Facebook’s IPO Marks the End of the Web 2.0 Era: The Social Web Is the New King
I recently spent the weekend at a unique event that brought founders, entrepreneurs and investors together. I was fortunate enough to spend time with the original pioneer of social networking: Andrew Weinreich, the founder and original CEO of Sixdegrees.com. For those of you who don’t remember, prior to Facebook, Myspace and Friendster, there was Sixdegrees.com. Initially conceived as a way to manage relationships online, the early Web 1.0 company developed the concept and the product and patented many aspects of modern-day social networking. Through a variety of missteps, the company didn’t succeed (although the patents live on).
At one point, our conversation turned to the idea of a Social Operating System, something that becomes an underlying platform for all things we do online, that creates continual connectivity between you and and all your friends. As I look back over Facebook’s history and excitedly toward its future, I think we can all say that Facebook has essentially captured that vision. It has presented to us a world where applications run on top of a social infrastructure and where our identities travel throughout our digital experience with us through Facebook Connect. I could not be more impressed.
The way the principles of the social operating system continue to evolve will have a tremendous impact on our society.
First, marketing will change. Friend-to-friend marketing has already shown its strength as the driving force of growth for companies like Gilt Groupe, Uncovet.com and Fab.com, whereby you earn credits with the site by referring your friends to sign up. The idea of shifting traditional marketing spend to continually incentivizing your customers to market on your behalf is changing the way I look at developing systems. The idea, though it sounds simple, has many ramifications. For example, it requires new software to be built with a new set of metrics in order to understand how friend-to-friend marketing is working. It would also lower the cost per acquisition compared to traditional marketing spends.
Second, it’s the influencers who will have most of the power. As we become more and more reliant on our social graph for discovery, the less and less dependent we will become on traditional media. This is one of the principles that drives Twitter, Pinterist and YouTube adoption. We can see how effective is it with companies like ShoeDazzle and BeachMint, which build product lines around celebrities and influencers online. By doing this, they immediately drive higher sales. I theorize these influencer networks will be the next ad networks, having the sway to move audiences to new services and drive sales.
Lastly, these new principles of social software design will prevail. Built on top of platforms like Facebook, they will quickly replace older systems. In the last big wave of acquisitions, we saw media companies and portals buying start-ups to bring innovation inside. I believe the next set of acquirers will be from a wider, more distributed set of buyers — ranging from consumer product brands to financial companies — who are looking for innovators building the next generation of solutions on top of the social operating system. (Looking at the staggering growth rate of the socially-minded site Fab.com quickly reminds us that products built with social grow faster than those without.)
With Facebook’s IPO, the general public will be even more vested in its success and thus help to further boost Facebook’s exponential growth. Facebook’s investors will, in essence, collectively help to drive forward the innovation of social operating system platforms. In addition, any companies that rely on Facebook’s technology or its platform — such as Zynga, Renen and Snap Interactive — should also see a lift in value. This wave of new technology companies will reinvent, once again, the way we live online.
Now that Facebook has gone public, I think we can call the era of Web 2.0 over. The social web is taking its rightful place as the new king.
Michael Jones is the founder and CEO of technology studio Science. The former CEO of Myspace, Jones is a long-time entrepreneur, building and selling numerous successful online and mobile businesses. He is also an individual investor in numerous private start-ups, and, in full disclosure, holds stock in some of the companies listed above.