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Adam Zawel has a thread over on INmobile following our panel discussion on mobile social networking at the AlwaysOn Stanford Summit a couple of weeks ago. He put up a poll asking the community “what does winning in mobile social networking mean?” The majority of respondents chose “Most users/depth of engagement.”

I was working on a related blog post this week, so I posted this comment on the thread:

First of all, applying web-centric measurements to anything in the mobile space is a fool’s errand akin to trying to apply print-centric measurements to radio. Furthermore, and in my opinion, it is myopic to apply advertising-centric measurements to social networking in general. “Most users” and “depth of engagement” are metrics that are used to indicate the potential to reach eyeballs (and for some measurement of time or engagement) so that a value can be placed on the ad inventory that supports the business. This assumes that a social networking site is a discreet and stateful experience that contains all of its users within its confines, creating a closed marketplace for communication, which drives engagement, which drives advertising dollars.

There is nothing wrong with this approach, mind you, I just think it is myopic:
- What will be the effect of having a portable identity and profile that can traverse the traditionally stateful nature of the now-popular discreet social networking sites?
- What happens when Mozilla adds a profile, a network address book, and chat functionality to Firefox?
- What happens when Microsoft adds social tools to Outlook, such that you can either create a new profile or bring your own from MySpace or Facebook or Hi5 or whatever?

If “social networking” can become a feature of other forms of engagement, then how relevant is “depth of engagement”? In this scenario, engagement would get even lighter, but user-centricity would become more important. Advertisers won’t be asking “how long do people sit and look at your site?” Rather, they will ask, (as they do now of Google) “How many people use your address book as the first place they start when initiating a connection of some sort?” It won’t matter how many user go to Facebook, because Facebook as a website will cease to exist though its many features and tools will be atomized and distributed across other consumer touchpoints. While I may never actually “go” to Facebook, I will be using it transparently every time I use my browser or my email or my mobile phone.

In all likelihood, the current winner in social networking, (based on ad-centric measurements) MySpace, will end up also winning in the second generation of social networking by using their leverage to become the de facto standard profile engine as well as the “address book in the sky” that everyone goes to first to conduct all of their personal communication.

Great. Now take this potential evolution of social networking as the first place you go to initiate personal communication and apply it to the mobile space. Rethink what your address book currently is. Rather than a static collection mostly of PEOPLE that you know, imagine a dynamic list of CONNECTIONS to people, places, businesses, media, objects and services, some of which you know, some of which you want to know and some of which want to know you. Furthermore, throw away the notion that establishing these connections will be based on the mobile-centric “phone call” and instead think about all the ways that such an active directory could make connections - through a browser, with your camera, using location, via a map, on your calendar, in your media player, via text or via voice.

In this way, “social networking” gets broken down into its component parts and embedded throughout your mobile device, fulfilling your future expectation that your most personal communication device should be able to facilitate your evolved notion of “communication.”

I would further note that when this future is realized, it will mean an evolution of personal communication wherein everyone on the mobile value chain wins, including OEMs, carriers, and a host of communication service providers all working together to make connections more transparent and more valuable.

RCR Wireless lets me write for their Reality Check column now and again. Here is the link, and the text is below for those subscribing via RSS…

Along with every one of my friends in this industry, from entrepreneurs to product managers at carriers, I have been lamenting the state of our industry’s service model for several years: You can have the best product with obvious consumer value with high relevance in the mobile space, and it will absolutely tank when the carriers “put it on the deck” in an ill-named category where it is impossible to find. It’s not the carriers’ fault – they are just doing the best they can with the tools they have been provided. It’s not the OEMs’ fault, either – they are just providing hardware to the specification provided by the carrier.

This is true, but over the past 10 years, RIM went from startup to $67 billion company based on the concept of integrating one very important service (email) into a purpose-built device that was not just easy but addictive for consumers. Danger essentially followed suit with a purpose-built IM device.

Today, a confluence of events is presenting the opportunity for OEMs to embed a class of 3rd-party communication services not just into high-end smart phones or purpose-built devices, but into mid- and low-market feature phones. This is going to dramatically change the way such services are provided and the way consumers use their mobile devices.

“Dumb hardware” is now being forced to evolve. Mobile phones are basically radios on a very large trunked system. The word “terminal” was used until very recently for a reason: A mobile phone was meant as a termination point on the network, essentially completing a circuit-switched connection with another mobile phone. The really hard part, therefore, used to be inside the network, routing all those calls and making connections. Then packet-based networks replaced the circuit-switched world and meant connecting those same devices to information sources instead of completing a circuit. While it is true that operating the network infrastructure did not get any easier, mobile phone technology changed dramatically; no longer “dumb hardware,” they turned into what are basically small computers. This, combined with available mobile broadband networks, means you can now “put the internet in your pocket.”

As a result, the past few years have seen an explosion in the growth of data services on mobile phones. That has meant record sales of mobile phones, and record numbers of wireless subscribers. The downside of this growth in data services is interesting: According to Informa Telecoms & Media, due to flat-rate pricing of data, traffic is growing much faster than revenue. As an example, Vodafone reported for its recent fiscal year a more than tenfold increase over 2007 in data traffic, but only a 55% increase in data revenue. Informa Telecoms & Media is forecasting a 77% increase in global mobile data revenues from 2007 to 2012, with a 1000% increase in global mobile data traffic over the same period. Some sources predict that this trend signals the inevitable devolution of wireless networks into low-margin dumb pipes. Without offering an opinion on that viewpoint, what I can say is that I am seeing an exciting trend toward a robust data service integration strategy on the part of the OEMs.

I am specifically talking about integrating mobile devices with 3rd-party communication services like social networking, email and IM, which are sometimes called the Three Pillars of Personal Communication. I do not mean encapsulating a service like, say, MySpace, in an application and “putting it on the deck.” I mean INTEGRATING these communication services so that they are part of the native handset experience, making them as simple and transparent to use as, say, SMS. Why? Because the shift toward “openness” and “widget-based UIs,” will essentially disintermediate the hardware vendors from providing such services on their own while at the same time will empower them to establish partnerships that were previously off-limits. (Consumers are not likely to use a “Nokia IM” service over AOL Instant Messaging, nor are they likely to use “Samsung Mobile Social Networking Community” over MySpace Mobile.) To compete, the device manufacturers must seek out the high ground and provide a superior native communication experience integrating the 3rd-party brands that resonate with consumers.

This shift is happening now, and I can offer anecdotal insight into the future of feature phones. (My company, Intercasting Corp, is working with several OEMs to integrate these services, and so I have a good vantage point.) Imagine a camera phone that automatically sends every photo you take to Photobucket or Flickr. Also imagine clicking on a name in your address book and bringing up that person’s MySpace profile. Consider the simplicity of having an IM widget that is always on your phone’s home screen. These are examples of small improvements that are very hard to actually do which represent a dramatic improvement to the use of 3rd-party communication services and mobile devices alike. In a couple of years, consumers will simply expect to see certain service providers integrated into their mobile devices because that is where they are already communicating.

Here is some more good news: This is not necessarily an indication that OEMs will ultimately win the “hundred-year war” between wireless carriers and device manufacturers over ownership of the customer relationship. Almost every carrier is fully embracing this approach because they know it will drive service adoption and data usage, and there is massive opportunity for cooperation and collaboration. Everybody wins. But certain OEMs, namely the ones that move first and in the biggest way, will win more: The only negative effect here is to the OEM that does not fully embrace an integrated communication service strategy. As Apple has shown this industry with the iPhone, a better (or just different) approach can resonate with consumers in a big way, and once the bar is raised, it is raised for everyone who wants to stay in the game.

I continue to marvel at the pace of change in this industry, but I have not been this excited about a specific evolutionary branch of the mobile space in a long time. As communication devices, improving to the extent possible the communication capabilities of mobile devices is a winning strategy. Before our eyes, we are seeing what used to be strictly “hardware” companies transform into “software and service” companies, all to the benefit of our industry and the consumers who embrace it.

I was flying back to San Diego from New York yesterday, and it occured to me that fear and greed drive the market…for binspace.

Why are people so eager to get on the plane just so they can sit there and be annoyed by the general getting-on-the-plane activity going on around them? The whole plane leaves at the same time, so it’s not like you get there any faster by getting on the plane first. Also, I don’t think anyone would argue that it is more comfortable to be sitting in an airplane seat as opposed to sitting on a barstool at the airport lounge.

Just like the stock market, it comes down to fear and greed: People are driven by their fear of having no bin space at all, which means having to gate check their carry-on baggage and the ensuing hassle that it represents, not the least likely of which is that your luggage simply doesn’t arrive at all. They are also inversely driven by their greed to have as much bin space as possible to ensure a hassle-free travel experience.

Both of these forces drive early boarding. When you are early, you have bin space options. When you are late, you may have some, you may have none, but it is certain that you will have fewer than if you are early. I find it interesting that seemingly opposing forces can drive the exact same behavior.

The Portfolimno was impacted by fear and greed this week as well…

Not PLAYing nicely
And so I watched with interest yesterday as PortalPlayer’s stock lost around half of its value, dragging the value of the Portfolimno down several points along with it. Apple apparently isn’t going to be using PortalPlayer’s system-on-a-chip in some upcoming versions of the iPod.

The PLAY investors driven by fear are exiting early, as well they should: An inordinate percentage of PortalPlayer’s revenue is driven by iPod sales, and not having that predictable revenue will hurt. But how much will it hurt? Will it mean revenue will decrease commensurate with the stock plunge? Not probably, at least not in the near term. Specifically, the apparent impact is limited to their getting designed out of future versions of the iPod Nano, which accounts for roughly 60% of PortalPlayer’s sales. The most believable speculation is that the iPod’s design and marketing sells the iPod more than the system-on-a-chip inside of it, the future version of which is probably overbuilt (and therefore too costly) for what Apple wants to achieve. Might the same be true of other iPod products? Possibly, and that fear is enough to drive many investors out.

Remember that the reason I added PLAY to the portfolimno had nothing to do with iPod sales. I added PLAY because of the likelihood that they will provide a solution for a wireless media device. Then they announced they were doing exactly that. And now I will wait until the next CES to see what they come up with. As far as PLAY goes, I am still driven by greed over fear: If they are a going concern, the industry will even out, the iPod will lose its stature as the gadget du jour and they will recover from the hit they took yesterday. It may take time, and worse things can still happen, but I am holding my long position in PLAY.

PLAY is now the anchor of the Portfolimno, replacing SNDK, which was showing signs of life then just tanked over 8 points on their forecast of lower component pricing plus some now-included equity-based compensation expenses that skewed results. Analysts were mixed, but investors voted with their feet.

I bought more INSP
The Portfolimno had a bit of cash still sitting around from the OPWV sale, so I put that into INSP ahead of the earnings call next week, which I hope will be positive. The mobile search product is awesome, and is a great way to merchandise content, which should drive more value back to InfoSpace. After getting reoriented last year, this company is definitely on the right track. The T-Mobile search product is rumored to be doing very well, increasing content sales measurably, which should in turn benefit InfoSpace. I hope to hear a little bit about this on the earnings call next week.

Here is a current snapshot of the companies in the Portfolimno since inception on January 5th, 2006, up 6.87% for the year.

VNT +44.79
CHL +21.36
NVT +21.11
QCOM +16.55
RIMM +14.08
INSP +12.55
AMX +11.99
S +9.27
NWS +7.97
IACI +4.19
VRSN +2.38
AT +1.07
SNDK -22.47
PLAY -57.27

Notice I recently added VRSN because they are apparently aggressively buying their way into the space and I believe scale counts for something. I have been wanting to do a post comparing OPWV, INSP and VRSN but haven’t had time for the depth of research and analysis I would like to do. Hopefully I will be able to get around to it soon.

If you have ever read any of my longer posts about data analysis and user generated ecosystems, you probably know that I am a fanatic about communities and the data that is generated around them.

It is not very often that you get to see a community come into life and get to watch the development from the beginning. I had a small taste of that when I was drawn to podcasting fairly early after hearing some of the shows by Adam Curry and Dave Winer. I was actually plugged in one of the early Daily Source Codes for my show The $250 Million Radio Show.

The Podcasting Community has since seen some fractures between Adam and Dave. In a further subgroup of podcasting, a group of us music podcasters came together and formed The Association of Music Podcasting to promote independent music podcasts where we obtain the permission of artists to legally podcast their music. We recently experienced some upheavals within that community with the departure of some of our founding members to work on the commercial side of podcasting and the resulting clash of personalities that naturally occur in communities, virtual or otherwise.

Its part of the natural growth of things and I must say it is fascinating to be an active member in a community and to experience the natural ups and downs that occur. It has been a source of some new friendships for me personally, but it has unfortunately been the source of some new found animosity between other groups of people who previously were strangers who would have otherwise never have met each other if not for some common bond facilitated by this strange thing called the Internet.

With that in mind, we embarked this week on the creation of a mobile community built around the premise that at the intersection of all types of user generated content and sophisticated personal media devices are the elements of a new and exciting community of users willing to create and share their media.

You can spend a lot of time thinking what that world will look like. It’s the moment when it comes to life that a community takes on its own characteristics complete with all the various characters, ideas, and paths of its own. We hoped that Rabble would have the right tools and elements to capture the imagination of those who are currently blogging away, or meeting people through social networking sites, or who understand the potential of location based services. At least that was the idea.

From our initial user feedback and some of the characters we have encountered so far, we expect that at the very least it is going to be an interesting and amusing journey with many unforeseen adventures ahead. If you want to witness a new community at birth and want to help stake out your own mobile homestead, download a copy of Rabble today and see if we hit the mark. We think at the very least you will get a small glimpse of what we believe is the future of media.