GenuineVC David Beisel's Perspective on Digital Change

March 2, 2006

A lot of the comments that Nate Elliott, an analyst at Jupiter Research, voices in a recent Businessweek article about social networks resonate with me. He speaks to the opportunity that “niche-oriented networks,” or as I’ve called them “vertical social networks,” have in creating significant and sustainable business models, in contrast to some of the prevailing popular general-interest ones of the day. He also touches upon the subject of “social commerce,” utilizing uses social networking for people for “directly influencing each other’s purchase decisions.” The article is worth the read, highlighting some healthy skepticism to the space.

  • Mark Devlin

    It was an interesting article, but Elliot missed social networks that seek to define not just who you know, or who you know in a specific vertical market, but those that track and interconnect all aspects of who you are at a granular level. For example, my site, Crisscross, currently tracks our readers’ goals and favorites. Expanding the model, we will soon plug in systems to let users share and compare jobs, places and experiences. Because granular data is shared across vertical segments it has more power, and stronger ability to generate revenue.

  • Peter Caputa

    I like how you are consistently covering and weighing this subject, David.

    I am struggling with choosing a niche for our service. We’ve gone down the path of offering a general service with “local” as our niche. And that is actually starting to pay off. But, to take ourselves national, I think it’ll be necessary to choose a subject.

    I agree with the last commenter that there is strength in having horizontal coverage for any community. The more diverse a community, the stronger I think it can be. So, maybe there is a happy medium. Or maybe there’s future niche social networks should leverage more open technologies which enable aggregation and syndication of content and APIs that enable functionality from different services to be leveraged by different niche communities.

    Whereas, the Friend Finder network simply re-uses code to launch new niche dating sites, maybe niche social networks of the future will not only re-use code, but also re-use data and leverage connections made in different networks.

    I think there is certainly a lot of possibility to create niche social networks, but I think the bigger opportunity is taking the data/APIs that exist and tie-ing them into new niche branded environments, so that participants in other environments can automatically participate.

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