Many members of the so-called Web 2.0 generation of Internet companies, such as social-networking sites, blogs and other similar “social media,” have made little revenue, the Financial Times reported.Roger Lee, a partner at Battery Ventures, told the FT there is going to be a “shakeout” in the industry in the next year or two, with many Web 2.0 companies disappearing.
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Social networking sites need more regulation in order to ensure that they won’t pose major security risks to users, according to the European Network and Information Security Agency (ENISA). The agency issued a preliminary version of its General Report (PDF) covering online security this morning, pointing out that it views social networks as a “positive social phenomenon” that are not without their own set of security problems, and the organization has a set of recommendations meant to protect users online. ENISA said that some of the main threats identified so far through social networks involve digital dossiers, face recognition, and social engineering attacks on enterprises. Phishing attacks, reputation damage, ID theft, stalking, and cyberbullying are common as well. The organization says that, because of the human desire to connect and the growing popularity of social networks, it’s easy for users to let their guards down and not be aware of the size of the audience accessing their information. “Social Networking may be seen as a ‘digital cocktail party,’” read the report. “However, compared with a real-world cocktail party, [social networking service] members broadcast information much more widely and sometimes unadvisedly, either by choice or unwittingly.”

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Seattle-based Pelago, which has been developing a mobile social network called Whrrl, plans to announce either today or tomorrow that it has secured $15 million in a second round of funding, however several media outlets are already reporting the news today. Participating in the round is Deutsche Telekom’s venture capital arm, T-Mobile Venture Fund, with funds coming from Reliance Technology Ventures and Palo Alto-based DAG Ventures. Original investors in Pelago’s first round, totaling $7.4 million, were Kleiner, Perkins, Caufield & Byers, Trilogy Equity Partners and Bezos Expeditions, also participated. Originally, Pelago received funding from Kleiner, but after the prestigious valley firm announced it was launching the $100 million iFund, Pelago was transfered over to become the first iPhone application investment.

Think of the company’s application, Whrrl, as a mix between Facebook, City Search and Loopt. The social networking element is that you can share this information with friends, the directory part is that there’s a list of restaurants and events that your friends can rate and say whether they are going to or not, and the Loopt part is you can see what your friends are up to. The information is exclusive to Whrrl because it’s updated by a team in the Phillipines. Today, the application supports about 17 cities, and the Java application runs on a number of phones with Blackberry (and presumably iPhone) support coming shortly. With GPS support coming, users will also be able to update their whereabouts and write reviews of restaurants where they are at much faster. The new funds will be used for deploying the application across North America and into new overseas market
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The use of social networking has increased by 21% worldwide, according to a Universal McCann Social Media study- Wave 3.This survey indicates that social media usage is up to 58%, with about 272-million users worldwide.

Universal McCann Europe, Middle East and Africa (EMEA) surveyed 17,000 internet users in 29 countries, focusing on the evolving trends of social media. The findings are as follows:

Blogging: The blogosphere rivals any mass media in terms of reach, time spent and wider cultural, social and political impact. There are also major shifts into participation, pioneered by the Asian markets and now happening everywhere.
Brand penetration: This research indicates that MySpace is still number one among a broad collection of international networks with a 32% weekly reach. Facebook is second with a 22.5% weekly reach. However, in Asia a variety of local sites like QQ, Cyworld and Mixi dominate in home markets, while Orkut is number one in Brazil.

Things to watch in the world of social networking:
Niche Social Networks: In the face of the all encompassing mega social networks, a raft of more niche and sometimes exclusive networks are emerging.

DIY Social Networks: White label social network systems that you can customise are driving the emergence of a wealth of ultra niche networks.
Reputation Management: The survey predicts that personal brand management is going to be big in the next few years. Tools to report and manage your reputation are coming online; Wink.com or peekyou.com for personal search and reputa.com and reputationdefender.com for more sophisticated management systems.

Zooped,Facebook, MySpace and other Web sites have unleashed a potent new phenomenon of social networking in cyberspace. But at the same time, a growing body of evidence is suggesting that traditional social networks play a surprisingly powerful and underrecognized role in influencing how people behave.

The latest research comes from Nicholas A. Christakis, a medical sociologist at the Harvard Medical School, and James H. Fowler, a political scientist at the University of California at San Diego. The pair reported last summer that obesity appeared to spread from one person to another through social networks, almost like a virus or a fad.

In a follow-up to that provocative research, the team has produced similar findings about another major health issue: smoking. In a study published last week in the New England Journal of Medicine, the team found that a person’s decision to kick the habit is strongly affected by whether other people in their social network quit — even people they do not know. And, surprisingly, entire networks of smokers appear to quit virtually simultaneously.

Taken together, these studies and others are fueling a growing recognition that many behaviors are swayed by social networks in ways that have not been fully understood. And it may be possible, the researchers say, to harness the power of these networks for many purposes, such as encouraging safe sex, getting more people to exercise or even fighting crime.

“What all these studies do is force us to start to kind of rethink our mental model of how we behave,” said Duncan Watts, a Columbia University sociologist. “Public policy in general treats people as if they are sort of atomized individuals and puts policies in place to try to get them to stop smoking, eat right, start exercising or make better decisions about retirement, et cetera. What we see in this research is that we are missing a lot of what is happening if we think only that way.”

For both of their studies, Christakis and Fowler took advantage of detailed records kept between 1971 and 2003 about 5,124 people who participated in the landmark Framingham Heart Study. Because many of the subjects had ties to the Boston suburb of Framingham, Mass., many of the participants were connected somehow — through spouses, neighbors, friends, co-workers — enabling the researchers to study a network that totaled 12,067 people.

When researchers analyzed the patterns of those who managed to quit smoking over the 32-year period, they found that the decision appeared to be highly influenced by whether someone close to them stopped. A person whose spouse quit was 67 percent more likely to kick the habit. If a friend gave it up, a person was 36 percent more likely to do so. If a sibling quit, the chances increased by 25 percent.

A co-worker had an influence — 34 percent — only if the smoker worked at a small firm. The effects were stronger among the more educated and among those who were casual or moderate smokers. Neighbors did not appear to influence each other, but friends did even if they lived far away.

“You appear to have to have a close relationship with the person for it to be influential,” Fowler said.

But the influence of a single person quitting nevertheless appeared to cascade through three degrees of separation, boosting the chance of quitting by nearly a third for people two degrees removed from one another.

“It could be your co-worker’s spouse’s friend or your brother’s spouse’s co-worker or a friend of a friend of a friend. The point is, your behavior depends on people you don’t even know,” Christakis said. “Your actions are partially affected by the actions of people who are beyond your social horizon” — but in the broader network.

In addition, the researchers found that the size of smokers’ own networks did not change over time, even though the overall number of smokers plummeted, from 45 percent to 21 percent of the population during that time. The researchers realized that what happened was that entire networks of smokers would quit almost simultaneously