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Feature: Facebook, MySpace & LinkedIn exposed

The year ahead in social networks

In the fast growing world of social networks, the past year belonged to Facebook. The fast-growing social-networking site made headlines at every turn. Its CEO boldly turned down a billion dollar offer from Yahoo, a rebuff once believed foolish but later validated by Microsoft offering up $240m for 1 percent of the company, valuing Facebook on paper at $15bn.

But the year didn't end well for Facebook. Its Beacon programme, which allowed advertisers to broadcast the purchase of a Facebook user to that person's friends, angered privacy advocates. The lack of an opt-out feature drew the ire of progressive political groups like MoveOn.org. The incident caused Mark Zuckerberg to tuck tail with an apology to his approximately 55 million users a week ago.

But after the New Year, expect Facebook to hunker down, says Oliver Young, a Forrester analyst. "They're going to settle down and crystallise a lot their innovations around advertising," he says. "They need to monetise more of the users they have."

While analysts say it's unrealistic for people to expect Facebook's influence to wane in 2008, the company's main competitors, LinkedIn and MySpace, are by no means dead. Expect them to rev up their operations to grab more users and advertisers in the consumer space. Analysts expect to see greater innovations in all three of the big social networks around the third-party applications that run on top of social networking pages. And some of these applications, they hope, will hold value for the business user.
Here's a look at what to expect in terms of their business goals of each social network and the technology surrounding them.

Facebook: Don't Alienate Users



The Key for 2008: Make Ads Pay: The past year has been a whirlwind for Facebook, and it's time to think how it can start turning substantial profits (for real; not just venture capital investment). Beacon, while a botched attempt at leveraging the power of Facebook's vast social network, was the first step. In 2008, Forrester's Young expects more advertising initiatives.

In addition, the company must show a consistency in its business model that makes advertisers comfortable to do business with it (the erratic Beacon was a misstep they won't want to repeat). "If they continue to really change things so dramatically, it's difficult for advertisers to figure out what they're doing and what they get from doing business there," Young says.

Technology: Make Widgets Matter: When Facebook opened up its platform to third-party developers in late May, it saw an explosion of applications to run atop the site (known commonly as widgets). But picking out the applications that are business worthy can be pretty tricky. The majority of applications have trivial uses, such as people sending each other fake hamburgers and drinks over a widget; they don't do much to boost productivity.

According to Stowe Boyd, a Web 2.0 expert who runs a consultancy, The Messengers, and pens a technology blog, we might expect to see developers start creating apps that serve business purposes. "Creating ones that will be more professional in their orientation will be important," he says.

The bottom line: As Facebook's user base becomes both a consumer and business channel, it needs to provide useful services that advertisers will want to support.


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