Social networks challenged to remain relevant

When an attendee at the Consumer Electronics Show in Las Vegas on Monday learned that the Caramel bar at the Bellagio hotel had mistakenly given someone else his corporate credit card, he didn't call American Express.

Instead, he went to his room, fired up the Internet, and searched his social-networking sites to figure out where he might locate the person at the conference, using the name given to him by the Bellagio staff, which still had the other man's American Express card.

The attendee, who asked not to be named, used his LinkedIn social-networking account to find out that the person he was looking for worked for wireless networking company Netgear and was also a CES attendee. He used this information to leave a voicemail message for the person at his office and send him an e-mail, and went to Netgear's booth to try to locate him. Eventually, the attendee was able to retrieve his card when the person who had it by mistake returned his messages.

As the popularity of social-networking sites grows, so does the opportunity for Web users to access information about people both inside and outside their personal networks. While that information in and of itself can have relevancy in specific situations -- such as in the case of the attendee who lost his credit card -- not all of it is useful or interesting to either the users on the site or the advertisers who support the site's revenue structure.

Now that social networks have reached a critical mass of users, their next challenge is to ensure they can continue to provide value to users and advertisers beyond giving people a crowd of online friends to boast about. At CES this week, executives from companies such as Yahoo, AOL, and iMeem discussed the next step for social networks as they continue to evolve and serve the changing needs of their communities.

David Liu, senior vice president of social media, messaging, and home pages at AOL, said Tuesday at CES that the key to the success of social networks is that they allow people to tell their "stories" online to make connections that can exist both online and in real life. Communities that allow people to do this in a user-friendly way will have the most success in the long run, he said.

"There's a tremendous opportunity for the community to do this the right way," Liu said. "I think the networks that will be successful and grow will be the ones that allow people to tell these stories in their own words with the most open ... platforms possible."

However, the expectations of users differ from those of advertisers, and companies running those sites must serve them both. So while users may find personal information -- such as someone's vacation photos -- interesting and useful, advertisers probably will not, unless they help them target ads to those users.

So far, the information gleaned from social networks has been largely untapped by advertisers, said Steve Jang, chief marketing officer and head of business development for social-networking site iMeem. iMeem provides a social-networking site based primarily on people's music interests, letting users post playlists and stream music and video content for free.