What I'm trying to figure out right now is exactly how Friendster missed their opportunity. Or more particularly, why social networks briefly seemed like they were going to be tranformative, but now appear lackluster and commodity. In this context, "social network" is not just any site that has users and discussions, but rather the specific type of community that has formalized bonds between users, in the sense of a friend of a friend network. More can be read about social networks on Wikipedia.
Friendster wasn't the first social network. Nor was it the best. In fact, even at the peak of Friendster's popular cachet the site was a technical disaster. But it was so full of potential. And I think that most of the potential lay in its ambiguity, in the very real sense that it was bringing people together -- many of whom had never met in real life before -- but bringing them together in a way that lacked an obvious purpose. Yes, it was mostly social in the sense of dating, but it also helped former colleagues track each other down, reunited old school friends, and spawned all sorts of short-lived mini-communities around one meme or another. And all of these things came together seemingly without cohesion or a plan.
Friendster's organic nature and viral growth counterbalanced the inherent cynicism and corporate distrust that characterizes the particular demographic that the network ultimately appealed to the most. Whereas sites like Classmates (not even a real friend-of-a-friend network) looked and felt stiff and managed, the people running Friendster seemed to gain trust by acting like they were utterly incapable of running a professional shop. (Though this theory is somewhat discounted in seeing how poorly Orkut has fared, Google buyout aside -- they felt inorganic and over-managed even while the site crawled to a standstill.)
Social networks are inherently a critical mass game. The key point is this: For all social networks, critical mass is achieved at the moment in which any given potential user feels it is likely that the person they were hoping to find is already there. The potential user may or may not already have an account on the network -- they may be in fact be looking at an invite from an existing user. Or they may be sitting at a sign up screen. Or they may already have an account but still need to make the choice to log in from time to time. And the deciding factor in whether or not the person (or thing) the potential user is looking for is already there is a function of the size of the network over its scope. And, as we saw with Friendster, critical mass can be lost when users stop caring enough to actively participate.
Social networks can not spontaneously spring into existence having already reached critical mass; it is essential that they offer something to the early adopters, to those that arrive before the requisite other (i.e., the object of the network). The "something" that is offered to the early adopter is the gating factor in whether or not the network will succeed and reach critical mass. But, and this point is lost on most of the newest generation of social networks, the offering can not be contingent upon already having achieved critical mass.
A good example of a social network destined at launch for obscurity is the nascent Multiply network. Multiply's special offering is a promising social network based search. Unfortunately, without users there is no data. And without data there is no there there -- there is nothing to search, and thus no offering to speak of. Simply building the network is not enough to make the users come, not when what they are coming to see hasn't arrived yet. (Chicken, meet egg. Egg, chicken.)
Fortunately, all is not lost for social networks. Seeing as how the fitness function for any given network is based on the likelihood that a user finds what they hope to find (or equally good, something they didn't know they wanted, but like just as much), a network can increase their odds of success dramatically by reducing its scope to a more manageable scale. In fact, Friendster's early success was precisely because of its limited scope -- it provided a social network for technically-aware and generally artistic (and/or attractive) early adopters. The limit on Friendster's initial scope stemmed from the feature that allowed users to upload pictures and display those pictures in a place of prominence. This relatively small scope -- hip internet users -- helped Friendster hit critical mass with numbers in the tens of thousands, and it snowballed quickly into the millions of users from there. That the network was advertisement free and somewhat unprofessionally designed helped further constrain the initial scope.
MySpace hit its stride in a similar vein, but attempted to be even more rebellious by letting users upload essentially any type of data, host blogs, and tellingly, rate other user's pictures. Whereas Friendster profiles tend to be clean and more family oriented (as it isn't altogether unlikely that one's mother, or boss, would find one there), MySpace is the internet manifestation of a person's id. And then there is Tribe, which went the other way, seeking to legitimize social networking via promoting professional affiliations and group interactions.
Another example of a network that seems to have reached critical mass is The Facebook. This is a site that achieved some degree of success by limiting the scope -- in this case, to students or alumni of several hundred colleges and universities. In fact, their initial appeal was exclusivity, in that they launched only with a handful of the top colleges -- just enough to bring people in from a small real-world community and form a nucleus. (After all, there is nothing Ivy League students like more than to be reminded that they are Ivy League students.)
New social networks will need to work far, far harder at achieving critical mass. The novelty is long gone (by about two years) for the hip early adopters. A new network will need to offering something that is unavailable anywhere else. A site that merely offers simple refinements of familiar features will not be enough to sustain growth to critical mass. The world does neither needs nor wants a better version of Friendster. If it did, then Friendster, which has slowly been getting better itself, would not be dying. The problem with all of these "me too!" social networks is that they are following the same pattern of all the second-generation auction sites -- critical mass is exponentially harder to achieve for those who arrive late to the party -- it is the second-mover disadvantage.
The next successful social network -- and I believe that one can be built -- will simultaneously offer something for the individual waiting for other people to arrive (or better yet, something so compelling that people encourage their friends to join them), and offer an experience that improves exponentially as critical mass is achieved. The current round of next-gen offerings, such as Yahoo 360, are a start -- far more polished and professional than anything before -- but from what I've seen, they are nothing to write home about -- or more to the point, to write to your friends about.
In order to build the next successful social network there needs to be some there, from day one, for the early adopter. Something for the person that arrives before the network is fully realized. And it will need to carefully manage the scope so that it never exceeds the size of the network. Maintaining that precise balance is not impossible, but only time will tell whether there will be another success story in this space.