SOCIAL NETWORKING:2008 is set to be the year of social networking websites and the Irish market is ripe for the picking

If you are already fatigued with the hype surrounding social networking websites, you had better brace yourself.

Facebook, the social networking website reputed to be worth $15 billion (and with an average employee age of around 22) is said to be launching a major assault on the Irish market this year. Not content with growth of 2,600 per cent in 2007, going from 7,000 users in the Republic to 190,000 over the course of the year, the Silicon Valley company wants to catch up on its English rival Bebo which claims to have one million registered users here.

The rise and rise of Facebook has been well documented, but the figures are worth looking at again. It blossomed from 10 million users to 50 million between September 2006 and the end of last year. It serves up about 60 billion pages of content a month with each user viewing an average of 1,500 pages. The social network is now truly international with 50 per cent of its users being from outside the US.

It's not the only web service based around communication and networking that enjoyed such massive growth in 2007. Five of the fastest growing searches on Google.ie were related to social networking sites or sites that have a significant community element to them - youtube, bebo, stardoll, club penguin and myspace.

But there are already signs that the current crop of social sites are just an interim phase as the web evolves to more fully support meaningful human interactions. Are mass-market sites with hundreds of millions of users really going to be the preferred way to communicate with the small groups of co-workers, family and friends that we want to have meaningful interaction with? Evidence from sociology and anthropology suggests they aren't.

In a 1992 article, British anthropologist Robert Dunbar suggested, based on the size of the human cortex, that the average number of people we can maintain a relationship with is just 150. Dunbar's number, as it has come to be known, has subsequently been popularised in numerous publications, most notably Malcolm Gladwell's The Tipping Point. Yet on social network sites many users have hundreds and even thousands of contacts which in the parlance are curiously called "friends".

Dave Morin, head of Facebook's platform team describes the company's mission as "trying to efficiently map the social graph". He defines the social graph as "the network of connections in the real world through which people communicate".

Facebook Groups, which allow users create micro-networks within the site around different issues or areas of interest is a central part of that strategy. But the popularity of Facebook, Bebo, and MySpace is also their Achilles' heel. They became popular through a viral network effect - early adopters encouraged their friends to join so that they could use the sites to share and communicate with. With Facebook's roots in US colleges, it grew in popularity by attracting the hip students first, which in turn made it attractive to the rest.

One Silicon Valley financier who prefers to remain private, while admitting that he gets lots of value out of Facebook, says there are clear signs that the early adopters are moving elsewhere now that it has exploded in popularity.

"The noise to signal ratio on Facebook for most users is now incredibly annoying," he says. "The cool kids are now moving on because they see Facebook as mass market."

Many also feel that current social networks embody a US view of the world. With the exception of Bebo, which was founded in the UK, all the major social networks have grown out of the US and more specifically California's Silicon Valley. Marcus Mac Innes, founder of photo sharing site pix.ie thinks that presents an opportunity for European start-ups in the space.

"It makes sense to start a web business in the Valley because the eco-system is there to support it," says Mac Innes. "My feeling is that if everyone moves to the Valley, we all be in the same mind set and the products will all be the same."

As an example of how a European site can be more atuned to the needs of local users, Mac Innes says he finds European users value intimacy while US users hold anonymity dear. "We find that people using pix.ie to communicate already know each other offline," explains MacInnes. "They congregate in groups around family or friends. I get the feeling there are very few family groups on US sites like Flickr - it seems to be groups that have formed online."

Speaking to a group of Irish entrepreneurs at the company's headquarters in Silicon Valley last December, Morin outlined Facebook's plans for international expansion and how providing a platform that third parties can develop applications for is key to that strategy.

Facebook is even providing $10 million (€6.8 million) in grants to fund individual programmers or teams who are developing programs to run within its firewall.

But Nimble.ie, an Irish social networking site aimed at teens and twenty-somethings, currently has almost 100,000 users, suggesting that, in Ireland at least, web users want an online social experience tailored to their cultural norms.

Another possibility is that there will be sites with social tools based around broad shared interests or activities. Dopplr.com is designed for frequent travellers who want to share their travel plans with their network so that they can meet up, eg should they happen to be in New York at the same time. Rather than sharing all the minutae of your life, Dopplr is guessing that people will simply want to share what's relevant to the context.

One of the internet industry's deepest thinkers and most successful serial entrepreneurs, Marc Andreessen, is betting that Facebook, MySpace and YouTube have got it wrong. Andreessen, who was the co-founder of the original web browser company Netscape and recently sold his Opsware software company to HP for $1.6 billion (€1.1 billion), founded Ning in 2005 to provide the tools to allow even non-technical users to create their own social applications.

Ning's chief technical architect, Diego Doval is the holder of a PhD in Computer Science from Trinity College, Dublin. He describes current social sites like Facebook, MySpace and YouTube as walled gardens and compares them to early online services such as AOL and Compuserve which were made redundant by the Netscape browser which made the web's open standards available to all. Similarly, he says Ning is bringing the same freedom to the social web and in the future he believes there will be millions of social networks in the same way that millions of websites blossomed once Netscape became popular.

Ning is well on its way to achieving that vision - some 130,000 networks have been created on its platform by almost 70,000 users. The networks range from MySobrietySpace (for recovering alcoholics) to Firefighter Nation and are created not only by individuals but by media companies such as CBS and other technology start-ups like Mahalo.com.

"I love the Facebook hype because the number one thing that will kill a start-up is the lack of a market," says Andreessen. "Facebook is educating millions of users around the world about the possibilities of social networking."

In response to services like Ning, last year Facebook opened up its platform so that anyone could create a program that would run within the site. Much has been made of the number of developers that are creating applications for Facebook, but how many of them are actually anything more than questionnaires? According to Morrin, over 8,000 applications have been created for the site by over 150,000 developers - figures that have probably expanded again since he spoke in early December. One of the most popular applications is Scrabulous, which allows you play Scrabble online against your Facebook friends. But Scrabulous has been available at scrabulous.com since July 2006 and could be made available to run within Ning networks or any other site that builds up a head of steam.

Facebook executives trumpet the fact that they are opening up the platform to third parties as a sign that they want to be open and share. "Third party developers can access anything for any user except their e-mail address and phone number. We are not trying to be closed," says Morin.

But in reality it is a "walled garden" - a fenced off area of the world wild web (sic) where users can interact in relative safety. At the time of going to press, a spat between high profile technology blogger Robert Scoble and Facebook brought this to the fore again. Using a tool from contacts sharing site Plaxo, Scoble attempted to extract the names, e-mail addresses and dates of birth of his 5,000 Facebook friends so that he could invite them to connect with him on Plaxo.

Facebook automatically bans users who run automated scripts on their accounts and within hours the blog world was abuzz with discussions of whether Scoble was engaging in identity theft or was a champion of open standards and data portability.

Increasingly there are concerns amongst the bloggers and technologists who concern themselves with matters of privacy about ownership of what users contribute to social networks.

While that debate has still to filter down to the millions of people who happily use the sites each day to share intimate details of their life, it is only a matter of time before it does.

Smaller groups that more closely match our real world relationships will not de facto solve this problem. But it is a lot easier to have granular rules specific to the needs of a small group than one-size fits all complex legal document to cover millions of users in hundreds of different jurisdictions.

Ning allows anyone who creates a network to write their own terms of service that members who join the group will be bound by.

At the moment the development of social networking sites is being pulled in different directions by the necessity to turn their large database of registered users into money and the desires of their users to communicate in new and more efficient ways.

The site or service that can satisfy both of those competing needs simultaneously is best placed to succeed.