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7 November 2007

Google connects social networks to online advertising with OpenSocial

This week Google, whose Orkut social network has floundered badly in most of the world, is teaming up with other also ran social networks such as LinkedIn, hi5, Friendster, Plaxo and Ning. Its goal is to develop a common set of standards and interfaces called OpenSocial that will allow software developers to write applications and provide services that will be compatible with all of their social networks’ Web sites – “write once, run on multiple social networks.”

The hope is that the combine can compete with Facebook, which recently made similar capabilities available. If they can, it’ll mean more ads for Google to serve up and fewer for Microsoft to serve up on Facebook.

* Google last week lost Facebook’s advertising outside the US to Microsoft, which already had Facebook’s US business.
*Many industry folks predict that social networks, which also offer video sharing, will be one of the dominant applications on mobile phones – together with search and mapping. Remember Google CEO Eric Schmidt’s statement that the future of mobile phones will be “person-to-person” interactions with people exchanging videos and other data?
* In recent weeks Google has said it’s considering buying wireless spectrum, either alone or with an as yet unnamed partner – and building its own wireless network. Google is developing software for mobile devices that’ll allow users to access any Web site and run any web application or service.

Hmm, wonder if Orkut and its fellow social networks will have a prime position in the bundle.
Social Network Popularity

Social Network Unique Users in US in millions Change from Prior Year
MySpace 68.1 23%
Facebook 30.6 129%
Flickr 13.1 90%
Bebo 4.4 83%
Imeem 3.2 1,590%
Source: comScore

* Google already has a deal with to handle advertising on News Corp’s MySpace, the most popular social network site. Google agreed to pay News Corp a minimum of $900 million over three years.
* Apple makes videos from Google’s YouTube available on its iPhone, iPod touch and Apple TV. Google converts Adobe Flash video files that YouTube uses into a format that can be played on the three Apple devices.
* Google wants a success in social networks in a big way. Google’s Schmidt recently said, “One of the things to say, very clearly, is that social networks as a phenomenon are very real. If you are of a certain age, you sort of dismiss this as college kids or teenagers. But it is very real.”

Google lost Facebook to Microsoft when Microsoft bought shares in Facebook in order to land its advertising.

Earlier this year, Facebook opened its service to outside developers. So far more than 5,000 applications have been developed for Facebook, making the web site more useful for its members.

Those developers and others now can also write applications that’ll run on all the social networks that adopt the Google-driven OpenSocial standard. The sites in the OpenSocial alliance are estimated to have a total of 100 million users, more than twice Facebook.

Developers of popular Facebook applications, including iLike, Slide, Frixter and RockYou, are expected to announce that they will customize their programs to run on the OpenSocial sites.

OpenSocial Members OpenSocial Developers
Google’s Orkut iLike
hi5 Frixter
iLike RockYou
LinkedIn Slide
Ning Oracle
Plaxo Salesforce.com

The New York Times quoted an unnamed source as saying, “It is going to forestall Facebook’s ability to get everyone writing just for Facebook.”

The OpenSocial gang also includes business software developers Salesforce.com and Oracle who develop software for business applications.
Vic Gundotra, who heads Google’s developer programs, was quoted in the New York Times as saying that Google will soon begin creating open source software tools and giving them away. The goal, he said, is to improve all software that runs on the Net, including Google’s, which will increase Internet use. That will allow Google to sell more ads and charge more for them.

When word leaked out that Google was leading an alliance of social networks and business software developers in developing a standard platform that allows third-party software developers to write one application that will run on multiple social networks, the first question in most industry minds was whether MySpace, the “Google of social networks,” would join in.

As we went to press, MySpace wasn’t talking about the matter. However, the Silicon Alley Insider’s Peter Kafka said he heard MySpace will announce this week that it will adopt the OpenSocial standard.

There are several reasons MySpace might join the OpenSocial initiative. There’s that $900 million advertising deal. Facebook has had its software development platform out since earlier this year and has been making hay. MySpace is reportedly struggling with creating its own development platform and may be months away from completing it.

Over the past year, Facebook has grown faster than MySpace in membership, usage and media spotlight. MySpace still dominates in the number of users and usage. Facebook, which started out as a student-only social network, is also said to have an audience that’s more attractive to advertisers – in terms of both age and income.

Going with Google would give MySpace access to Google’s technology and brand awareness. On the downside, it would let minor players in social networks take advantage of MySpace’s user base.
The next question then is whether Facebook will follow, too.