Market Update: Smoothstone Aims for the Enterprise

Michael Vizard

At this point, it's pretty clear that an oligarchy consisting of Facebook, Twitter, LinkedIn and eventually Google dominates the social networking landscape. There is, of course, a second tier of social networking players, most notably Yahoo, Microsoft and AOL. In addition, we're starting to see what might be viewed as a vibrant third tier of social networks that are dedicated to specific areas of interest, such as Groupon in the case of coupons or CheckSwing for baseball fans. But from a sheer volume standpoint, four social networking entities currently account for the lion's share of all social networking activity in the U.S.


From a business perspective, that's a little troubling because it means that companies trying to reach customers on these social networks could very easily find themselves held hostage by any or all of these companies, which is one reason why open application programming interfaces are so critically important.

 

Unfortunately, not every one of the major social networking companies sees it that way. From their perspective, the social network, along with all the data and information it contains, resides inside their walled garden. Some companies have been capturing that information as it relates to them in a separate warehouse for the purpose of running analytic applications, but that's an expensive proposition.


What would benefit most companies that do business with these social networks is a rich set of open APIs that would make it easier to analyze and identify trends hidden in the metadata these companies collect, which should be made available via so-called Social Graph APIs. To various degrees, each social network makes one of these APIs available, but there is no standard approach.


The interesting news is that some social networks have come to view social graph APIs as an opportunity to attract more applications to their platform in the hopes that those applications will attract more users. For example, Viadeo, a social network that competes most directly with LinkedIn, recently announced that it is making available an open Social Graph API that developers can leverage to create applications for the Viadeo network. Viadeo in the U.S. only has a couple million members. But it also operates social networks in China and Europe that bring the totals number of people on its social networks up to 35 million. On a global scale, this makes Viadeo a solid second-tier social network. To facilitate adoption of that API, Frederic Leroy, head of API for Viadeo, says the company decided to create a contest with a $20,000 prize for the developer who creates the most interesting application.


All this matters to IT organizations because every social network is a platform for building and deploying applications that tie your organization more closely to your company's offerings. In addition, those APIs are a critical tool for getting people on one social network to sign up for another, which in many cases could be a third-tier social network managed by your company. The biggest challenge in creating any social network is developing the audience, which means any social network that makes use of an open social graph API is signaling its willingness to help developers first build targeted applications that promote either specific services or a third-tier social network as part of a larger effort to create a federated social networking environment that doesn't try to confine people to a particular walled garden. Without open APIs, it becomes relatively easy for a social networking platform to hold a business hostage by determining who gets preferential access to what information about its members. There's nothing illegal about that, but in the long term concentrating that kind of power in the hands of four major social networking providers is not going to be good for business, which is a very good reason why many businesses should roll their own social network.


When it comes right down to it, the whole conversation around APIs on the Web is probably the single most important business issue on the Web today. Unfortunately, it's an issue that is wrapped up in a lot of technical jargon that winds up shielding the significance of the conversation from business executives who, once enlightened, would probably become a lot more aggressive about protecting their long-term business interests if only someone from IT would take the time to explain to them how important APIs on the Web are.



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