Google’s OpenSocial benefits smaller social networks

Breaking news tonight about Google teaming up with several social networks to create a set of standards for application developers. The NY Times says:

On Thursday, an alliance of companies led by Google plans to begin introducing a common set of standards to allow software developers to write programs for Google’s social network, Orkut, as well as others, including LinkedIn, hi5, Friendster, Plaxo and Ning.

According to Techcrunch:

OpenSocial is a set of three common APIs, defined by Google with input from partners, that allow developers to access core functions and information at social networks:

* Profile Information (user data)
* Friends Information (social graph)
* Activities (things that happen, News Feed type stuff)

Lots of discussion on the web about it.

This is great news for widget and app developers like Flixster and Rockyou (both Lightspeed companies) as the burden of building apps for multiple platforms can quickly get overwhelming for the resources of a small company. It’s also great news for the largely “second tier” social networks (in terms of US users) that are members of the network.

According to Venturebeat, Facebook was invited but declined to join. Not a big surprise.

Open networks like this benefit smaller players. It’s simple math. Lets say you’re a social network with N members. You’re looking to join a coalition of other social networks to create an open standard; in aggregate they have M unique users. Your benefit is proportional to M and your cost is proportional to N. So the cost is greatest when N is large (big social networks will have app developers jumping at the opportunity to develop for their users anyway) and smallest when N is small (as they probably would not get a lot of apps developed for them on a standalone basis otherwise).

This same scenario has played out whenever there have been dominant closed platforms. Windows remain relatively closed (with dominant market share) while Linux embraced openness. AOL tried to stay closed (using its proprietary Rainman programming language) while small web sites embraced the openness of the web. Anil Dash had a good post covering this history earlier

Historically, openness has taken share against (even large) closed networks because M keeps getting bigger and bigger and more developers get encouraged to write for the platform.

Also historically the biggest owners of closed platforms have been slow to embrace openness, if they ever did at all.

The other variable in this case is how friendly each social network is to app developers making money. It isn’t enough to get a lot of users on a platform if you can’t get paid. Rockyou and Slide both shifted their efforts from the larger Myspace to the smaller Facebook when Facebook opened up because they could make money from Facebook but not from Myspace.

We’ll see if past is prologue!