How the Portals Will Win the Social Networking Wars

Every time I make a prediction, there's a better than 90% chance I am going to be wrong. But this one, you can take to the bank. The portals - AOL, Yahoo, Google, Windows Live, all of them - will be big winners in the social networking wars.

"What," you say? "How can that be? I already spend all my time on Myfaceborkutspace. My life is there. My friends are there. I lose an hour each time I even log into Myfaceborkutspace. Portals are so Web 1.0. I am all about Web 3.14159265."

I can't rebut this argument. Social networking is certainly rising and there seems to be no end in sight to the phenomenon. However, what I do know is that people will jump around from one Myfaceborkutspace to another and not all of them will win. This is particularly going to be true as social networking evolves from a destination into a feature of every web site.

So what does this have to do with the portals? Actually, a lot. They will be big winners, no matter which social networks dominate over the long haul.

The portals own the glue that keeps many of us connected to our structured social networks (e.g. Myfaceborkutspace) and the looser ones - e.g. a personal network of contacts. And that glue is a trusted communication system that works with every person and social net.

No matter which social network(s) you participate in, even if you float, you're going to turn to your trusted communication system to manage it all. This will include any or all of the following: a) web-based e-mail, b) instant messaging (which is nowadays integrated), c) RSS and d) telephony tools like Grand Central. And who dominates those? Yup. The portals - all of them. They have a pretty good lock in, especially as they give you all the storage you need.

This is not going to change. The big blurring of work and home technologies is allowing people to achieve greater flexibility in thieir lives. Webmail and IM are big drivers here. We're hooked but good because we use these four tools to also manage our interactions on social nets. I expect the portals will eventually build in new features that make this even all the more efficient.

Further, a lot of interactions you have within a portal site are monetized. So more social networking translates into more bacn, emails and IMs from contacts you want to follow, RSS feeds, voicemails, etc. This cascades into more ad clicks, searches and banner/rich media ad views. The result? Free money for the portals. Thank you Uncle Myfaceborkutspace! Even better, they didn't have to build a competitor. They just sit back and simply cash in.