A tier based widget economy
Fred Wilson has a post about what he calls the second order network effect, which takes the example of Zynga, a game app network that is distributed solely on social networking sites and now opening up their distribution channel through an API. Basically the Second Order Networking effect is described as:
Because these app networks were built on top of social graphs (first Facebook, then Bebo, soon myspace), these networks are able to leverage the social graph to provide social network utility to app developers. I call this a second order network effect. Building networks on top of social networks produces even more utility to app developers.
This is something I’ve discussed previously (Max Levchin has as well) and how the social networking platforms, such as the Facebook platform, the MySpace platform and OpenSocial are platforms (or social graphs if you love that expression) that provides distribution channels for widget makers.
However since the number of applications available on these platforms are so huge there’s only a few companies that has the quality and the potential to be widely spread and used.
What we’re seeing now is the emergence of tier system on these social platforms. Where big companies such as Slide, RockYou and maybe even Zynga becomes the first tier of app makers, serving millions of users on all social networks. This tier is often not a possible path for smaller companies in the long run, instead you need a second tier. Which then would be the creators of applications that builds on the first tiers API’s. Such as game makers building a game and distributing it through the Zynga API.
The social networking sites is also likely to find a way to provide a more tier based application structure. An possible example of this would be something like the rumours surrounding the iPhone SDK, where it’s expected that the iTunes store will be the official distribution channel of third party applications built for the iPhone.
Meaning it won’t be as open as building applications for the Mac but instead only approved third party apps will be allowed into the iTunes selection. This will be the Slides, RockYous and Zyngas of the iPhone and they might allow independent developers to build on top of the approved application and thereby a possibility of reaching the millions of iPhone users.
Bloggar.se: facebook, social graph, myspace, widgets, zynga
Add New Comment
Thanks. Your comment is awaiting approval by a moderator.
Do you already have an account? Log in and claim this comment.