Facebook's Impact on the Widget Economy

Last night I attended a technology event, Refresh DC. Refresh DC provides local companies with the opportunity to speak for an hour about a topic of their choice. Last night’s event was sponsored by Clearspring and the topic of discussion was widgets. After listening to Will Meyer talk for a while, I began to wonder about Facebook’s effect on the widget economy.

Widgets were and continue to be a thriving industry. There are countless startups that are centered around widgets. The primary players are widget creators (MyBlogLog, etc), widget distributors (Clearspring, etc) and widget platforms/hosts (Pageflakes, iGoogle, etc). The most prevalent soure of widget hosts are start pages. Whether it be Netvibes, Pageflakes or iGoogle, there is a large market for startpages. Startpages are extremely popular within the tech community and recently they have grown outside of the tech community.

Right in the middle of all this growth, Facebook came along and opened up their platform forcing many of these companies to question how they fit in to this new ecosystem. The bottom line is that for the most part, widgets do not belong within the Facebook platform. The platform is meant for building useful and interactive applications that exist primarily outside of a user’s profile with only a fraction of all functionality existing within the user’s profile. So how do widget companies adapt in this new environment?

Last night I came to one conclusion: widgets need to emphasize social interaction. With the infinite size of content on the net now, it is impossible for anyone to process all the information that they would like to on any given day. The result is a trust system where we allow others (with our own input) to determine what is really important. Facebook has exploited this with the “social graph.” All applications that are built can tie directly into those trust relationships that users have built over time. They can tie into users’ newsfeeds, messages and profile components.

In contrast to the Facebook social graph, startpages are strictly for the individual. I have no idea what my friend’s startpage looks like unless I go view it from their computer. As far as I know, they don’t have an effective way of recommending their startpage widgets to me. The way I find out about books, blogs and products is now primarily through blogs and Facebook. The widget economy is going to have to adapt quickly in order to become one of those key components.

Don’t get me wrong, there are already social widgets such as MyBlogLog and any one of the hundreds of video sharing widgets such as YouTube. Startpages are not social though. Blogs have been the primary driver of widgets for the past couple years. It’s now time for the startpage industry to wake up and go social. What do you think? Do widget platforms need more social features?