What business model for decentralized social networks? decrypting Matt Mullenweg’s recent keynote

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.

Matt Mullenweb at Northern Voice 2008

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.

Trying out Yahoo! Shortcuts

Yahoo! Shortcuts is a new service launched by Yahoo! on or around December 13th 2007. Yahoo! Shortcuts make it easy for bloggers to link the content in their blog posts to Yahoo! resources, such as maps, products for sale or stock quotes.

The interesting part of Yahoo! Shortcuts is in the WordPress plugin provided to insert these links. The plugin detects things as you type your post, and allows you to link them to Yahoo! resources. In this page, all these dotted underline links are Yahoo Shortcuts you can try out by passing your mouse pointer over. Examples include addresses (1600 Pennsylvania Avenue NW Washington, DC 20500), products (Garmin Nuvi 660), and companies (Apple).

Whenever a “Shortcut” is found, the Y! Powered Shortcuts widget is updated with the number of Shortcuts found. Also, the text of the shortcut is markup like: <span id="lw_1202511969_3" class="yshortcuts">Apple. The last digit of the id seems to be the number of the shortcut, and the number “1202511969” seems to be an id that is unique to the post. It’s worth noting the cryptic nature of these tags: there seems to be no way to tell that a particular shortcut is an address or product or company name.

The Yahoo! Shortcuts WordPress widget

I also noticed that it seems that when an entity like Apple is mentioned several times, it is only detected once. I guess that this is to avoid cluttering the post with tons of shortcuts.

The next step consists in reviewing the post. For each Shortcut detected, it is possible to remove it, convert it to a badge or keep it as a link (default). A badge means that the Yahoo! content will be embedded in the page itself. A link means that the Yahoo! content will appear when the link is hovered.

The Yahoo! Shortcuts WordPress post reviewing page

I have to say I’m quite impressed with the annotation technology. “999 Mission, San Francisco” is not detected, but “999 Mission Street, San Francisco” is. “123 Mission St, San Francisco” is as well. There seems to be support for detection in other languages as well: 150 rue saint-jacques, paris was detected correctly for instance. I imagine that this technology is the same one I noticed Yahoo uses in Yahoo! Mail to detect emails, phone numbers, addresses, events, etc. The FAQ also mentions that there are ways to improve the chances of the service detecting some objects, which gives credit to my “plain old english formats” theory (more on this hopefully in a coming post).

One current limitation of this technology is the detection of the relations between individual pieces of data. For instance, in Yahoo! Mail, if I have a phone number next to a name next to an email, the email and the phones will be detected as individual pieces of data, and I will be given the possibility to create a new contact for the phone number or to add it to an existing contact. This would not be an issue with a microformatted hCard, but writing an hCard today requires more skills and time than writing plain english.

On the usability side, from a post writer standpoint, I think the whole thing is pretty well designed although it would be nice to have the post reviewing step integrated in WordPress editor (TinyMCE).

The main issue I see is from a reader standpoint: they have no choice as to what to do with the detected content. The only thing you can do with an address is to look it up on Yahoo! map or search related Yahoo! news. For a company, the only thing you can do it to look its stock performance on Yahoo! Finance or search for it, etc. But of course, that is the whole point for Yahoo!: drives more traffic towards Yahoo! properties. I also don’t know if the licensing terms allow the style to be changed (technically, it seems it’s possible since all the style-related files are part of the plugin), but I think that would be a necessity as these Yahoo badges may not satisfy everyone’s taste and may repel some users and change their perception of the quality of the blog.