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Business - Written by on Wednesday, October 31, 2007 22:42 - 4 Comments

Don Tapscott
Google, OpenSocial, and competing in the Web 2.0

Last week Microsoft grabbed headlines by buying a small stake in Facebook. Many people viewed this as quite a coup in Microsoft’s struggle to resist Google’s ever-increasing dominance of online advertising. After all, Facebook seems to be rapidly turning into the defacto social utility network, and if Microsoft combines a small ownership stake with some exclusive ad serving deals within the utility, surely it will put a major dent in Google’s armor – right?

Well maybe – but maybe not. This week, in what some could see as the ultimate web 2.0 strategic response, Google announced the launch of OpenSocial – an open API Google is bringing to the social networking world along with partners Orkut, LinkedIn, Hi5, Friendster, Salesforce.com, Oracle, Ning, and several others.

To outline why this is a big deal in the social networking world, I’m going to call on Marc Andreessen – the cofounder of Ning, who also gained some recognition for the rise of a little company called Netscape. If you go back to June of 2007, he called the open Facebook platform a dramatic leap forward for the Internet industry. My favorite quote from his post:

Metaphorically, Facebook is providing the ease and user attraction of MySpace-style embedding, coupled with the kind of integration you see with Firefox extensions, plus the added rocket fuel of automated viral distribution to a huge number of potential users, and the prospect of keeping 100% of any revenue your application can generate.

The leadership that the Facebook team is showing here rivals anything that the large and established software and web companies have done in this decade.

Well put – we couldn’t have agreed more around here, and said so in this very blog. Then, in his excellent post on OpenSocial that went up today, Marc called it the next great leap forward. On this point I must also agree.

The key reason is simple – while Facebook opened up it’s platform, any application that was developed could only run within Facebook, meaning you could get in but not necessarily get out (or at least not easily). Now, developers can work with OpenSocial and have their applications function in multiple social networks and other “containers.” In other words, it takes the apps out of Facebook’s walled garden, in addition to a variety of other benefits built into OpenSocial that Marc lays out beautifully.

Now obviously Marc has a vested interest in OpenSocial succeeding, as Ning is one of those “other” social networks (and a very interesting one, with a slogan of create your own social network for anything - you should definitely check it out). In his blog he also talks about how Facebook might just prefer proprietary lock-in to be maintained (which is probably what got my friend Nicholas Carr writing about this announcement). But where this gets really interesting is when you think about one of Marc’s main arguments for why Facebook should welcome the change:

It’s hard to see Facebook losing in a world of a billion or more social network users, and hundreds of thousands or millions of social network apps. And it’s also easy to see how a lot of other people — containers, and app developers — will win, as well.

In fact, if rumors of a Facebook web-wide ad network are true, then this could be great for Facebook in another way — such a Facebook-run ad network could be an outstanding ad network for all of these new Open Social web applications!

A Facebook-run web-wide ad network (in partnership with Microsoft, of course)… what do you imagine Google thinks of that? You know, the company that people are saying did this whole OpenSocial thing to ward off Facebook? Or perhaps a better question is can anyone look at all of this and argue that the rules of competition aren’t changing dramatically in the Web 2.0?


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Melle Gloerich
Nov 1, 2007 4:03

Interesting times indeed. Very cool to see the big guys make a move. I would love for Facebook to succeed even further, as I’m one of their users, but unless they can somehow plug into this OpenSocial network I’m afraid their walled garden will be one of tranquility when the big parade will be just outside.

Nov 1, 2007 10:19

Since I was first introduced to Facebook I didn’t think much of it and my friends couldn’t understand why. All I said to them was that someday, something better will replace it. No one likes to be locked in and limited which is why I believe OpenSocial will simply crush it. In my opinion, the only way for Facebook to survive will be to join the OpenSocial network.

Another huge advantage to OpenSocial is that it appears to be poised to tackle the business networking side of things. Facebook probably couldn’t do that, at least not on their own.

Don Tapscott
Nov 2, 2007 8:18

Melle – love that line, “…afraid their walled garden will be one of tranquility when the big parade is just outside.” I might have to borrow that someday!

Steve – great point on the business networking. There’s a huge opportunity there that hasn’t quite been figured out yet…

Melle Gloerich
Nov 4, 2007 13:02

Don: I’d be honored if you do :-)

Now available in paperback!
Don Tapscott and Anthony D. William's latest collaboration, Macrowikinomics: New Solutions for a Connected Planet. Learn more.

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