity applications, games, and the list goes on.

Today’s social networks aren’t sure what their policy is on being open. So far they seem to be taking a wait and see approach — kind of like the big wireless carriers.

Where’s the line? As one entrepreneur described it to me, the line is drawn when other sites try to get revenue (in the form of advertisements) directly within an existing social network. It’s ok to let users put a widget on their page that causes the user to click on the widget and go to another site (you know the ones), where ads are displayed or money is collected.

But the social networks do not like it when these same companies show ads or try to collect money within their widgets directly on the social network’s site, without the permission of the social network. That’s where the line is.

What the social networks should really do is open up their sites. As another entrepreneur said, the site with the broadest support for widgets and third-party supplied functionality will ultimately win.

The social networks should also implement a well-defined and supported revenue sharing mechanism. They should try out Microsoft’s old mantra: “embrace and extend.” Rather than challenging the ecosystem, they should support and encourage it — not just by allowing widgets and the like — but by enabling the ecosystem participants to make money (alongside the social networks).

The big social networks are today’s new platform. May the most open one win.