It’s not that Katz, founder and CEO of travel recommendations site Gogobot, has doubts about the quality of these products. It’s that the answer “depends very much on who is asking the question.” And according to speakers at the recent Wharton Global Alumni Forum in San Franciso, Calif., that basic fact is at the root of the next wave of disruption to hit the Internet.
“Web 2.0 was centered on user-generated content, where anyone could be a publisher. We’re now in the third wave—I call it a social wave,” said Katz, a former MySpace executive who served on a Forum panel titled “New Directions for Social Media.” Also on the panel were Ethan Beard, Facebook’s director of platform partnerships; Wharton Digital Press executive editor Shannon Berning; entrepreneur and Lotus 1-2-3 designer Mitch Kapor; and Bryan Srabian, director of social media for the San Francisco Giants.
The Web has grown to the point where “there’s too much information,” according to Katz. “Finding ways to filter out information and find what’s relevant to you is getting harder and harder. The model of Google doesn’t work at scale—especially when it comes to things where taste matters.”
Katz predicted that the future of the Internet “is one where every page is going to be personalized. If you plan a trip to Paris, you shouldn’t see search results listing 900 hotels. You should see six hotels based on where you stayed before; the places you checked in at on Facebook and Foursquare, and the places where your friends have stayed. It’s not something that’s just relevant to travel; it’s something that makes sense for almost every part of the Internet.”
A fundamental shift is taking place online, from an information-based Web to the “people Web,” said Beard, who works with partners integrating Facebook’s platform and the Facebook Connect service into their sites. In the first decade of the Internet, “if you looked over the shoulder of two people looking at CNN, you would see the same page. The Web was also very much about topics. If you wanted to know the Giants score, you went to ESPN, if you wanted to know the weather forecast, you went to The Weather Channel. You basically knew what you were looking for—you just had to go out and find it.”
Today, people are no longer surfing the Internet anonymously. More than 250 million Facebook users log on each day, and each of their pages looks completely different, Beard pointed out. “There’s a shift to focusing online activity around relationships and around people. It’s not what everybody thinks is the best cheesesteak; the one or two answers that are important to me are coming from my friends, rather than the anonymous masses.”
At Facebook, the phenomenon is referred to as “social design,” and Beard said there’s no better example of its power than the site’s photo application. When the service launched five years ago, its competitors included sites that offered features such as red-eye reduction and the ability to resize images. “Our photo application had none of those; you can’t do anything practical on Facebook photos. But the one thing you can do turns out to be the most interesting—you can tag a friend”—i.e., identify people in photos and share the photos with friends.
Although Beard argued that Facebook is “helping people build out what identity looks like” on the Web through its applications and the sharing of its platform with other Websites, the company has also drawn criticism for the ways that it employs users’ personal information and the often-confusing steps required to opt out of certain applications, including a recently introduced facial recognition feature that automatically tags people in photos. “Prior to Facebook, the Internet was either open or closed; it was either email or the Web,” Beard said. “We still have a long way to go. Every time we add features to the site, it adds complexity, which requires us to add privacy controls.”
No social, no viability
What does the Internet’s “social wave” mean for tech start-ups or the sector’s more mature companies? “Whenever we use the word ‘disruptive’ in the business we’re in, that’s a positive thing,” Kapor stated. “At this point, it’s old hat to say that social media is a disruptive innovation. When there are low-friction ways for people to interact directly with each other based on their real identities, it is a revolution.”
Kapor developed his perspective based on experiencing successive eras of development in the tech industry. In 1982, he founded the Lotus Development Corp. and designed Lotus 1-2-3, a user-friendly spreadsheet program that has been called the first “killer application” for the PC. Later, he became chairman of Linden Lab, a San Francisco firm that created the online virtual world Second Life.
Today, Kapor invests in seed-stage information technology start-ups with an eye toward firms with the potential to make “some degree of positive social impact.” Several of those investments have been in the education space; all utilize social media. For example, Piazzza is an online study group community designed to allow students and instructors to exchange questions and engage in discussions related to specific classes. MIT and Stanford are among the schools currently using the service.
“The number of hours per evening that students were using this was completely off the charts,” Kapor said. “The lessons we can draw from that are that almost all applications are going to have a social layer to them. We’re still going to be living in a world where one size does not fit all. There will be both broad platforms like Facebook, and verticals in lots of different areas like e-commerce, travel and education. But if something isn’t fundamentally social, it’s not going to be viable.”
To that end, even established players like Google are trying to gain a foothold in the social media space. After failing to gain traction with Google Wave or Google Buzz, the search company’s latest effort, Google+, debuted. In response to a question about why Google hasn’t yet developed a social application with staying power, Beard, who was the firm’s director of social media and head of new business development before joining Facebook, suggested that the company’s culture might play a role.
“There’s a fundamental difference between Google and Facebook in how the products are designed and in how the design process takes place,” he said. “Google is very academic. Some of the greatest thinkers in computer science now work at Google. The design process is focused on building a really cool back-end that sifts through the data and pops out the result.”
Beard described Facebook as having more of a “hacker culture,” in the sense that “instead of working on the back-end and throwing up any front-end, we start with the designers and say, ‘What if a user saw this on the front end?’ and then ‘Okay, that’s good, now go build the back-end as fast as you can so we can start to play with it.'”
How, not why
As tech companies try to build social applications that click, the business world at large is struggling to figure out where and how social networks fit into their overall marketing and customer relations strategies. “The question is no longer ‘Why?'” Beard noted. “The conversation has shifted into, ‘How do I do this and how do I do it well?'”
Katz agreed, adding: “If you are in a consumer-facing business, you need to be on social media because people are talking about your business, and you need to know what they are saying, and you need to be solving problems.”
Listening is one of the key aspects of the social media strategy for baseball’s San Francisco Giants, according to Bryan Srabian, who directs the club’s efforts in that area. He manages the team’s Facebook page and is the voice behind its Twitter feed, @SFGiants.
A defining moment for Srabian in understanding the power of social media is when he was able to have a conversation via Twitter with an author he admired. “If we can have that relationship online, if we can interact with the fans, we can establish a voice as customer service representatives or concierges. We can have a relationship that we’ve never been able to have before. It’s always been a broadcast medium of us telling you to come to the game or buy tickets. Using social media, we can answer questions and have real conversations.”
The Giants established a presence on Twitter and Facebook because fans were already using the sites to talk about the team, follow the games and share photos. The company’s strategy is still evolving, which Srabian believes is true for most companies. “Things are moving so quickly that the minute we think we’ve figured something out, new things come up,” he said. “The biggest challenge has been the immediacy of things that happen that are then reported via players, fans and even reporters trying break stories before their official media outlets so that their Twitter handle is on it as opposed to the media outlet. It’s raised many more questions than answers, but we’re learning day by day.”
Although a common lament among companies is that interacting with consumers via social media means giving up a measure of control over brand strategy, Katz argued that many firms are fooling themselves in that respect. Echoing a comment he heard from the CEO of JetBlue, he noted that “social media eliminates the illusion that you actually have control. Companies always thought they had control over a brand and control over the message because they weren’t hearing the conversations that consumers were having. People are always talking about your brand in ways you can’t control.”
Author: Knowledge@Wharton
