Over the past year, several popular and well-funded Web sites have been touting their services as “social discovery networks,” or places to find people whom you aren't hoping to fuck or marry.
Perhaps the best-known of these, Friendster.com, defined the basic parameters of social discovery. You sign up, create a profile with personal details (name, location, interests), and post a flattering or evocative photograph of yourself. Then you link to your friends' profiles, creating a “personal network” that consists of your immediate friends, plus their friends and so on. With just a few choice connections, you link yourself to a vast set of people. By clicking on the names of people in this network, you can hop from one individual to the next in search of somebody who likes to ride bikes or watch bad movies.
Friendster grew from a virtually-unknown site to an international phenomenon with hundreds of thousands of linked friends. Similar sites such as Tribe.net, LinkedIn.com, MySpace.com, LiveJournal.com and Spoke.com promise members that they will gain instant access to social networks that might do anything from beef up their rolodexes and help them get jobs, to bring them more emotionally-meaningful friendships. Most of these sites boast member bases between 500,000 and 1.5 million.
Inspired by the success of blogs, peer-to-peer applications and online auction house eBay.com, these sites are attempting to turn the search for community into a lucrative business. VC firms have pumped money into Friendster, Tribe and LinkedIn; other sites are trying everything from subscriptions to advertising to get cash for setting you up with a new laser tag posse.
The problem is, it's not working. When social networks ask for money, people simply won't join. None of the popular sites charge for their services. According to network economies expert Clay Shirky, “Community is a special case of market value. Everybody values community, yet every mode for charging for it has failed.”
And it's not as if paying to join a community is an untested idea. People pay dues to be part of business networking groups and country clubs, and shell out cover charges to mingle with the crowds in their favorite nightclubs. Meanwhile, on the Internet these days, the only unambiguously successful e-commerce markets are devoted to pornography and matchmaking, both of which sell social connections of various sorts.
People will pay for sex and love, but they won't pay for friendship.
According to European research firm Ovum, the annual global revenues for adult content online in 2002 hit $1 billion U.S. and are growing rapidly. This figure doesn't include wireless porn or video-on-demand. People are also spraying matchmaking sites with cash. The Online Publishers Association/comScore Networks reports that personals and dating services accounted for nearly 30% of the $748 million spent in the U.S. for online content in the first quarter of 2003.
In the wake of the dot-com money sink-hole, the Web economy is all about selling people to each other for various kinds of mating rituals.
At the same time, the Web's most popular narrative form is undeniably the blog, a dynamic, communally-created message board whose entire existence is dependent on references to other narratives available on the Internet. Blogs are profoundly communal, and notoriously difficult to commodify. Often bloggers can raise a chunk of cash in donations, but only for a special project. Jimmy Wales, founder of the glorious public encyclopedia project Wikipedia.com, has raised almost $40 thousand in donations for the nonprofit that runs his site. Blogger Joshua Micah Marshall, who runs the brainy political junkie site TalkingPointsMemo.com, raised enough money from readers to go to New Hampshire for the Democratic primary.
Rarely are subscriptions a reliable or lavish source of revenue for blogs, and online advertising is only just now seeing any kind of recovery from the dot-bust. Despite the New York Times' perky feature on Nick Denton, an entrepreneurial blogger who claims his sites (comprised of vaguely porno spots like Gawker.com and Fleshbot.com) will one day be a publishing empire, blogs are about as lucrative as zines once were.
Rusty Foster, a shy web designer who runs popular tech and culture blog Kuro5hin.org (pronounced “corrosion”) from a tiny island off the coast of Maine, says it's impossible to build an online community and make money on it at the same time. Kuro5hin, whose membership hovers around 50 thousand, is a collectively-edited blog which publishes original articles about everything from sexual politics to learning classical Latin. Its members often launch into long discussions about articles that last for weeks. Many form lasting friendships with each other.
“I may have started the site, but I don't own what makes it valuable,” Foster said. “People write good articles and post them for free. That's the value of the site, and it's not legitimate for me to sell it.” After making a deal with techie content provider OSDN (owner of popular nerd blog Slashdot.org), Foster spent a year living on advertising revenue. But Kuro5hin readers wouldn't click through OSDN's ads, and OSDN terminated his contract. Penniless and desperate, Foster posted an article on his site asking contributors what they thought he should do. To his surprise, donations began flooding in: he received $42 thousand in three days.
But, Foster said with a sigh, “the mood of the site changed after that. If there was a problem with the site, they thought it was my problem and not the community's problem.” Nasty messages started popping up on Kuro5hin, accusing him of using the money to go rafting rather than fixing technical problems. “People felt empowered to attack me, to say that I was scamming them,” Foster remembered.
Although Foster is working on creating a nonprofit business model for Kuro5hin, he is adamant that community sites can't be monetized the way other media are. “The problem is that the business model of a newspaper, for example, is about selling readers to advertisers. That's the way media have done it since back in the golden years of TV. But when you build a community, you can't at the same time sell it to somebody else. It doesn't work.”
And yet social discovery site Tribe.net is banking on the idea that you can. Like Friendster, Tribe is set up to allow people to link with friends and create a social network. But unlike Friendster, Tribe is a more freewheeling and flexible community with multiple goals. The site allows users to create tribes, semi-public areas like blogs where people can engage in discussions about any topic they like. A public listings area lets users post want ads and items for sale. CTO Paul Martino explained, “Tribe is about creating the right kind of small world. It can be for business done in a social setting, or for socializing while doing business. That flexibility is important to commerce.”
Right now Tribe is in a free beta stage, and it's unclear how the site will monetize. According to insiders at the company, one possibility would be to charge for monthly memberships, which experienced bloggers say is doomed to fail. Other revenue streams might come from charging for certain services, like job postings. This has been a successful strategy for community site Craigslist.org. If the business-transaction part of the site takes off, Tribe could pull an eBay and ask for a percentage of the profit on each transaction. For now, it seems to be in a holding pattern, waiting to see which parts of the site are most interesting to the users.
Danah Boyd, a graduate student who researches social networks at UC Berkeley, says this strategy isn't atypical. She explains that MySpace.com, another Tribe-ish site, is letting users do all kinds of things on their site for free because “it's run by a marketing company to study what people are doing. They don't want to configure the technology; they want to learn about how consumers act so they can sell them to the media.”
Currently, most social discovery sites are making some money through Google's new AdSense program, which places ads on a site based on relevance. Thus, a site devoted to classic cars might get ads for businesses that specialize in restoring old BMWs. Businesses earn money each time users click on an ad. Whether or not AdSense will turn out to be a viable online advertising model remains to be seen. Certainly it won't provide enough revenue to keep a company like Tribe afloat.
There's a reason why these sites, as cool as they may be, will have a hard time monetizing. People in the United States distrust community. They don't want to pay for something ineffable like companionability; and furthermore, they think collectively-organized groups are creepy.
Perhaps the most obvious example of anti-community feeling in recent U.S. history can be found in the many iterations of the Cold War that raged throughout the latter half of the twentieth century. Demonizing Communism meant, in some sense, demonizing many different kinds of collectivity. Already in love with rugged individualism, Americans can't imagine anything scarier than groups of people bound together by something other than kinship.
Movies like the 1956 Invasion of the Body Snatchers, a classic fear-of-commies tale, dramatizes this popular association between collectivity and horror. Alien invaders replace humans with otherworldly replicas whose main interests seem to be an emotionless, hypercollective devotion to creating more beings like themselves. Indeed, their blank-faced “join us” attitudes remind one quite forcefully of people who have become religiously devoted to Friendster and want all their real-life friends to become part of the site and link to all the other droids in cyberspace.
One sees this fear of community elsewhere, too. The Star Trek series' greatest enemy is the Borg, a species of pale super-beings who think collectively, linked via some kind of wacky techno-telepathy to each other. Menacing, group-thinking enemies are the stuff of non-fictional scare stories, too: terrorist cells and gangs are high on many nations' worst-nightmare lists.
Also, I would argue, the rash of books published about “Internet addiction” over the past decade are in some sense about the dangers of making friends, especially groups of friends, online. In Kimberly Young's pop psychology book Caught in the Web, a classic of the genre, one of the questions Young poses to determine whether a person is an “addict” is how often “you form new relationships with fellow online users.” The more you form, the more addicted you are -- online friendships are inherently pathological. As if that wasn't bad enough, the media are also fond of blaming online relationships for inspiring nefarious activities like sharing child porn or planning a cannibalistic sex murder.
The anti-collectivist tendencies in U.S. culture mean that many of us feel vaguely anxious about a person who wants to spend a certain portion of his day hanging out on Kuro5hin or MySpace, chatting with cyber-pals. If he's not getting anything concrete out of these people other than spirited debate or idle conversation, then what is drawing him there? Sexual depravity? Addiction? Some kind of freaky devotion to his (potentially terrorist) cadre? At least if we aren't paying to hang out on Friendster, these questions don't have quite so much of an edge to them. It's not as if we're throwing cash away to visit our favorite online community, after all. We're decent people.
Why don't these kinds of prickly feelings seem to haunt people who visit personals sites? According to Matthew Haughey, creator of popular community MetaFilter.com, “dating sites are not community sites. It seems like they have a specific goal, almost like a product. MetaFilter is like, well, whatever, I'll just talk to other people.”
Haughey adds that any community-based site with an explicit goal that transcends hanging out has an easier time monetizing than the ones that don't. FuckedCompany.com, a corporate gossip site, “makes 100 grand a year,” he says. “People pay money to get search access so that they can make sure their company isn't mentioned. It's based on fear and competitiveness in the industry.” Likewise, he says, “Service-oriented communities cost money. On Fotolog.net [a site for posting photographs], you pay for server space.” But, “if Friendster cost 5 bucks a month, it would be a ghost town.”
But perhaps this is as much a result of idealism as it is fear. After all, one of the main reasons independent music became so popular in the 1990s was because people wanted to be part of something that defied commercialization (even if was subsequently commodified to death). Maybe people won't pay for blogs and social discovery sites because they don't want their fun scene to sell out.
Kuro5hin's Foster worries about the “rise of the gated community” online. He predicts that “online country clubs” will be the sellout social networks of the future, places where “people will start paying for exclusivity.” Although nbbody will plunk down subscription money for the deliberately eclectic, open Kuro5hin, Foster thinks “They will pay to be part of a site that self-segregates, where people can be kicked out.”
Haughey isn't sure Foster is right. “You'll hardly ever convince people that it's worth it to be in the walls. You can't convince them that it's valuable.”
Regardless of whether an online country club model might work, social networkers have come up with a unit of value to replace cash: reputation currency. Science fiction author Cory Doctorow calls it “whuffie,” a term for the status you accumulate by doing things that please or benefit your community. On ubernerd blog Slashdot, for example, members earn whuffie by contributing comments that other site members score as interesting. EBay freaks earn whuffie by getting a lot of glowing reports from people who have engaged in transactions with them. And on sites like Friendster, your whuffie soars when your friends write “testimonials” about how great you are. More business-oriented social discovery sites like LinkedIn can even correlate whuffie to real-world currency. The better your reputation, the more likely you are to have access to excellent business contacts.
One of the main reasons why social networks don't sell out is that their owners haven't realized that the value of community isn't measured in money alone. The most successful funding models for blogs have been donations because groups create value by sharing their resources. Money is for individuals who want to consume objects and get the hell out of the store. Whuffie is currency for an economic system based on collectives, where value is measured in your commitment to the group rather than devotion to yourself.
Perhaps the lesson we will ultimately learn from online social networks is that the money system is starting to wither away. It isn't adequate; it cannot buy us what we desire. There is a certain satisfaction in knowing that community feeling can be valued, but not sold.