Thursday, April 10, 2008

Social Media Middleware

In reading Fred Wilson's recent post about liquidity, a thought came to mind, less from the financial perspective and more from the consumer's. Is there an opportunity for a social media middleware?

He is right that the internet is "decomposing into a vast array of micro-services". I am finding my attention further fragmented as I explore the latest tool - LinkedIn to Facebook, and now to Twitter.

Value is derived when these services are consolidated / integrated respective of how the users could / should / are using them - certainly an unlikely scenario exploited by an M&A play such as Yahoo / Microsoft, or any of the other potentials. I and many others have discovered tools to allow me to compound my activity from one source to another - Twitterfeed pushes my blog posts to Twitter, and Twitter's Facebook application pushes my tweets to my Facebook status. His point that M&A cannot work in this context is evident.

My thought is that opportunity exists to develop a middleware separate from all of these various sources, with the user in mind. This middleware will allow the user to access the various resources as they need to, all from a central platform - i.e. an RSS reader for the social web.

Such a service will not provide the liquidity Wilson advocates, as an M&A or IPO event may. However, if this nut can be cracked, such a service will allow these micro-services to evolve and continue delivering on the value proposition that first grabbed the attention of the early adopter. Surely that can be monetized?


Joe Lazarus said...

Interesting. There are a bunch of companies and orgs focused on something like this... providing glue between social apps (OpenSocial, OpenID, FriendFeed, even the Facebook platform to some extent, and others).

However, I don't think Fred's point is about gaining consumer attention and creating compelling services. He's saying that entrepreneurs don't have a way to cash out other than selling to a big company (and risk getting bogged down in bureaucracy) or doing an IPO (which is nearly impossible today). Services like Facebook and YouTube are probably the best examples. They are wildly popular and provide a ton of value to consumers, but they probably won't generate significant cash flow for many years. If you were Chad Hurley a couple years ago and you had this great hit on your hands but you and your investors wanted some cash, you really don't have many options other than selling to Google, Yahoo!, or Microsoft.

Unknown said...

Yeah, I knew I was off from his basic idea. It was just a thought that came to mind, given his points. I was not thinking of liquidity, but rather I was thinking of value...