The next generation of Social Media systems will go for the cash

There are two developing trends emerging in social networks, both trying to solve the problems that the current ones like Facebook have - ie they cannot get enough information about your high value behaviour to make for high value Ad serving, nor is mining your data really worthwhile as the really useful stuff isn't really there. Flying Sheep and so on don't really cut it.

The game in Free-to-use Social Media is to be able to estimate your near future Net Present Value and intentions, for Advertising and datamining purposes. So they need to get a better handle on your more valuable transactions (throwing sheep is not where it is). The ways out of this dilemma are fairly obvious:

(i) Get more data about you

But we believe Location based social networks get a whole lot more data about you than a pure social network or search engine does, as it can cross reference your location to a whole lot of other datasets rather than just your social net, Also, real time movement data allows a whole lot more valuable projections and predictions to be made about you.

Of these sorts of systems, we believe games based ones are the most powerful at extracting user data as:

(i) They reward users for data disclosure with in-game treasures - status promotion, electronic goods, privileges

(ii) By involving users in a game type environment, we hypothesise they can override natural caution and rational reluctance on data disclosure

This combination of reward and breaking down barriers will be able to get people to share far more personal data than any other type. Also, games are seen as "good" or at least harmless - witness the Foursquare/Harvard deal - as Blown to Bits notes:

Having spent many an afternoon over the past year in information security meetings, where the University has been developing policies and standards for how information about our students may be accessed, stored, and moved, I immediately started wondering whether Harvard had somehow signed onto a deal to encourage students to surrender their privacy, and if so, who was the commercial beneficiary. The Gazette story doesn’t mention data privacy at all. It simply has a Harvard spokesman echoing foursquare’s utopianism.

We believe that Harvard’s participation will allow our community to engage with friends, professors, and colleagues in new ways. We also hope visitors and neighbors will benefit from the platform as it grows through use.

So visiting high school students and Chinese tourists are apparently also the intended “beneficiaries” of this “service.”

As Hal Roberts of the Berkman Center pointed out when I asked him about this story, foursquare’s privacy policy is pure boilerplate:

We receive and store certain types of information whenever you interact with our Service or services. Foursquare automatically receives and records information on our server logs from your browser including your IP address, cookie information, and the page you requested.

It goes on to explain how they aggregate this data and analyze it, and how they won’t disclose it in a way that would identify you personally. Only problem is, the privacy policy doesn’t mention the really private information foursquare collects—the location information. That simply isn’t covered by any of the boilerplate. So they can do what they want with it, without asking.

The interesting thing, as he notes, is that they have managed Harvard to use it despite all the internal work on student privacy and the lack of any protections in the T&As.

Games are also a better way of selling online goods, espaecially if they help you perform better in the game and thus win even more prizes and status.


(ii) Go for the jugular - get you to share your financial data online

There have been personal savings services that have done this for quite a few years, but they have been "first generation" - ie they aggregate and anonymise all the data and there is very little "social" in the network. But more recently, a number of services are launching persuading you to share your purchases with your friends and neighbours in a more social way - Bundle for example, which to get you started wants (From ReadWriteWeb):

To get started, you just enter your location, age, income and whether you are married, single or have kids. Bundle will then create an infographic that represents the spending habits of similar households in your neighborhood. From there, you can drill down deeper into the statistics. At its most granular level, Bundle displays where people are spending their money. My neighbors, for example, buy their electronics at Best Buy, Apple and Fry's.

.....

...the team also plans to allow users to enter their exact spending habits by either entering the data by hand or by giving users the option to upload credit card statements directly. This will make it even easier for users to compare their spending habits to those of their neighbors.

So what does a Facebook or a Google do? Google's strategy is mainly the former, hence their advance into more and more areas of your data trail. Clearly they cannot afford to leave Location to others, so we expect lost of location based operations across all their assets, and a lot of promotion of mobile smartphone systems which are the main method for picking up location data.

Facebook, Twitter etc clearly rapidly will need to accelerate a mobile application strategy will that drive Location based usage.

But the sweet spot will be Location Based gaming, one wonders what Google, Facebook et al will launch in this space.

With respect to financial data, its interesting that Google has already launched its own payment service (Checkout). I would not at all be surprised if Facebook starts to offer (or acquires) financial advice sharing capability in a far more structured way (there are people who offer this via Facebook already) especially as their user demographic ages.

Its a harder game to play as one needs some form of existing credibility, and there are regulatory issues to be skirted (the rise of non-bank banks - sorry, social loan services - online is very interesting here.

So (in) conclusion, I am hypothesizing that this location/gaming/financial data service based social network structure will be the next generation of Social Media. Messrs Schmidt and Zuckerberg have done a superb job of parting users from their privacy scruples, but Google and Facebook may not be the ones to profit.