Friday, July 27, 2012

Social: "Networklets" Purposes and Recommendations Are Better Than Ads

When Facebook bought Instagram for like a gazillion dollars, you have to ask why.  I know all the talks out there about how it was a threat to Facebook and Mark Zuckerberg just kinda bought them out because he somehow knew that it would be a huge benefit to Facebook in the long run.  I don't buy it.

Instragram was a threat but it's other social networklets (a term I should trademark me thinks) like Foursquare, Yelp, and others that have their own social networks, albeit not as big as Facebook but big enough to be a threat.  And, furthermore, these networklets are much more useful than Facebook alone.

Clearly, Foursquare has figured out just how it wants to monetize the network of eighty or so million users via businesses paying to show up as recommendations.  Its intrusiveness is the key to winning users over and provides a more measurable tool for Foursquare and its partners on the effectiveness of the campaign.

And with Yelp, it clearly wants to leverage the user-generated reviews and suggestions, something of which Foursquare also has, to help it drive users to businesses.  Oh, and it also has a check-in system as well.

Both Foursquare and Yelp are prime examples of apps that mobile warriors can directly benefit from.  And because paid services to both networkslets are disguised as recommendations with tips/suggestions mostly generated by users, they offer a direct benefit to users and businesses.

Another networklet that I've been pushing friends to adopt in addition to Facebook is Path.  Wow, what an app.  Awesome UI and features that Facebook should have seen more as a threat than Instagram.  Path limits the number of friends you can have which forces you to be more careful about who becomes your friends.  And since they're mostly folks in your contact list, it's more personal and intimate.

However, a new update just became much more useful and a greater threat to Facebook.  With Path 2.0, the app gained the ability to pull in news streams from other social networks like Facebook and Foursquare.

Another feature that on face value seems out of place but it is right up with the recommendation features that the two above networklets are banking on to drive traffic and revenues.  Now, users can tell friends what they are reading, what much they're listening to, or what movies/TV shows they're watching.  It could become a source of revenue for Path going forward.

Taken together, these networklets offer a greater range of services and benefits that Facebook alone is unable to match.  Even with integration with iOS, Facebook will likely grow more chaotic, offering little value to users as directly as networklets can.

So, based on its lastest financial quarter and lack of direction from Mark Zuckerberg, don't be surprised of Facebook's murky outlook becomes very, very clear:  black storms ahead and with no way out.

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