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Slide 1: The Future Of Social Networks Charlene Li Vice President & Principal Analyst Co-author of Groundswell Forrester Research March 4, 2008

Slide 2: 2 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Slide 3: They are online with their social networks 3 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Slide 4: 4 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Slide 5: Theme Social networks will be like air. 5 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Slide 6: Components of social networks Profile Universal identity Relationships A single social graph Activities Social context for activities Business model Social influence defines marketing value 6 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Slide 7: My multiple identities 7 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Slide 8: Universal identity cli@forrester.com me@charleneli.com Mobile number 8 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Slide 9: Universal identity foundations • Federation (OpenID approach) • A few major players will serve as major federation focal points » Yahoo!, Microsoft, Google, Plaxo, etc. • All players must realize that they can grow the market faster/better by working together » Data Portability Group is the beginning 9 Entire contents © 2008 Forrester Research, Inc. All rights reserved.

Slide 10: Bill of Rights for Users of the Social Web “We publicly assert that all users of the social web are entitled to certain fundamental rights, specifically: •Ownership of their own personal information, including: » their own profile data » the list of people they are connected to » the activity stream of content they create; •Control of whether and how such personal information is shared with others; and •Freedom to grant persistent access to their personal information to trusted external sites.” - Authored by Joseph Smarr, Marc Canter, Robert Scoble, and Michael Arrington http://blog.broadbandmechanics.com/2007/09/a-bill-of-rights-for-users-of-the-social-web 10 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 11: My Facebook social graph Missing Colleagues Parents Extended family School parents Neighbors Babysitter Walking group 11 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 12: My real social graph is much more complex 12 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 13: Let’s end the insanity 13 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 14: Relationships today are explicit – and a pain LinkedIn Twitter Facebook Plaxo 14 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 15: New “entrants” will challenge the incumbents Millions of regular users Search & deep content Ad and content networks Relationship maps 15 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 16: Relationship mapping will be automatic and permission-based 16 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 17: What people do today on social networks 17 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 18: Dave has a nice book review on Facebook 18 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 19: But it would be more helpful on Amazon “See friends’ reviews” 19 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 20: How Yahoo! could incorporate social networks Search based on what my friends finds relevant Elevate stories tagged by friends – anywhere See which of my friends owns a Focus – and what they think of Compare daily portfolio it performance to friends’ 20 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 21: The under-rated value of networks 21 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 22: Endorsement value depends on your network • Your authority on the specific topic • Your network’s interest and authority on the topic • The trust level among your network on the topic 22 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 23: The future business model for social networks • Marketers will pay to reach and influence valuable • Each person will have their own “personal CPM”* • Social networks will compete to have the best experience for high-influence individuals * From Marian Salzman, JWT 23 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 24: Evolution of open platforms Walled garden Ubiquitous services social networks Search freedom 1993 1999 2003 2008-9 2013 Data portability Portal aggregators 24 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 25: Recommendations • Create linkages between services based on individually-controlled identity federation • Compete on creating the most compelling social experience, not social graph lock-in • Develop social applications that have meaning • Integrate social networks into existing activities • Design business models that reflect the value created by people’s social networks 25 contents © 2008 Entire Forrester Research, Inc. All rights reserved.

Slide 26: Thank you Charlene Li +1 650.581.3833 cli@forrester.com www.forrester.com groundswell.forrester.com 26 contents © 2008 Entire Forrester Research, Inc. All rights reserved.