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Social networks are having difficulty generating advertising revenue (more discussion). Search is valuable for advertising because ads can help users get what they are seeking in their search. On social networking sites, users primarily engage in presence-oriented communication. If ads in those circumstances are even noticed, they are mainly an undesired distraction.

Social networks need to encourage their users to generate ad-relevant circumstances. Recommendations from friends is a major influence on purchasing behavior. The challenge is to organize "recommendations from friends" within social networks so as to add value to those recommendations and not undermine the non-instrumental quality of friendship. Doing this may require social networks to integrate into more field-specific sharing of information.

Consider a dining record service. Users would be provided with tools to build a database of what, where, and when they ate out in a restaurant. Users are likely to find this much easier than writing a restaurant review. Moreover, users are more likely to recognize the value to themselves of creating a record of their dining activities. It would be like the highly successfully LibraryThing, but instead of what you have in your library, this service would be about what you've put in your stomach.

A social network with a large number of users would a valuable asset for building a dining record service. Many web entrepreneurs could easily create a dining record service. But database scale (e.g. for identifying local patterns of taste) would be a key competitive advantage. Social networks could help build scale for a dining record service because dining together is such a socially significant experience. The total number of meals eaten together is probably one of the best indices of real friendship. Not inviting someone to dinner, and then plotting to make sure that they know they weren't invited, or that don't learn that they weren't invited, is ubiquitous social drama. Social networks have the sort of tools for enabling, sharing, and managing that social drama.

Dining record pages would be valuable action inventory for advertising. A user creating or reviewing records about where she or he has eaten would probably value advertisements about other places to eat. She or he might then also value diet ads. And exercise ads! The more you exercise, the more times you can go to that favorite restaurant of yours.

To be successful, social networks may need a more integrated and specialized information organization than widget-based applications can deliver.

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How has YouTube succeeded? YouTube makes uploading and sharing videos free and easy. It has hosted some popular high-quality clips and stimulated calls for a copyright-brawl-of-the-millennium. These are well-recognized aspects of YouTube. But consider the outpouring of sympathy for Martin. YouTube has also succeeded as an innovative communications service.

Social networks and communications services are closely related. Robert Young, an insightful industry analyst, recently noted:

communications ultimately serves as the anchor feature and the driver of retention and growth. …when dealing with an online community, that one lasting activity is almost always communications. … Social networks, which are rapidly becoming the portals of the next generation, must place high strategic priority on their communications functionality if they wish to continue their pace of traffic growth, usage, and retention.

Mirroring this remark, Norman Lewis of Orange, a mobile communications service provider, suggested at the Telco2.0 Industry Brainstorm:

Any future applications which do not have a social networking aspect to them will be irrelevant. If we don't understand that, we won't have a business in the future.

YouTube shows communication service providers that video can be important driver of communication. On the other hand, sharing video, like providing VoIP, is a service that many providers potentially could offer. If YouTube doesn't link itself closer to enduring real-world social networks, it may not have a business in the future.

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