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[Mustafa Akgul]

 WORLD OF CONNECTIONS
Jan 28th 2010


Online social networks are changing the way people communicate, work
and play, and mostly for the better, says Martin Giles (interviewed
here[1])

THE annual meeting of the World Economic Forum in Davos, currently in
progress, is famous for making connections among the global great and
good. But when the delegates go home again, getting even a few of them
together in a room becomes difficult. To allow the leaders to keep
talking, the forum's organisers last year launched a pilot version of a
secure online service where members can post mini-biographies and other
information, and create links with other users to form collaborative
working groups. Dubbed the World Electronic Community, or WELCOM, the
forum's exclusive online network has only about 5,000 members.

 But if any service deserves such a grand title it is surely Facebook,
which celebrates its sixth birthday next month and is now the second
most popular site on the internet after Google. The globe's largest
online social network boasts over 350m users--which, were it a nation,
would make Facebook the world's third most populous after China and
India. That is not the only striking statistic associated with the
business. Its users now post over 55m updates a day on the site and
share more than 3.5 billion pieces of content with one another every
week. As it has grown like Topsy, the site has also expanded way beyond
its American roots: today some 70% of its audience is outside the
United States.

 Although Facebook is the world's biggest social network, there are a
number of other globetrotting sites, such as MySpace, which
concentrates on music and entertainment; LinkedIn, which targets
career-minded professionals; and Twitter, a networking service that
lets members send out short, 140-character messages called "tweets".
All of these appear in a ranking of the world's most popular networks
by total monthly web visits (see chart 1), which also includes Orkut, a
Google-owned service that is heavily used in India and Brazil, and QQ,
which is big in China. On top of these there are other big national
community sites such as Skyrock in France, VKontakte in Russia, and
Cyworld in South Korea, as well as numerous smaller social networks
that appeal to specific interests such as Muxlim, aimed at the world's
Muslims, and ResearchGATE, which connects scientists and researchers.

GOING PUBLIC
 All this shows just how far online communities have come. Until the
mid-1990s they were largely ghettos for geeks who hid behind online
aliases. Thanks to easy-to-use interfaces and fine-grained privacy
controls, social networks have been transformed into vast public spaces
where millions of people now feel comfortable using their real
identities online. ComScore, a market-research firm, reckons that last
October big social-networking sites received over 800m visitors. "The
social networks' greatest achievement has been to bring humanity into a
place that was once cold and technological," says Charlene Li of the
Altimeter Group, a consulting firm.

 Their other great achievement has been to turn themselves into superb
tools for mass communication. Simply by updating a personal page on
Facebook or sending out a tweet, users can let their network of
friends--and sometimes the world--know what is happening in their
lives. Moreover, they can send out videos, pictures and lots of other
content with just a few clicks of a mouse. "This represents a dramatic
and permanent upgrade in people's ability to communicate with one
another," says Marc Andreessen, a Silicon Valley veteran who has
invested in Facebook, Twitter and Ning, an American firm that hosts
almost 2m social networks for clients.

 And people are making copious use of that ability. Nielsen, a
market-research firm, reckons that since February 2009 they have been
spending more time on social-networking sites than on e-mail, and the
lead is getting bigger. Measured by hours spent on them per
social-network user, the most avid online networkers are in Australia,
followed by those in Britain and Italy (see chart 2). Last October
Americans spent just under six hours surfing social networks, almost
three times as much as in the same month in 2007. And it isn't just
youngsters who are friending and poking one another--Facebook-speak for
making connections and saying hi to your pals. People of all ages are
joining the networks in ever greater numbers.

 Social-networking sites' impressive growth has attracted much
attention because the sites have made people's personal relationships
more visible and quantifiable than ever before. They have also become
important vehicles for news and channels of influence. Twitter
regularly scores headlines with its real-time updates on events like
the Mumbai terrorist attacks and on the activities of its high-profile
users, who include rap stars, writers and royalty. And both Twitter and
Facebook played a starring role in the online campaign strategy that
helped sweep Barack Obama to victory in the presidential race.

DELIVERY TIME
 But like Mr Obama, social networks have also generated great
expectations along the way on which they must now deliver. They need to
prove to the world that they are here to stay. They must demonstrate
that they are capable of generating the returns that justify the lofty
valuations investors have given them. And they need to do all this
while also reassuring users that their privacy will not be violated in
the pursuit of profit.

 In the business world there has also been much hype around something
called "Enterprise 2.0", a term coined to describe efforts to bring
technologies such as social networks and blogs into the workplace. Fans
claim that new social-networking offerings now being developed for the
corporate world will create huge benefits for businesses. Among those
being touted are services such as Yammer, which produces a corporate
version of Twitter, and Chatter, a social-networking service that has
been developed by Salesforce.com.

To sceptics all this talk of twittering, yammering and chattering
smacks of another internet bubble in the making. They argue that even a
huge social network such as Facebook will struggle to make money
because fickle networkers will not stay in one place for long, pointing
to the example of MySpace, which was once all the rage but has now
become a shadow of its former self. Last year the site, which is owned
by News Corp, installed a new boss and fired 45% of its staff as part
of a plan to revive its fortunes. Critics also say that the networks'
advertising-driven business model is flawed.

 Within companies there is plenty of doubt about the benefits of online
social networking in the office. A survey of 1,400 chief information
officers conducted last year by Robert Half Technology, a recruitment
firm, found that only one-tenth of them gave employees full access to
such networks during the day, and that many were blocking Facebook and
Twitter altogether. The executives' biggest concern was that social
networking would lead to social notworking, with employees using the
sites to chat with friends instead of doing their jobs. Some bosses
also fretted that the sites would be used to leak sensitive corporate
information.

 This special report will examine these issues in detail. It will argue
that social networks are more robust than their critics think, though
not every site will prosper, and that social-networking technologies
are creating considerable benefits for the businesses that embrace
them, whatever their size. Lastly, it will contend that this is just
the beginning of an exciting new era of global interconnectedness that
will spread ideas and innovations around the world faster than ever
before.

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[1]
http://audiovideo.economist.com/?fr_story=037df1cce1344f5a977e2e7ed1363a654111c3d5&rf=bm
<http://audiovideo.economist.com/?fr_story=037df1cce1344f5a977e2e7ed1363a654111c3d5&amp;rf=bm>



See this article with graphics and related items at
http://www.economist.com/specialreports/displaystory.cfm?story_id=15351002
<http://www.economist.com/specialreports/displaystory.cfm?story_id=15351002>