Xiaonei and the Illusion of Social Networking

Starbucks Lido Beijing

Body now rejecting caffeine

1308 hrs.

Kaiser Kuo of Digital Watch delivers an erudite, subtle, and telling analysis of social networking site Xiaonei's cautious steps toward adding third party applications to its site. 

If you are not a regular user of social networking sites, applications and widgets created by third party developers are really what makes these sites fun and engrossing to a wide range of people, and make it possible for you to maintain contact with someone for the cost of a few clicks. Taking a more macro, analytical view, third party developers are playing the main role in turning social networking sites from mere toys to something approaching an operating system for your online life. 

A Timid Effort

Xiaonei is, to the casual (and semi-formal) observer, an effort to create a Facebook with Chinese characteristics. What has been lacking to this point is third party applications, so the site has lacked much of the mojo of Facebook and Friendster. 

Facebook has an immense selection of third-party applications already, numbering over seven thousand. Friendster, for it's part, is not only already extremely developer friendly, it is helping to drive the Open Social standard that will make it easier for developers' widgets and applications to work on a wide range of social networking sites. Facebook is arguably the global perceptual leader, and Friendster has more users in Asia than any other social networking service. 

All of which makes Xiaonei's baby-steps into the world of third-party developers all the more perplexing. Certainly the company's managers, their investors at Oak Pacific Interactive, and (most important) the company's users must know in their guts that Facebook and Friendster are coming. Why aren't they putting more into the effort to get it moving forward faster?

Cannot, will not, or don't want to?

Four possible answers:

1. The Xiaonei team does not feel that third party applications will be important in China. I'll grant that this is possible, but one would think they'd err on the side of caution.

2. The Xiaonei team understands how important this is, but lack the managerial or technical skill to pull this off much faster than they already are. 

3. The Xiaonei team believes that as a local site they, like Sohu, Sina, and Baidu, are going to be the winners by default over the foreigners anyway, so why bother working hard on a third party developer program? Just make a few noises in that area so you can stick it into the prospectus. 

4. Xiaonei is less about creating an "insanely great" (to borrow Steve Jobs' superlative superlative) social networking site than it is about creating a vehicle to increase the wealth of its investors. 

Landing craft on the horizon bearing 090, Sir

Of those four answers, three suggest hubris, and one questions competence. Xiaonei can afford neither. International web players succeeding in China is no longer the laughable prospect it once was, and the SNS horde are learning from the mistakes of their predecessors in China. They'll be here soon.

I actually think we will see a more determined effort on Xiaonei's part in the future. Oak Pacific now has its own adult supervision in the form of Masayoshi Son following Softbank's $430 million cash injection. Mr. Son has a reputation for impatience with half-measures. He will not accept the idea that he has invested in a company that has created the illusion of social networking rather than delivering on the full promise of a "China Facebook.".