Can Operators Be Properly Socialized?

Social Networking No Free Ride for Carriers

Facebook. MySpace. Twitter. LinkedIn. Friendster. Social networking is everywhere.

Facebook is, in fact, the fourth-most trafficked site on the InterWebs. And Facebook and MySpace plug-ins are consistently on the most downloaded list for Apple Inc.'s App Store, for instance.

So it should come as no surprise that carriers sorely want a piece of this Web 2.0 opportunity known as social networking — a phenomenon that only can be called wide and shallow, the direct opposite approach to friendship from the nuclear, “Sisterhood of the Traveling Pants” BFF-ness so long enshrined in our culture. Through social networking, one collects friends, and friends of friends, and friends of friends of friends of friends. It’s the quantity, not the quality, that’s the hallmark. While this truth means users have many more people to impress with pithy Facebook status updates and oh-so-clever photo commentary, it’s also a rich environment for a savvy carrier to leverage. The problem is that some service providers might assume the viral nature of it all should translate into making half the marketing effort for twice the payoff.

That may help explain why carriers’ early stabs at capitalizing on people’s hunger for connecting with their friends (and an extended universe of friends’ friends) yielded lackluster results.

Verizon Wireless was one of the first to give mobile access to MySpace profiles, for a while on an exclusive basis. But it is unclear how much value this created; Verizon had hoped it would increase stickiness and become a differentiator for MySpace-crazy peeps looking for a carrier. And that those social-networking sorts then would tell all of their friends, and so on, and so on. But it just ended up being a nice-to-have, not something translatable to real improvements in any metric.

And high-end MVNO Helio had banked on its Web 2.0-entrenched applications suite to attract a virally-expanding target audience of young, wealthy, tech-savvy types. Yet this strategy became an albatross around the neck of its parents, SK Telecom and EarthLink Inc., which ultimately sold the company to Virgin Mobile USA. Virgin was more interested in Helio’s postpaid capabilities than its MySpace Mobile exclusives.

Nonetheless, carriers have a terrific opportunity to monetize social networking, thanks to the emergence of location-based approaches, partnership business models and the potential to use blended services smartly. In other words, they need to throw out the viral idea, and think deeper.

Local-based providers such as GyPSii, Pelago and Loopt allow users to share real-life experiences via geo-tagged, user-generated multimedia content; exchange recommendations about places; identify nearby friends; and set up ad hoc face-to-face meetings. In fact, ABI Research expects this type of functionality to be so compelling that location-based mobile social networking revenue will reach $3.3 billion by 2013.

That’s a number that operators can get a piece of, but not through the old, unsuccessful walled garden approach, or via viral awareness on a single site. Carriers, which can bring device-agnostic location awareness, class-of-service guarantees and privacy policy enforcement to the table as network owners, are in a position to partner with LBS developers to create some compelling packages. For instance, in partnership with app developers, carriers can offer users direct access not just to one site, but to many. In fact, a value-add can lie in the ability to publish media to multiple sites at the same time. That’s something third-party widgets can’t do.

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