I’m spending way too much time being a “social networker.” Since I more or less exist in cyberspace for a living, I figure making business and interest connections virtually makes more sense than going to a local meeting that is geographically-restricted to where I live.

Online social networks are webs of relationships that grow using high-tech socially engineered Websites. These networking webs grow from conversations among people who share personal information and common interests, yet who differ in other ways such as living halfway around the world.

My playing field of choice is the new Google affiliated invitation only Orkut.com. Both Orkut and I are new to social networking. Orkut, the newest network, went live on January 22.

Within the first 48 hours it was up, Orkut had 100,000 members – and this is a network that grows by a personal invitation from existing members. As stated on the site, this closed access helps “…organically grow network of trusted friends. That way we won’t grow too large, too quickly and everyone will have at least one person to vouch for them.”

The social networking space is getting crowded with sites like RYZE.com, LinkedIn.com, ZeroDegrees.com, MeetUp.com, Friendster.com, Tickle.com, Spoke.com, Hipster.com, Tribe.com and even one called DudeCheckThisOut.com. *

Technology analyst Mitch Ratcliffe has studied social networks extensively. He writes about the phenomenon on his Web log at RatcliffeBlog.com and at his new position as the official Red Herring blogger at RedHerring.com.

We asked Mitch about this hot social networking trend, whether they are valuable and will all of them survive or be snapped up by the big online giants.

Listen to the audio discussion with Mitch Ratcliffe
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Q: Social networking sites seem to be thriving right now. What are your thoughts on whether they will continue to grow?

Mitch: Internet services always do well when they’re not charging anything.

Q: That’s right. Sites like MeetUp.com, Friendster.com and Orkut.com are all free right now.

Mitch: They deal with different kinds of services. Some of them are about creating business networks online where I can introduce somebody to someone else and say this is a good person and you can trust them to at least take your call or answer your e-mail. Some are oriented around getting people together in a real space like MeetUp.com. The Friendster network is about getting people together to go out and party.

Q: The real question is whether people are getting any real value out of these online networks. Is there a business connection or are they finding friends? Are the social networks driving enough value for people to opt to pay a subscription fee for them in the long run?

Mitch: Some of them may very well turn into real businesses. The company Spoke.com is a business networking service. They provide a free service to the world so they can deliver an enterprise solution for companies who are paying a pretty substantial amount of money to install and use internally to manage business contacts.

Q: But are they viable?

Mitch: I was on the Board of Directors for Match.com. For the first couple of years you have actually no idea what is going to work. You don’t know how often people are going to come back. In that case, if people were dating, they didn’t need the service anymore. Well, it turns out they would come back and generally come back three or four times before they would not come back for one reason or the other - and we were in never sure why that was. However, the board meetings were interesting because we started reporting success in terms of marriages and number of babies produced!

Q: That’s probably an appropriate criteria for that kind of site. What is going on with these networks right now? Even Google is experimenting in this area.

Mitch: What’s happening right now is a lot of experimentation amongst all these companies to see how much people use this, what the size of the typical network grows to and whether there is enough interaction between those networks to drive a real business model.

There is a new social network site that just came up mid-January called Orkut.com. It’s described as an affiliate of Google. Google has an engineer named Orkut – that’s his first name, which shows you parents shouldn’t name products. Orkut got so much traffic when it started that it crashed. I’m seeing a lot of people rushed into this space, just like every other social network I’ve seen. These are the same people that have networks of 200-300 friends already.

I don’t know if any one of these sites will be able to compete without buying and consolidating all the other network services. The problem with a social networking service is you can always go somewhere else and start another network. Most of the companies that are involved in this are going to have to do something that is open source, that allows people to share this information across networks, or no one of them are going to become a viable place for people to stay.

Q: None of these places are generating any revenue off of membership.

Mitch: That’s where the Google connection with Orkut.com gets interesting, I think. If you look at the privacy notification, it suggests that they can use personal information about you outside of the Orkut framework but not outside of their network. That means they can use it to target advertising directed at you as an Orkut member – perhaps seeing Google Adwords banners.

For instance, you’re on a site that has Google ads served to it with ads related to what the site is about. But because they know it’s you, they might be related to what you are interested in. In Orkut, they ask what your political orientation is. It might be a conservative site but because they know you are a liberal, they would display adds to liberal publications or books that criticize conservatives. That’s pretty valuable. That’s a business.

Q: But none of the sites are doing any advertising.

Mitch: No, but that doesn’t mean they can’t. Everybody is doing these experiments now to see whether or not and where the business exists. I’m sure there is a business in connecting networks of people. There is this funny little thing called the Internet that proves that.

Q: What is the next evolution? Obviously, not all these networks sites can survive. Will we see some level of consolidation?

Mitch: The main backer of LinkedIn.com and the main backer of Friendster.com got together and bought one of the key patents in this space. Now you have two guys who own a third interest that they share – and they are competing.

Consolidation is already starting to go on at the very genetic level between all these sites. Information is shared through protocols like “friend of a friend,” which is a standardized way of expressing information about the relationships between users on a site and OPML, which is a feed that allows you to track what other people are reading – a sort of logging of blogging. They are all going to compete to be the place that is the aggregator of choice.

Of course you can have multiple aggregators of those kinds of connections describing networks of people, but some of those networks will start to stand out.

Then the question becomes if you’ll be able to go anywhere on the Web and not have the service provider of the site that you are on know who you are and everything about you. That’s where it gets worrisome.

To read more of Mitch Ratcliffe’s views on technology, go to his blog at www.ratcliffeblog.com or read his uncredited blog at www.redherring.com/RhResearchWeb/BlogHome.aspx.

* You’ll find a full list of social networking sites, organized by category, at the Social Software Weblog at: socialsoftware.weblogsinc.com/entry/2127913924623224.

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