Decentralized social networks seem to be the talk of the town these days (in tech circles at least). Blogger Robert Scoble has given attention and created a minor scandal of a Facebook policy that forbids the use of scripts to extract data from Facebook Web pages (Note: Facebook just recently allowed accounts to be closed). Around the same time project DiSo has started with the goal to build a decentralized version of Facebook based on the open source WordPress personal publishing platform, and workgroup DataPortability.org has kicked off to define best practices to make personal data easily movable, reusable, remixable, etc. across Web services. Just two days ago at his Northern Voice 2008 keynote, Matt Mullenweg, creator of WordPress, seemed to be almost hinting at what his company was up to with their recent $29.5M round of funding: a better, open-source alternative to closed social systems like Facebook that would use social filters to bring more relevant content.
As I mentioned in my previous post on business platforms of Web companies, one key aspect of these business platforms is that “they retain control over who gets to see the information and how”. Having a point of mediation is an essential part of online capitalism. Without it, there is no point of value extraction and no big business.
The natural question then is: if so many techies are excited about the inevitable advent of decentralized and portable social networks and related personal data, and if that means essentially that there is little point of control anymore for these Websites, how are businesses going to make big money out of this?
If we put aside the ad-based revenue model that Matt M. does not seem to keen on, as well as the “pro account” business model that would expand on some existing commercially available pro services, as well as the usual ways of making money with open source, here are two models that I think could work:
- Relevancy services: This is would be an expansion of services such as Akismet, WordPress’ spam filtering service, which is currently free for personal use. Matt insisted strongly in his keynote how content relevancy (i.e. no spam) is really what users value, and how spam from bad users is what kills social systems. Perhaps a high-quality filtering system that would combine the Akismet filter and a social filter (a filter based on your social graph) is something people would be ready to pay for.
- The ring tone business model. This model consists in deriving transaction fees from digital goods sold on WordPress.com, such as themes and widgets. Because WordPress.com knows which blogs use which themes and widgets, this would be easily done there. It may be a bit harder for users of the WordPress open source software itself. This would be the equivalent of the ringtone business. Matt Mullenweg revealed himself that “People want their online presence to be an expression of themselves and in that regards, being able to customize the design is critical”. Matt even compared a blog as a locker, which are typically heavily personalized.
This list does not mean to be exhaustive, but seeks only to start a discussion on a subject that is getting more and more relevant. I would be curious to see what others think.