Why 2.5? Part 3 will address some specific business models. But before the “HOW” I would like to address some factors and analyze the “WHY” there is a case for LBSN.
We are witnessing a new evolution in the online world. The “WHO are you” and “WHAT are you doing” is rapidly evolving to “Who are you” “What are you doing” “WHEN are you doing” and “WHERE are you”. We can fairly say that the WWW became the WWWW
The When and Where pose many questions, most of them associated with privacy. For example:
1- How is the location captured: Automatic by the system, Others on demand, You on demand
2- What type of location notification: Descriptive text (i.e. “At gym”, “at Starbucks”), area in a map, zip code, exact address, a point in a map
3- How is the sharing: Reciprocal, one way, only on authorization
4- Location History: Movement patterns, Tracking, Monitoring
5- Location Ownership: Resale and/or disclose of the information
But the same concerns for privacy were raised before we published our family photos and videos to the world. The fact is that the accessibility of technology creates communities and services. The simplification of web page building facilitated the rise of communities like FaceBook, MySpace, LinkedIN and others. The commoditization and accessibility to digital cameras, camcorders, and webcams has paved the way to communities like YouTube and Flicker or services like SnapFish. GPS devices became a commodity, and soon GPS in a cellular phone will be as common as a camera. As a matter of fact, you can get your position without a GPS (see Google maps) and Location Based Services can simply be added as a feature to mass social networks like Facebook. Location Based Social Networking is not a question of IF, it’s a question of WHEN and the when is NOW.
“A social network service focuses on building online communities of people who share interests and activities, or who are interested in exploring the interests and activities of others. Most social network services are web based and provide a variety of ways for users to interact, such as e-mail and instant messaging services”. [1]
The key of the social networks is interaction, and mobile interaction = money. Who is going to pay the bill?
Virtual meet Mobile: Interaction in the virtual world is free. On the other hand, interaction in the mobile world is expensive. On the virtual world all messaging services are free (MSN/AOL/ICQ/Yahoo messenger) but in the mobile world you pay for every single SMS. On the virtual world email is free (Gmail/Hotmail/etc…) in the mobile world your BlackBerry pushed email comes at extra charge. Even voice services are free in the virtual world (Skype/Jaxtr) but that’s far from reality in the mobile world.
In my next article I’ll address some business models and we’ll see that everyone in the value chain has something to gain: wireless carriers, handset manufacturers, application developers, maps providers, etc. The ultimate question is “What is the real value for the end user?” I doubt you can base your business model on the hope the Facebook / MySpace “exhibitionistic” generation is ready to buy “stalk/being stalked” as a main added value.
As I mentioned above, the accessibility of technology creates communities and services. So, is there a case for Location Based Social Networking? Yes. But as I wrote in my first post, before you start wondering about your business model (profit), think about what is the service and real value you provide to your customers. Otherwise, after the novelty period they will run away or simply stop using it – particularly if they need to pay for it.
9 Comments
Comment by Shaili Jain — December 8, 2008 @ 12:32 pm
Insightful & crisp outline of the LBS ecosystem.
The complexity (product & business model) around LBS apps & services is the biggest remaining challenge as this part of the value-chain is still very new and undefined. The social LBS apps that have worked to some extent are the family finder / buddy beacon types. However, they simply extend the existing social networks. The other killer apps emerging are tied to lifestyle social sites such as fitness, adventure travel etc where location adds an essential & crucial information into the social interaction. The biggest value would be to understand & leverage the semantics associated with ‘WHERE’ and incorporate that into existing web apps & services (including geotagging, behavioral networks, Internet bot services, recommendation engines, hyper local content services etc.)
We, at Abaqus, provide a LBS web app (www.mygeodiary.com) to allow users to record & organize their geodiary and then use this location data across various services on the web (blogs, photo services, social sites etc.)
thx,
Shaili
Comment by Jeroen van Bemmel — December 8, 2008 @ 2:20 pm
Where you say “On the virtual world all messaging services are free” I guess you mean that messaging services on the fixed network use a different business model (often based on advertising / brand value). Likewise, “you pay for every single SMS” isn’t entirely accurate anymore these days – more and more carriers are offering bundles, sometimes with “all you can send” SMS for a fixed fee.
One criterion the value of a mobile carrier is judged by, is its number of subscribers, relative to the total market in which it operates.
Likewise, the value of a social network can be judged by its number of (active) subscribers. However, the comparison falls somewhat short: in principle the addressable market of a given social network is the world, possibly limited by the language(s) that are supported. People can be a member of many different social networks, and few networks are exactly the same, so “relative marketshare” is hard to determine. And of course, subscribers churn away much more easily from a social network, simply by not using it anymore (there is no contractual binding)
Comment by mobile — December 8, 2008 @ 2:32 pm
The idea was to compare the virtual and the mobile worlds in terms of end user spending money. I agree with you, most carriers are offering bundles, but bottom line you need to pay for that. That’s not the case when I use my Microsoft Messenger (that was the context
)
Moreover, If you are a LBS provider and you buy services from M2M operators, those SMS services become very expensive.
Thank you for your comment. You made a valid point.
Comment by Jeroen van Bemmel — December 8, 2008 @ 3:56 pm
Value (as in value chain) isn’t necessarily (only) about money. You could for example have a case where the user gets his/her location sent to all of his buddies, in exchange for money, some loss of privacy, perhaps the right to give the location to 3rd parties, etc.
The value for the user then lies in knowing that his/her buddies know where he/she is (or at some meta-level, perhaps the user considers it ‘cool’ to be monitored). The value for the mobile operator is then the money (direct), but also e.g. the reduced chance at churn, maybe improved volumes of interaction on the network (indirect)
Likewise, for a mobile operator one could analyse the balance between cost and compensation. And although SMS is expensive for end users and LBS providers, for a mobile operator the marginal cost of sending an SMS (either for determining location or sending it to a recipient) is zero.
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