Business implications of Google’s OpenSocial

Dee Copland recently posted a question on the Bootstrap-Austin mailing list asking about the implications of Google’s OpenSocial to social networking and small and medium size business. Following is my reply to her and the network.

The implication for small and medium (and large!) business of platforms like Google’s OpenSocial are going to be quite profound.  We are starting to see the beginnings of a whole new method of business and work based around social networking technology.  The biggest present example of this was built by Facebook when they opened up their APIs so that third party software developers could build applications that leveraged off of a user’s “social graph”. Social graph is a fancy term for saying the people that you are connected to through a social network… but the implications are profound for this method of organizing people…  Anytime a technology has been introduced throughout the millennia that helps organize people or helps solve resource constraint problems (that is, helps get resources (people and stuff) to where they are needed) major shifts in wealth production have happened. I expect that this is the very same thing that is happening now… first led by Facebook.

Facebook opened up their platform to get many more innovative applications built around their social networking site.  Although many of the applications were of the type where “my vampire bites your mummie” some of the apps have been truly innovative- one of my favorites was an application that helps a user manage his  resources- you have to be his “friend” through Facebook to get access to his resources.  This frees up this guy from having to turn on and off access to his resources… if you are listed as his friend, you are in.  If you are not listed as his friend, you have no access… Even if this entrepreneur only saves a few hours a month by not having to update who has access to his stuff, imagine- that is time and money saved by him.

Facebook is being likened to the early stages of what AOL did with its set of services– people used AOL in the yester-years of the Internet mainly because it gave them one place to “start” on the net.  AOL essentially packaged some of the best of the net and users benefited because of this.  The implied problem here is that just like in the AOL situation, many companies could be locked out by AOL- for AOL had control of the network.  Facebook has not shown that it wants to lock out anyone… but the fact of the matter is that Facebook, like AOL has control.  This is much like the debate of having toll roads versus public roads- who has control of thoroughfares.

So what is the implication of Google’s strategy?  There are two moves that I think are particularly interesting- one from a strategic business perspective on who you might look to align your application strategy with, and also what this move represents to you in a long term business perspective.

First, why did Google do this?  Many people found the fact that they had to keep all of their information stored on Facebook as a problem- only one network holder the key to the whole network.  Google is disrupting Facebook’s closed strategy with an open strategy- so that social networking innovation is not stuck on one vendor.  Google has shown is prowess in effectively competing in open networks (namely the Internet).  This move allows consolidation among many of the social networks out there, and also keeps networks into the future more open. Facebook today still has the dominate position.  What this move by Google represents- is Google’s flattening of the playing field for the future.

So what does this mean for your business?  Two things- one of them is strategic, the other is tactical.  First strategically, this means that there should be no particular vendor lock in on one social network (namely Facebook) if you participate in the OpenSocial platform.  No particular vendor lock in to me means that there is a better chance at much, much, much more innovation in the social networking space than what has already happened to date on top of Facebook alone- although I predict that we don’t see this till many more regular users start using these other social networks.  Secondly on a tactical level, this means that software developers won’t have to learn proprietary programming languages (like Facebook’s) for every social network that they are working with.  Essentially this means that less code will have to be written, and software developers will have less languages to learn to build applications.

But the real implication of this move to you and all of us as entrepreneurs is a clarion call from the future telling us how we will be working together in the future.  Waves of applications are going to arise and new types of organizations will form around entrepreneurs finding each other and working together.  This is the part where it gets exciting.  Social networking is not for sharing your photos online.  Businesses (and entrepreneurs) that ignore social networking as just a fad are going to get marginalized, while those of us that use this technology as a way to organize our work will find new levels of success.  Google’s strategy of “opening up” these networks will ensure that much greater innovation happens in a shorter timeframe, without the limiting effects of just one vendor (e.g. Facebook) getting in the way.

Yeah… I am thinking about this space a lot these days.  I would really like to hear your input on this. I am going to post this email on my blog here… Please anyone that would like to give me personal feedback (or debate it with me), post it back to my blog (or email me privately).  Or given that we have some really kick ass examples of these apps emerging, make sure to keep your eye on the entrepreneurs of our local tribe Bootstrap Austin.  Oh… and if you have examples of your kick-ass app that you would like to share with the readership of my blog on this subject, please make sure that you post a comment on the blog post as well.