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As Dave McClure reports in his incisive post on OpenSocial (http://500hats.typepad.com/500blogs/2007/11/google-open-soc.html): 

“RockYou & Slide…are social networks of their own.”

He goes on to say that their support of OpenSocial will be a signal as to how important OpenSocial will be in the coming Social Operating System wars.   I agree with his analysis that RockYou and Slide are the canaries in the coal mine (although I don’t think they’ll die if OpenSocial runs out of oxygen).  And now, with MySpace announcing support of OpenSocial, it is clear that RockYou and Slide and all other major facebook app players will be forced to quickly port their apps to OpenSocial (after all, “Why not get as many incremental users as possible for apps that you’ve already proven are hits with end users?” and/or “Why let someone else write “Top Friends” or “Zombies” for OpenSocial?”).

However, I think that Dave got very close to what is the real impact of Open Social on Slide — but didn’t go quite far enough.

 The advent of OpenSocial means that there will be a host of easily portable apps which had previously been locked into the much more difficult to clone API of facebook.  Assuming Google’s money and MySpace’s users are attractive enough to justify OpenSocial as the SECOND Social Operating System for which to target an app, we now have the prospect of OpenSocial spawning lots more stand-alone Social Operating Systems all vying for user’s attention. 

The FIRST UNINTENDED CONSEQUENCE of OpenSocial — Social Network Proliferation

So, I predict Slide will soon take the 20+ million users of Top Friends on Facebook (which makes them the 3rd largest US Social Network) and create a stand-alone Social Network that has its own web site (perhaps powered by Ning or built on their own software).  This Social Network will support all of Slide’s widgets and any OpenSocial gadgets that get written.  Unlike Orkut or Plaxo or Salesforce, TopFriends may have enough of a snapshot of the Social Graph to be a contender against Facebook.  It will also have the advantage of pulling users from MySpace based on the large penetration of Slide widgets in that environment.
This strategy will quickly be picked up by RockYou and the race will be on to see which of them can build a true #3 US Social Network.  I had been calling this the “Fox in the Hen House” strategy when I was predicting that either Slide or RockYou would be acquired by Google to provide a method to siphon users out of Facebook and into Orkut or some other platform.  However, with OpenSocial coming about, and guessing that Max Levchin wants to prove that PayPal was no fluke, I think that Slide will go it alone and try to create a true Facebook competitor.  Max knows Peter Theil better than Mark Zuckerberg knows Peter and I’m betting the team at Slide is envying Peter’s $1 to $5 billion stake in Facebook (depending on whose valuation you use) and believes they are as smart as Mark.

The SECOND UNINTENDED CONSEQUENCE of OpenSocial — The MySpace and LinkedIn Exodus Apps

I don’t think when MySpace reluctantly signed up for OpenSocial (perhaps incentivized with quid-pro-quo payments or ad rebates from Google) that they realized that doing so would make it infinitely easier for a smart 3rd party (or Facebook itself) to write an MySpace Exodus App. 

Once MySpace fully supports the OpenSocial API it will be possible to write an app that would coordinate an individual MySpace user’s attempt to convince his/her friend group to pick a moving day when they will all transport themselves over to Facebook (e.g., “Beam Us Up, Facebook”).  Given that Facebook is the REAL THING and the WINNING NETWORK based on it being the one place that offers authentic, user and system-verified identities, it is clearly the place that most users will ultimately use to maintain their primary online identities.

So, the MySpace Exodus App (which is certain to be one of the first written for the platform) will be able to easily dive deeply into a user’s friend list and alert them all to their coming moving day.  Once a critical mass of the user’s friends have agreed to the moving day, then the app can take care of the dirty work of getting everyone’s MySpace profile data and widgets and friend connections shifted over via a corresponding Promised Land App running on Facebook. 

Little did Google know that their actions in pushing OpenSocial puts them in Moses role, crying to the MySpace (and LinkedIn)  pharaohs, “Let my People Go” …. to Facebook.

The THIRD UNINTENDED CONSEQUENCE of OpenSocial — Lawsuits based on Facebook’s NewsFeed Patents

As Dave McClure has been preaching for some time, the real key to Facebook’s utility is their permission-based, algorithmically optimized, personal-action monitoring, newsfeed.  This innovation (and I predict the basis of several inventions) will turn out to be the true genius and defensibility of Facebook (like PageRank was/is for Google).  Although it is not the key to their monetization, it is the fuel that powers the word-of-mouth (or as I call it “the word of mouse”) engine that ensures the viral spreading of and high level engagement with anything useful that is discovered in the facebook eco-system.  Although “activity feeds” may exist in other systems and an API can be created in OpenSocial to submit items to it, my $64 billion question is:  Which of all the OpenSocial partners are going to be in charge of deciding the specific subset of items that make it through to a given user’s newsfeed?  Does Google get this right?  If so, they will be the one sued by Facebook for billions of dollars for violating the upcoming Newsfeed Patents.

The reason I’m confident several patents were filed and will ultimately be granted is that facebook is the first company in the world to encounter a very specific problem related to managing a Large Social Network Newsfeed — specifically too much news to print.  Unlike other environments without a critical mass of users, Facebook had to decide how to feed only “the important” items into your and my newsfeed.  The data I’ve heard is that only 1 in 500 items that could be of interest to me actually makes it into my feed.  While I don’t know (and probably don’t care) what is left out, my sense is that Facebook mostly gets it right.  In addition, Facebook is likely the first company in the world to develop “newsfeed tuning controls” for their users like me based on which of my friends I really want to know more about and which I’m less concerned with.  They also have created a new type of “Sponsored Newsfeed” item (i.e., a CPM or CPC ad) that is woven into this highly valuable stream of data that has my full attention.  Unlike the rest of the ads on facebook, I’ve heard that these types of ads have between 4% and 25% click-through rates!!!

Each of these newsfeed-related areas represent HUGE CHALLENGES from legal, financial and technology perspectives to the OpenSocial confederation who have joined forces to create an Axis of Engagement that will attempt to combat the existing Facebook / Microsoft alliance.  In the case of Facebook / Microsoft, it is clear that facebook is in charge of all their user interface decisions and related technology and Microsoft’s sole role is to assist with ad monetization.  In the case of OpenSocial, I predict a battle royale deciding who gets to sell ads in OpenSocial and who gets to control the newsfeed.  Google will clearly want both of these roles, but why should MySpace and LinkedIn give up these crown jewels?

For that matter, what stops Microsoft or Yahoo for vying for the right to sell ads and manage the newsfeed algorithm in OpenSocial?

Talk about a Fox in the Hen House. 

(c) 2007 Altura Ventures LLC