Facebook's astronomical growth with its closed, proprietary platform played a key role in expediting a wide cooperation, led by Google, amongst players on the other side of the line. These players, in addition to doing the right thing, also want to quickly stunt the user growth on the Facebook island - as users deepen their time/effort investment on Facebook, their switching "cost" out of its platform increases. Facebook traffic has almost doubled in the past five months since it opened its platform on May 24th (from 27M monthly uniques to 51M).
Google has created a partner ecosystem to release OpenSocial APIs which can be used by developers to create applications that will work on any of the host social networking sites in the ecosystem. There are already 27 partners in the ecosystem (MySpace, Bebo, Hi5, Ning, LinkedIn, Plaxo, Salesforce.com, etc.). Marc Andreessen, Founder of Ning, has a good explanation of benefits to participating partners on his blog. APIs are built on Google's Gadget technology.
Google has historically gone solo in creating new standards. What changed this time around?
- Orkut, Google's social networking product, never really took off like MySpace or Facebook. It's therefore a defensive move by Google in order to not allow one of these sites to become the default destination for users' social activity on the Web. By lining up partners that have a strong desire to participate in open standards that give them access to more applications and by providing users an easier way to mange their information across social networks, Google has created a very compelling value proposition that benefits everyone - participating social networks, the end user, applications developers, and, above all, Google.
- The promised holy grail with social networking is to leverage rich user data for high-CPM, targeted advertising. Google has a proven leadership in this game. But it needs access to that data. Even though questions still remain about ownership of user data on applications built using OpenSocial APIs and distributed on several social networks, common standards is a step in the right direction. It's a matter of time before data ownership, profit sharing, and related questions get answered.
- OpenSocial will streamline the ability to feed Google ads into applications/widgets. Googles, thru its AdSense program, has the biggest network of advertisers on the planet. No other company is therefore better positioned to leverage the vast amount of advertising inventory that is being created by an explosion in the number of widgets/gadgets/applications on the Web. It also gives developers and marketers of applications, especially small- and mid-size firms, one channel to reach multiple audiences.
With Facebook's expected launch of its own advertising network that promises to effectively leverage user data for targeted advertising (e.g., thru News Feeds), it'll be interesting to see a showdown with OpenSocial, as advertising dollars continue to shift online, and brand advertisers play a bigger role in this shift.
Meanwhile, OpenSocial participants will be busy stabilizing the new standard and fixing its bugs. The first OpenSocial application was hacked within 45 minutes after its launch.
