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Social Networks: Foundation But Not Commodity


In a recent discussion, Fred Wilson from Union Square Ventures tossed out the idea that social networks, like Facebook, aren’t fads because they will soon be one of the foundations of Web sites. Web sites like BusinessWeek will have them and they’ll be woven into the fabric of the site, to be built upon.

Usually, when I think foundation, I often think commodity. (I didn’t ask Fred, but I am pretty sure he didn’t mean it that way). But to me, foundation brings to mind telecom pipes, which over the past decade became commodity products dwarfed by the content from the Web running over them.

What seems different now through is the hyper atomized, distributed and massive nature of the Web. I used to think that search engines were commodities (this was in the late 1990s, before the rise of Google). That was because portals and bit destination sites were ascendant, and the way people navigated the Web had to do with folks going to those sites and then being shot in different directions. But then Google made search the predominant way to parse through information and rather than doing it by URL, you go through the distributed bits of information that are pulled togehter by search.

There’s something similar in social networking that doesn’t make it a commodity. The power of the breakout social networks is that they make connections among folks across different groupings, geographies, and interests. So if BW created a Facebook network for BW readers, that wouldn’t turn Facebook into a commodity, because it would also be able to connnect those folks to other splinters of communities.


Steve Ballmer, Power Forward
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