All Things Digital

The problem Google (GOOG) is having monetizing its inventory of News Corp.’s (NWS) MySpace pages may have more to do with faulty algorithms for ad serving than it does inherent issues with social networking sites.

That’s the conclusion Pali Research analyst Richard Greenfield reached in a research piece today on News Corp. “While everyone is blaming social networking as the culprit for Google’s MySpace monetization problems, the real problem is Google itself and its search algorithms for social networking,” he asserts.

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It should come as no surprise: Incumbents are beginning to act like incumbents. But while the cable companies are the first ones to jump on the tiered-broadband bandwagon, they won’t be the last. Their argument for limiting bandwidth and data transfers based on price sounds like a good idea, especially as a way to get bargain hunters to buy. In the long run, however, tiered broadband is a terrible idea that will bring the innovation inspired by flat-rate broadband to a screeching halt.

Flat-rate broadband–however cheap or expensive (depending on your point of view) it might be–inspired the formation of Skype, YouTube, Facebook, Apple’s iTunes and MySpace, amongst others. It allowed us to freely experiment, to embrace both the applications and the ideas they represented, such as VoIP, online video, digital downloads and social networking.

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Over the last five years I have been asked countless times: “Steve, what’s the next hot online community?” It seems as though everybody is on the lookout for the successor to MySpace, Twitter or Facebook. Nobody, even in a difficult economic climate, wants to be viewed as a latecomer.

Perhaps as a defense mechanism to avoid being wrong myself, I now give a boilerplate answer that I believe can last. In short, the next big community is not a single destination. Rather, it is going to be everywhere. To paraphrase Forrester analyst Charlene Li, social networking is becoming “like air.”

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Marc Andreesen, the co-founder of Netscape, met Sen. Barack Obama in early 2007. Mr. Andreesen recalls, “In particular, the senator was personally interested in the rise of social networking, Facebook, YouTube, and user-generated content, and casually but persistently grilled us on what we thought the next generation of social media would be and how social networking might affect politics–with no staff present, no prepared materials, no notes. He already knew a fair amount about the topic but was very curious to actually learn more.” As a social organizer and a lover of new technologies, Mr. Obama could be expected to make good use of such tools in getting elected, and he has done so. What may not be as obvious is that Mr. Obama appears to have a keen interest in using such technologies in the act of governing.

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Starbucks is turning to social networking and hoping its customers will help it out of its current slump.

But maybe Starbucks has a problem it can’t solve with technology or anything else. I had lunch the other day with iconoclastic economist and author Tyler Cowen. We got talking about Starbucks, which Cowen suggested has been so successful in large part because of an aura it created–not because it ever had better coffee. Starbucks was a cool new thing, he said, and it grew rapidly to take advantage of that image. But the rapid growth now becomes Starbucks very undoing–because by definition, if you’re huge and omnipresent, you can no longer be the cool new thing.

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When is a social network NOT a social network? When it’s part of Ning’s 200,000 social networks! Give me a break, Gina and Marc! STOP bragging about how many people have clicked and created a network. How come you have NEVER posted anything on: how many networks have five or more people in them? How ’bout 50 people in them? Or 500 people? Bragging about 200,000 networks with one person in them is absurd. And I don’t even care if they’re porno networks or not! But they’re NOT networks if there are less than what? Five? 10? 25 in them? You’re obviously pimping yourself up for a sale. Give us all a break–please!

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Clouds are gathering over Silicon Valley’s consumer Internet companies. The sale of social-networking company Bebo comes at a time when private investors are changing their tune. They’re no longer pumping money into start-ups at the same huge valuations they were doing last year.

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Poor Bebo. I feel for the residents of their hip and convivial apartment block. It has just been bought by a slumlord.

AOL–which is paying $850 million for the social-networking site, the other Facebook–is where innovations go to die. Remember Netscape? Bought for $4.2 billion and now dead. AOL bought a mess of advertising platforms–Advertising.com, Quigo, Tacoda–and can’t make them to get along.

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Facebook is reaching out to the major labels and scheduling meetings to discuss the potential implementation of a music-acquisition service with the popular social-networking site, Billboard has learned. Sources at multiple major labels say discussions and meetings regarding the potential service are taking place this week. The sources tell Billboard.biz they expect something similar to the music service MySpace reportedly is working on, though details of Facebook’s exact proposal remain unclear at this point.

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Call it Gruntbook. As part of its long-term effort to pioneer “network-centric warfare,” the U.S. military has rolled out a social-networking system for soldiers in Iraq. Called the Tactical Ground Reporting System, or TIGR, the system was developed by DARPA, the same Defense Department agency that spearheaded the creation of the Internet 40 years ago.

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Microsoft Chairman Bill Gates has stopped using the Web site Facebook, the most damning indictment in a week full of bad press for social-networking technology. Social-networking Web sites, which help people share and find information about one another, were supposed to change the way people use the Internet and the way we work. But lately, all we’re hearing about are the problems.

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It’s hard not to be a little nervous about the Google generation, what with kids these days. Look at them, charging off into one discomfiting trend after another–their YouTubing, their texting, their wanton social networking. To read the news, you’d think they were hiving off into a subspecies, raised with data ports in their heads meant to be plugged into Facebook at the age of 6, from which point on they will expertly recite the collective wisdom of Wikipedia with a steely look in their eyes.

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Ever wondered whom Albert Einstein would “poke,” or what Charles Darwin would write on creationists’ “walls”–had such famous characters lived in an era obsessed with social-networking sites like Facebook?

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