Social Networks: A marketplace for the future

The last 3 years have been all about social networking. The term became so significant that the entire world wide web had to be renamed to "Web2.0", primarily to depict the emergence of social networks.

Brief fact sheet of social networks

Friendster is widely known to have pioneered the phenomenon, but it was mastered first by MySpace, the site that grew to 100+ million users in some 2.5 years. In a matter of months the site was acquired for $650 million, which everyone in the current setting looks as one of the smartest bargains. And who wouldn't, when a much newer website YouTube which primarily leveraged the MySpace phenomenon to warrant a $1.6 billion acquisition by Google.

Orkut, Bebo, Facebook and MySpace are a few popular social networks geared towards youngsters where several million users interact with each other almost daily. Similarly LinkedIn and Ryze are extremely popular for professional networking.

We at Wirkle have a mobile social network LinkNSurf focused around sharing mobile content with your network.

Why do we need social networks?

10 odd reasons according to me:

- Meet new people
- Find long lost friends
- Organize our contacts and easily communicate with people
- A past time hobby
- Find leads for our business
- Find Jobs
- Find answers from a expert group of people willing to answer our queries
- Discover new entertainment like music, videos, etc.
- Create our online/mobile identity (An open diary of sorts or better its like your real estate which you keep on decorating with the stuff you like)
- Just because everyone else in the damn world is doing it ("If you are not on MySpace you don't exist" phenomenon)

Now where is the money? (or rather who should be making the money)

Web 1.0 approach towards this: "I am MySpace. My site has 100 million users. All the advertisers will advertise on my site, I make all the moolah. Period."

Web X.0 approach towards this: "I am MySpace. My site has 100 million users. I have the largest shopping mall on the planet. I allow people to build and promote their shops in my shopping mall and enable them to make money from my site (of course in turn I make money by charging them for the transactions that happen)"

Let me elaborate a little more on my analogy:

Look at a typical shopping mall today, it has dozens of shops (some more popular than others). These shops are not inherently different from one another, in essence everyone has one objective "Make themselves more and more popular, sell more and more stuff and pay rent/profit share to the mall owner)". Now even malls can be specific e.g. GoldSouk (focused just around selling gold) or Generic e.g. (One's that should have a Movie theater, Book bazaar and Nike store at a minimum). At max even the biggest mall would have provision to accommodate only a few hundred shops.

Now think a social network like "MySpace" or "LinkedIn" or "LinkNSurf". Could these be the biggest digital marketplace of all times? You host your stores to
- Sell your videos (think movie theaters). Again some stores are more popular than others so maybe the CNN hosting videos is popular than your user generated one but you can make a lot of money by posting a cool user generated video
- Give expert answers (think consultants), so you as a wireless expert can answer people's queries and get paid for it.
- Resell popular music, videos, art, furniture and what not (think Best Buy). The more popular your profile is the more people visit your store and buy more.
- Even Google Ads on your profile should pay you cos you are making more money for the social network than a person who barely opens his account.

This is just a small food for thought, maybe there are a dozen different possibilities of how creatively you can utilize your profile(a.k.a shops) to sell stuff like e-cards, ringtones, class notes, etc... the possibilities are endless and the proposition is simple "You make money and hence your hosting social network makes money"

So what do you think, by catering to the long tail of people ready to sell stuff will social network be the biggest marketplace (or in a more polished language the mother of all marketplaces) ever known to us?