Social Network Sites Are The Emperor's New Clothes

This weekend has been a weekend of data portability discussion among a number of blogs. It has become a hot button topic for a few of us. On Saturday, I even turned against some of the data portability evangelists. I still stand by a lot of what I said including the fact that data portability evangelists cannot articulate themselves effectively. Sometimes I can’t articulate myself as well though. We aren’t perfect!

What I’ve come to realize over the past weekend is a number of things:

Data Portability is Inevitable
I am a strong believer in free market economies. They are highly efficient systems and in the end, the consumer usually gets what they want. Currently most users don’t realize that they are supporters of data portability but over the coming months they soon will be. Mike Arrington and the crew on Friday’s Gillmore Gang podcast will not suddenly stop talking about this topic. I won’t either.

Data Portability is Complex
Data portability is not a simple issue. If it was, everybody would be talking about it (well at least more people would be) and we would be further along in the process. Unfortunately the issues are not simple and once you start breaking down the nearly limitless ways that our data can interact, you finally begin to realize the scope of the project.

Data Portability Means Money
There will be an entire industry based around data portability. We have already seen some companies start to pop-up but we have only witnessed the beginning. Companies will race to acquire partnerships with large business to help them leverage their user base and embrace data portability. In turn, those companies will leverage those partnership agreements as assets during future negotiations.

There is still the whole question of how do we monetize the attention economy most effectively? This is something that Facebook is battling on a daily basis as well as other leading websites. While nobody has figured it out yet, somebody will soon figure out the answer to this billion dollar question. It’s at this point that the insane valuations being placed on attention rich websites will suddenly be justified.

Social Networks Have Value but It’s Not the Data
While there is a substantial amount of value in building up a user base, what’s more important is user attention. Creating systems that effectively drive user attention is critical in being successful on the web. The reality is that no effective monetization system has been designed so far that helps monetize attention. Social network sites are extremely efficient at driving attention.

For now though, social network sites will remain to be the emperor’s new clothes until someone can come up with the monetization solution.

There is A Lot of Work to Do
We are still in the very early stages of social networks and data portability. This is a space which continues to evolve and new thought leaders join the space everyday. What we don’t need is a small group of individuals plotting out how data portability should function. We need a group that can articulate available options effectively without getting in a mud slinging fight with each other.

I believe that this is the point of the Data Portability Workgroup. The changes won’t take place overnight but the changes can’t happen without the involvement of the people. While there are still a lot of problems to be resolved, the discussion is becoming louder and soon enough I think more people will take note.