Location-based mobile social networking is just getting started in the U.S., and there’s a lot of hype surrounding it. But will that hype turn into dollars?Research firm ABI Research predicts the nascent industry will turn into a $3.3 billion market worldwide by 2013. Where will that money come from? Location-based mobile advertising “holds a lot of promise,” notes ABI analyst Dominique Bonte, in a statement. But “the current reality” suggests licensing and subscription revenue-sharing — like Loopt’s recent deal with Verizon Wireless — the most likely near-term revenue streams.

It’s hard to put much weight in pie-in-the-sky predictions like this: It’s one thing to take an existing market and plot out a growth chart. Bit right now the industry is a goose egg, give or take a couple million. We’d hold off before predicting a huge boom.

More interesting to us: Whether today’s location-based mobile social networks — like Loopt, Whrrl, etc. — will be able to outlast more established social networks like Facebook, MySpace, Twitter, and maybe LinkedIn, once location becomes a feature on those platforms.

When you already have several hundred friends on a social network, it’s a lot easier to add a feature like location than it is to add several hundred friends on a network whose main attraction is location.

Of late, Michael Rubin’s life has been transformed by a website that lets anyone create their own online social network within minutes free of charge. The site, called Ning, allows the mild-mannered family man from Santa Cruz, Calif., to inhabit more personas than a superhero as he dashes heroically between several of his social networks.

Mr. Rubin used Ning to start a loyal customer base for his chain of “paint your own ceramics” studios and foster a community around a book he’s written about digital filmmaking. During a past job as a product manager for Netflix, Rubin created a Netflix fan community on Ning where he still interacts with fellow film aficionados. Outside of work, he has a private Ning network for his extended family – though he rues that his older relatives aren’t up to speed on Ning features such as photo uploads, video-sharing, forums, personal profiles, and blogs. Rubin even developed a Ning site for a babysitting co-op in his neighborhood.

“Once you know about Ning, [you wonder], ‘how many places can you apply this?,’ ”
says Rubin. “Over the spring of this year, I experimented: I must have made six or seven different communities of different sizes.”

Ning is at the vanguard of a coming shift in the online world. Before, social networking has mostly been contained within sites that are nations unto themselves. You have to sign up to the likes of MySpace, Facebook, and Hi5 to get a passport to fully roam those territories. Once inside those borders, each citizen is confronted with a one-size-fits-all “horizontal” landscape that covers all sectors of society and every demographic, and where each page follows the same basic template. But Ning offers an alternative: It’s an open platform for thousands of individual-looking niche “vertical” networks.

“Ning will continue to gain interest as more and more people get involved in social media and social networking,” says Robb Hecht, an expert on social networking who operates IMC Strategy Lab, a media consultancy in New York. “Previously it was LinkedIn and Facebook and MySpace where the container – if you could call it that – was something that you could become a part of, but you couldn’t actually own, or run, or direct.”

Launched in 2005, Ning, which means “peace” in Chinese, now hosts 358,000 networks. Among them: A gathering point for rock-band roadies, a group to assist Iraqi refugees, a hub for enthusiasts of unmanned aerial drones, and the official David Hasselhoff fan site. Some Ning pages caters to pornography – this is the Web, after all.

If you hadn’t heard of Ning – and most people haven’t – it’s because you’re out of the loop. Out of Ning’s viral loop, that is. The service operates on the exponential principle that anyone who starts a social network will invite friends, family, and associates who, in turn, will bring others on board. In fact, Ning is doubly viral: Some newcomers will also create their own communities.

“We’re not doing any advertising,” says Ning CEO Gina Bianchini, a former investment banker who cofounded the service with Marc Andreessen, one of the creators of the Mosaic browser and cofounder of Netscape. “It’s all being generated virally, which also has the benefit of being – to us – [a way to focus on] product development and R&D, not a big advertising budget.”

Ning’s business plan is mostly based on selling targeted ads to the various niches on its platform. (For $20 per month, individuals can host their own ads.) If there’s a vulnerability it’s this: Some networks are tiny and others are virtual ghost towns. The start-up is leery about releasing data about total numbers of users, but says its largest 250 networks represent around 40 percent of its page views and that 70 percent of its networks have been used in the past 30 days. While Ning’s growth rate is impressive – close to 2,000 new networks per day – it will take more than e-mail invites from each fresh site to attain critical-mass migration.

“Just like a master-plan community of a development of houses, you can build it, but that doesn’t necessarily mean it’s a neighborhood,” says Ben McConnell, coauthor of “Citizen Marketers.” “Growing a community is a big investment of time. The care and nurturing of welcoming people, trying to make them feel welcome, making it easy for them to connect with other people – and then the ongoing challenge of interesting content as a springboard for conversation.”

Mr. McConnell, a customer-retention expert who has a large “Society for Word of Mouth” community on Ning, cites his book’s “One Percent Rule”: Most communities rely on 1 percent of its members to create content. If there isn’t fresh activity to encourage frequent repeat visits, the long tail will tail off.

For now, Ning’s relative ease of use has put its “build your own” platform ahead of competitors such as KickApps, Crowdvine, and GoingOn. But it doesn’t permit users to migrate their networks off its platform. That inhibits Ning’s growth, claims Marc Canter, a leading advocate for an “OpenSocial” Web, and CEO of Broadband Mechanics, a quasi-competitor that custom builds social networks for companies.

“It’s a two-way street,” says Mr. Canter. “If I would set up the wires inside my network to allow a Ning network to move into my world, believe me, I would reciprocate and set up wires from my world to allow people to move to their world.”

Mostly, though, regular Ning users seem to have embraced its relative freedom. “It’s a great business,” enthuses Rubin, the multi-user. “It’s Yahoo Groups on rich media. You can do a lot of this stuff in other places, but they tie it all up in a nice ribbon and make it very easy to do.”

Facebook thinks Tom Ham and I should be friends. But we’re not. In fact, I’m pretty sure he can’t stand me.

I ticked off the guy more than five years ago, and we haven’t spoken since then (more on that later). But he pops up with disquieting frequency on the “People You May Know” box at the right side of my Facebook page. Facebook compares your mutual friends to suggest connections with people you might not have thought to connect with. The program is called the Friend Finder.

But I call it the Foe Finder. Tom Ham appears there all the time. I don’t really blame Facebook for causing me brief moments of anguish each time it throws up its postage-stamp-sized reminder. Tom and I do have 69 “friends” in common, many related to the video game industry that we both cover. The program is saying, “Look! You like all the same people, so this guy has GOT to be your soul mate!”

This seems to be a common issue among members of Facebook and other social networking services that use computer algorithms to help connect people. For example, LinkedIn, a professional networking site, looks through your online resume to suggest people who worked at the same company while you were employed there. Never mind that it might be the boss who fired you for bringing plants to your cubicle.

When machines do the matchmaking, funny things happen. An acquaintance in San Francisco kept getting paired up with a landlord who evicted his family for refusing to pay an outrageous (and illegal) $1,000 raise in his rent.

Then there are the people …

… who are already on your friend list but turn out to be scheming snakes. One of my friends found out that a colleague had lied to him about a job opening. He’d gladly wipe this person from his Facebook page, but that would cause a minor scandal because the two have a zillion mutual colleagues.

Of course, you can also drop the nuclear Facebomb and ban individuals from seeing your profile. I did this once for an ex- whose very picture made me ill. But I’ve otherwise resisted pushing the red button just so I can see how this online social petri dish evolves.

Anyhow, back to Tom Ham and what I did to earn his disdain. A few years ago, I wrote a story for The Times about “playola” — the junkets and trinkets that video game critics were regularly showered with by companies hoping for a favorable review. Tom was among the top reviewers in the field at that time, and I featured him in the story. He stopped talking to me after it ran. I imagine that my profile picture keeps appearing on his Friend Finder, which can’t be much fun. I e-mailed him to ask him whether it does, and how he feels about it. Not too surprisingly, he didn’t respond.

But I can see some benefits to this Foe Finder thing. An ex-boyfriend I hadn’t talked to for more than 20 years found me on LinkedIn and asked to be in my network. I added him.

As one of my bona fide friends advised, “Keep your friends close, your enemies closer.”

– Alex Pham

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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Last November, when Google launched Open Social we asked readers if Facebook would join Google’s platform. The results were split right down the middle, but as we get farther from the Open Social launch, and the two sites continue to launch competing APIs (Google FriendConnect vs. Facebook Connect, for example — the former banned by Facebook), that seems less and less likely. This is becoming a social networking cold war according to Duncan Riley.

Even though the battle for social networking supremacy is a fight between Facebook and MySpace, the social networking arms race is really being played out between Facebook and Google. Google has demonstrated the unique ability to bring rival social networks together around its proposed open standard APIs, such as Open Social, FriendConnect, and the Social Graph API. Google has built up its own little iron curtain with MySpace, Yahoo!, LinkedIn, Ning, and the Google-owned Orkut to prop up its open source platform initiative. (Don’t bother trying to follow the Cold War analogy all the way through — it doesn’t really work.)

Facebook is now planning to follow Google’s lead and open source their platform. Previously, Facebook’s platform technology only powered an app development platform on one site outside its own — that of rival social networking site, bebo (recently acquired by AOL). An open sourced platform means that any social network could implement Facebook applications. More details should emerge in the next couple of days, according to TechCrunch, who broke the story.

Two questions immediately spring to mind following this news: 1. Does this help users? 2. Do platforms even matter?
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