When MySpace was introduced in 2003, it was the first real social networking site.  It broke the mold of how people could communicate, find “lost” friends, and keep track of friends and family members.  Once they became successful, they started settling into a sustaining technology mode in order to improve their bottom line.  Mark Zuckerberg and friends started Facebook in 2004.  Instead of aiming for sustaining technology, they opted to go for the disruptive technology.  They listened to suggestions from users and offered what users wanted, not what managers thought users wanted.  By allowing users to customize their personal Facebook pages in virtually any way they wanted (as long as it is not considered inappropriate, threatening, or dangerous), Facebook quickly gained fans and users.  They soon surpassed the success and level of users of MySpace.

Knowing exactly what was done to surpass MySpace; Zuckerberg has kept Facebook in the disruptive technology mode.  This keeps interest high, users happy, and the money rolling in.  As long as Facebook stays on the cutting edge of disruptive technology, they should remain successful.  However, disruptive technology lends itself to new entrants into the marketplace.  Basically, new users can throw anything into the ring and try anything to start a new business.  They have nothing to lose by running on the edge.  Eventually one or more of these upstarts will hit upon an even more appealing version of social networking than MySpace.  At that time, they may be able to displace MySpace in the same way MySpace has displaced Facebook as the leader in social networking.

What are some of the business challenges facing social networking sites?   One business challenge which is readily apparent is the threat of new entrants into the market.  Since disruptive technology is the mode used by social networks, a company coming up with “new” and/or “better” features and interactive technology can (as proven by Facebook) can potentially unseat leaders in the field.  Another business challenge is the protection of the reputation of the company.  Since so many people have posted personal information on these sites, unscrupulous individuals can use that information for identity theft, stalking, harassment, or worse.  Once these activities occur, a lot of PR has to be done to try to repair the damage and assurances have to be made that measures have been taken to attempt to prevent recurrence in the future.

What are the characteristics of a social network? All social networks basically share the same characteristics.  Social networks allow people to create a profile for themselves, search for friends and family members, play games, and interact with fellow social network users.  Prior to the widespread use of the Internet, social networking consisted of letter writing, telephone calls, meeting at social events, and in-person interactions.  Internet social networking has taken away social and distance boundaries.  People from all walks of life from all over the world can chat with one another as if they were in the same house.  This has opened up communication with people one would typically never meet.  People from different states, countries, and cultures can easily communicate at any time.  The anonymity that is available to social network users lowers inhibitions and even socially awkward people are able to go online and become social butterflies.

What security issues do social networking sites create? As mentioned above, a lot of people post a lot more personal information on social networking sites than they should.  This creates a security issue for the users of the networks.  There have been numerous cases where people have been stalked and harassed by misguided or psychologically unstable users of social networks.  There have even been a few cases of women being raped and/or murdered by these individuals.  Social network users should be thoroughly educated about the dangers of making personal information available to the masses.  Social networks also have the responsibility to put filters in place to attempt to keep this kind of information from being posted.  Although it is impossible to completely safeguard personal information or keep people from posting it, every attempt should be made to do so.

What are some current social networking trends?   Whereas social networking was almost exclusively used by individuals to connect with other people in the past, it now seems that more and more businesses are using social networks to either get their names out there or keep their names in circulation.  Somewhere on the webpage of most businesses links to Facebook, Twitter, Flikr, LinkedIn, Myspace and other social networks are present.  Businesses naturally encourage website visitors to go to the social networking sites and give them rave review.  I don’t know how many people are going to go out of their way to praise a business on social networks, but they rarely hesitate to spread the word for bad service as soon as it happens.  Being so socially connected can be a double-edged sword for businesses.

How can social networking sites generate revenue beyond selling banner and text ads?   To survive in a very competitive market, social networks will have to continue to offer all of the most used and most popular features free of charge.  I would suggest that a way to generate revenue would be to offer highly-desirable features that would be available for purchase.  The features would have to be unique to the site and very, very desirable for people to be willing to pay for them.  The gaming area of social networks would be another avenue for generating revenue.  The games could be set up so that everyone can play up to a certain level.  Anyone wanting to continue the game beyond that level (where all the really cool stuff is) would need to subscribe to a service on a monthly, quarterly, or annual basis to continue playing.