MyNet Social Networking Summary Nov9-2007

MyNet

Project on Social NetworkingPekka Pärnänen, Maria Pienaar – FinNode/Finpro Silicon Valley

Riku Mäkelä, FinNode/Tekes Silicon Valley

Nov-08 MyNet Duo Project on Social Networking 2

Agenda

MyNet project background Information Collected Main Trends in Social Networking Services Social Networking Business Models Social Networking Services Ecosystem Industry Examples Business Opportunity Map Summary


social networking opportunities

Situation:– Social Networking is the hottest phenomena in Internet right now.– US is the biggest Social Networking market – Tekes is planning to target funding into media space.

• MyNet project tightly connected & providing insight

Solution:– Joint effort with Finpro & Tekes:

• DuO MyNet – social networking opportunities study January 07 – Oct 07• Tied to and high priority as a Seed Project for FinNode, Finnish Innovation

Center in California.– Market opportunity/need/pull approach, not ’traditional’ technology push.– Combining the latest in research and in business – Bringing the Finnish players and US players on the same table

• business and research, speaking opportunities, meetings/tours, seminars.

Geographical Interest:– Main focus is in US because of the main players.

MyNet

MyNet

M

yNet

-pr

ojec

t, 1

0 m

onth

sS

PIN

N-O

FF

pro

ject

s12

-24

mon

ths

LBS

FinnishInfrastucture

-match-makingof key people-speakers to

major US events

US Access-2-3 events-connections to key players- opportunities

Information

Exchange /

Awareness-Match-making

-Market pullopportunities

-VC

Technology /Research

Collaboration-Industry-Research

models-Established

companies in US

Ideasto Finland

-1-3 cases

Joint Finpro & Tekes NETWORKS – in US and in FinlandMai

n de

liver

able

sD

ynam

ic p

roje

cts

/op

por

tuni

ties

gen

erat

ed

Lo

ng

-te

rm f

ocu

sed

mu

lti-c

lien

tp

roje

cts

ge

ne

rate

d f

rom

MyN

et

pro

ject

- teamwork / team building

MyNet

Next Steps / Spin-off Projects

MARKET OPPORTUNITY MAP

Mobile Content Services


The goal is to find Market Opportunities!

Information Collected

Trends Business models Opportunities (biz, collaboration, funding, reseach, …) What have been the eye openers Timing, when and what Ecosystem, now and then, how will it change/develop Community relationships & collaboration How to build visibility, viral aspects Legal aspects, ownerships Copyrights, DRM Mobility, when would it happen and how, convergence Technological barriers, change Other barriers, mental, organizational, social/demographics, etc, change What is needed to boost social networking Where is it going, what’s Social Networking 3.0, where are we now The role of open source/collaborate development Operators role now and then (SN 3.0) Connection between physical networks and virtual/social networks


Overview of Companies Interviewed

Over 30 companies Interviewed and 20 related events & panel discussions attended Mobile & Internet Social Networking Startups

– MBuzzy, Kaboodle, Dogster, Catster, Vavaz, Tiny Picures, Loopt, Bluepulse Internet, ISP & Search

– Google, Yahoo! Publishers

– Hearst Magazines Studios, Media Companies & Labels

– MTV, Sony, EMI, Universal, Disney Mobile Advertising Agencies & Platforms

– SFP Cundari, Admob, Amobee Investment Community, VC’s, Analysts & Advisrs

– Norwest Venture Partners, CMEA, Guidewire Legal - Attorneys

– Hertz & Lichtenstein LLP Carriers

– Vodafone, BT Group, SK Telecom Retail

– Retail Entertainment Design Enterprise/Office 2.0

– Collaborative Strategies, Mashery Research

– UC Berkeley, Standord, SRI Handset vendors

– Nokia and Nokia Research Center


Social Networking Main Trends

Social media services becoming platforms for other communities Large non-SNS community owners getting serious about SNS

– Traditional email and search companies starting to loose ground – looking at how to leverage SNS

• These companies still have largest communities e.g. Yahoo! Groups over 300 million users– Handset vendors e.g. Facebook deal with RIM and Microsoft, Nokia

• Nokia has the largest global community with over 1B phones in market & biggest camera manufacturer– Carriers starting to leverage SNS business models

Media (tv), social network and virtual reality converging - Laguna Beach from MTV

Porting of the experience between different platforms - media, Internet, mobile, virtual reality, social network services (SNS) such as Myspace, Facebook

Branding - moving from old style broadcast to user interaction with brand UGC - everyone trying to figure how to deal with it - what copy right to protect

and what to allow users to edit and share. Work - collaborative tools and services are being taken into the work place

from the Internet - IT having security and management issues. Biz models - ads still main source followed by subscription and transaction

based. In virtual worlds, ads vs. virtual items trending to 2/3 vs 1/3 split. Investment community want to see play across as many models possible to split risk.


Social Networking Business Models

Advertising funded models still rule– Agencies do not agree with ”premium” for CPM (Cost Per Mille/Impression per thousand) for

SNS sites - will not be able to keep CPM’s up– Need to have large base & compelling ad inventory to drive CPM’s– Pixel share e.g. Facebook model– Branded sponsorship models– Advertorials– Targeted social adverticing (Facebook launch 7.11.07)

”Freemium” services to attract & seed community Incentive based models becoming more prevalent e.g. gifting

– Mobile will be driving this due to interaction & context Transaction based models

– Virtual goods, credit card, prepaid/gift cards Subscriptions Licensing & Syndication models - Office 2.0 & music content sales (catalogs) Community data sales

– Usage data, user profiles, marketing lists, surveys, social community graphs “Paid-to-action” e.g. referral to services, applications and goods on Facebook Retail e.g. games

– Monetization still remains a challenge

Build multiple revenue streams


SNS Ecosystem – Collaborative PartnershipsCreate/Edit Share Discover Distribute EXPERIENCE VALUE

WISPMobile Carrier

Community Provider(SNS site) Consumer

Consumer Publishers

Wireline BB Carrier

Wireless BB Carrier

Muni WiFi & Hotspots

ISPCable

Studios &Labels

ContentAggregators

Media Print Media

ApplicationProviders

AdvertisingEnablersDevelopers

GamesPublishers

Search

TechnologyEnablers

Device Vendors

Other SNSSites

Other SNS sites

AdvertisingAgencies

TransactionEnablers

Device Vendors

Brands & AdvertisersContent

Publishers

Tool & Platform

Providers

Micro

Community

Distribution Channels

Acc

ess

Brands

You

SNS Ecosystem – Collaborative PartnershipsCreate/Edit Share Discover Distribute EXPERIENCE VALUE

MyNet

Industry Examples


Case:Company Launched on 2/2004 in Harvard. Founded by Mark Zuckerberg (now 23 years). HQ in Palo Alto 6/04. Revenue $150 million (2007 estimated), employees 300+ (July 2007), looking for 400 people. Investors: Greylock, Meritech, Accel and others; $38.2 million into Facebook since 2004. 10/2007

Microsoft’s 1.6% stake @ $240M -> Facebook “valuation” @ $15B (in 3.5 years).

Trends From exclusive Harvard College student site to Ivy League schools in 2 months. And then to anybody. 5/07 application platform to developers. Now 100,000 registered developers and 6,600 applications. 60 million subscribers (MySpace 110 million users)

and the fastest growing social media network service/

widget platform. 250,000 new users a day.

Business models Pixel-share biz model, Facebook as an aggregator. Internal viewer acquisition market (average c20/user).

Challenges / opportunities Build your application on top of Facebook!

– Music sharing site iLike took 6 months to sign first million users, with Facebook iLike got

1 million users in one week! 10 million fund to provide grants for 3rd party applications that rely on the Facebook developer platform. Between $25K and $250K to successful applicants.

Sorry I couldn’t attend, Dudes!Surf’s up! ;-)


Case:

Company Launched 2005 Help people express themselves & tell stories through photos & videos Largest personal media network

– 134+ million people view Slide widgets per month Before Facebook – 22nd most trafficed Wed siteTrends Top 4 applications on Facebook Own destination site & advertiser relations In 4 months > 53 mil app downloads

– 11% daily active users After Facebook

– Reaches 30% of US Internet audience– 2/3rd of Facebook users have installed a Slide app

Business models Own advertising revenues, product placement Facebook ad revenue share Actively acquires 3rd party applicationsChallenges / opportunities Hub for image management across

multiple SNS sites


Case: Dogster.com

Service SNS where each dog has its web page and connectionsTrends People invest to their pets annually 36 billion dollars in the USA Dog owners tend to socialize with other dog ownersBusiness models Sponsorships for brands Advertising with advertorials and banner ads Virtual gifting Premium service $20/yearChallenges / opportunities ‘Community is about passion sets:

find out what they are and keep that as the core. Link everythingto them’

Niche can be profitable: 10 000 members is good if that is a special group


Case: Tree-nation.com

Company Spanish social network service, whose community members can plant trees

in the desert of Niger to combat desertification and land degradationTrends Fight against climate change SNS as a tool for grass roots movementsBusiness models For-profit business that wants to

make a difference Free community membership Pay for real trees Individuals and organizations

as paying customersChallenges / opportunities In beta phase now.

MyNet

Market Opportunities


EXISTING

MOBILE

PC

NEW

MyS

pace

Fac

eboo

k

Tw

itter

Mid

omi

Slide

Social Networks “Movement”

Tre

e-N

atio

n

MO

SH

NEW OPPORTUNITIES


Community Provider(SNS site)

Consumer

Consumer Publishers

Brands & AdvertisersContent

Publishers

Tool & Platform

Providers

Micro/Niche

Community

Distribution Channels

-Increase loyalty-Efficiency/better use-Reach & access-Rich media communications-Seamless user experience-Discovery across communities-Mash-up functions/tools-Mobility-Context-Monetization-Open platforms-Management tools/platforms-DRM-Social Media Optimization (SMO)-Identity management

-Wider and deeper reach-Targeted services-Community management-Self-supported/servicing-Efficient communications-Content control and monitoring

-Distribution/reach-Community marketing-Awareness-Monetization flexibility-Talent scouting-Instant feedback/discussion-Media interaction

-Community Marketing…-Sizable market/big enough community-Measured campaign effectiveness-Brand interaction-Reach -New platforms besides ads-Engagement/relevant-Brand control and monitoring

-Rich media comms-Ease-of-use-Discovery-Social connections-Identity management-Entertainment-Relevance

-Scaling capabilities-Dominance, focus -> wider-Open platform, alliances -> DeFacto-Big enough for ads

SNS Ecosystem – opportunitiesCreate/Edit Share Discover Distribute EXPERIENCE VALUE

-Self-expression-On-line identity-Social need-Create/Edit->Share->Discover ->Distribute


Summary – Social Networking

Major SNS sites becoming open platforms– Attract more and retain users

New entrants using existing SNS platforms as “OS platform” to gain traction– Data storage, communication with users & other sites

& developers e.g. Slide Collaboration and co-opetition

– 3rd Party application providers actively compete with Facebook’s own applications

Leverage as many SNS sites as possible to create visibility: SMO Social Media Optimization

Opportunities for enablerers– How to mobilize SNS sites, messaging, others

Rapidly changing landscape

MyNet

Pekka Pärnänen, Maria Pienaar – FinNode/Finpro Silicon ValleyRiku Mäkelä – FinNode/Tekes Silicon Valley

3945 Freedom Circle, Suite 110Santa Clara, CA 95054, [email protected]@finpro.fi

[email protected]

MyNet Social Networking Summary Nov9-2007

Technology

Transcript of MyNet Social Networking Summary Nov9-2007