Mobile social networking space getting crowded

About 200 companies worldwide are focusing most or all of their attention on the mobile-social-networking market, and the number is growing.

A few global web powerhouses, such as Google, Yahoo and eBay, are even turning their attention to this market. The majority of players, however, are smaller software companies that are developing applications or components designed to enable a mobile community feature. Many vendors in the sector - such as Gypsii (formerly Benefon) - have reinvented themselves as social-networking-technology providers after hitting dead ends in other areas.

The 200 companies focusing on mobile social networking do not include mobile network operators or companies focusing on the many social-networking opportunities on the fixed Internet exclusively.

Beginning this year and continuing for the rest of the decade, mobile operators and those with online communities will be expanding their investments and speaking more publicly about their participation in the mobile-social-networking ecosystem, analyst Christine Perey predicts in Mobile Social Networking: Communities and Content on the Move, a report recently released by MM publisher Informa Telecoms & Media.

According to the report, nine types of companies - or segments - are involved in the mobile-social-networking ecosystem, fulfilling three roles.

But that doesn't mean that the companies will be pigeonholed. Every outfit in a given segment will carve its own path, the report predicts. And many companies participate in two segments: For example, a mobile operator might also be running a mobile community, or a mobile-social-networking-platform provider might also be operating a mobile community on the platform. Also, many companies whose core business is to offer a particular technology or business model have elected to set up their own mobile communities to demonstrate their technology to other platform providers and mobile community operators.

Although they are not household names, mobile-community-platform providers play a key role in mobile-operator-branded communities. In the future, they will also provide value to independently operated and branded mobile communities, the report states.

This segment of the mobile-social-networking industry is composed of platform developers that offer server or client application software for deployment in data centers or as hosted services on which any mobile community operator can build and operate community services. Frequently, the same company has its own service running on the platform, to demonstrate to potential community customers the unique features it offers and to build a dedicated user community with which to selectively control and test new features.

Third-party platforms contribute to the evolution of the mobile-social-networking industry in a variety of ways.

First, they reduce time-to-market and capex. Building a robust and scalable mobile-community-management and -maintenance platform requires significant financial resources and time. A company wishing to run a community might have an idea for a service but not the skills to build its own platform or the desire to train software engineers or hire in-house developers to design, build, test, support and maintain the platform. In this case, using a third party's platform reduces time-to-market.

Second, use of a third-party platform increases the chances that a mobile community will be promoted by a mobile operator. Usually, the mobile platform providers have established, as part of their core value proposition, relationships with mobile operators. When a community uses a platform that is already part of an operator's infrastructure, it increases the likelihood that the community will get onto the operator's deck and become part of its mobile community strategy.

Third, there is the possibility that having multiple community operators using the same platform will reduce the effort and investment necessary to enable communications and messaging between communities. The alternative to having common platforms is for the community operators to deploy and operate "gateways" that translate between the proprietary platforms of the community operators.

Mobile-community-platform providers can offer value to the hundreds, if not thousands, of emerging community operators that do not want to build, launch, manage and maintain their own software and infrastructure. The architectural options are to offer any community operator secure user-data repositories on a larger, globally managed platform or to have dedicated servers for each community but to manage them centrally.

By aggregating many communities on a single platform, the communities and the platform provider can negotiate lower-cost contracts, based on volumes of necessary network resources, such as bandwidth and storage capacity.

And platform providers could make their offerings more attractive to community operators by providing moderation services - such as policing chats or vetting uploaded content - alongside software and service management.

Once a community is deployed on a particular platform, it would be costly and potentially disruptive to change platforms, resulting in a relatively stable business for the platform provider, if managed properly.

Mobile-community-platform providers could also increase their value by providing local-language interfaces for international communities.

Service aggregation - offered currently by third parties, such as mobile community enablers - could be added to such a platform, increasing its value to community operators and increasing margins for the third parties, which would not be required to invest in marketing and sales to individual communities.

The best business model for mobile-social-networking-platform providers to follow is a revenue-sharing relationship with community operators, but such a relationship requires a high level of diligence and careful analysis of the business opportunities presented by each community.

Platform provision is a technology-intensive business, and providers must be highly attentive to technology and business trends and the needs of regional customers. Because of the varied patterns of take-up and technologies in use in different countries and regions, it is likely that regional and local expertise will be necessary.

Working with dozens - possibly hundreds - of mobile network operators worldwide would require extensive customer-relationship and financial management. A platform provider might also have to pay for business-analysis and marketing services to ensure that its community-operator customers launch and grow successfully, which would translate into revenues for the platform provider.

As with any hosted service, a platform provider must maintain a high standard of service reliability and performance - most likely through service-level agreements - to ensure customer satisfaction. Measures would include ensuring security of customer data, keeping delays in performance below an agreed level, fixing bugs and establishing customer-support procedures, among others.

The primary drawback for mobile community operators in using a third-party platform is that the operator is dependent on the supplier to fix bugs, change features and add features to differentiate the community from others. If the community operator's needs are not met by the platform provider, its service will be unable to grow.

This  article appeared in Mobile Media,  a sister publication of telecoms.com

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