Google's OpenSocial: Strategy, money and the art of war, err APIs

Google rolled out its OpenSocial initiative--along with nearly every big social networking player not named Facebook--and the response was fairly overwhelming. Developers and techies tend to do that, but Google's OpenSocial effort goes well beyond a bunch of APIs. Let's not forget the business strategy.

For the uninitiated, Google's big news on Thursday was that it launched OpenSocial, a set of APIs (application programming interface) so Web sites can build interconnecting social applications. The big plus: Developers only have to learn one API. Here are all the must sees to get up to speed: Google's FAQ, coverage from Dan Farber and David Berlind, video and audio and Techmeme where coverage from around the Web is rounded up. Update: Jeremiah Owyang has a timely post on explaining OpenSocial to executives.

APIs are great and they get developers jazzed, but they don't mesh all that well with my prism of the world. I'm more of a business strategy, art of war, follow the money type of guy. Luckily, this OpenSocial effort has a big chunk of all of the above. Google is really deploying an art of the API strategy and where things go from here is going to be worth watching.

By opening up APIs to a bunch of social networking sites, Google does a lot more than this company line in its FAQ:

"We're just providing some technologies so the web as a whole can become more social, because that's clearly what users are interested in."

True--to a degree. Google is really surrounding Facebook, trying to rope off Microsoft's ad network, which powers Facebook, and grab more inventory for its own network. It's not a zero sum game, but the strategy is notable. The OpenSocial initiative by its very nature implies that Google and its merry band of social sites is open (therefore good) and Facebook is more closed (less good). That's why you're getting these AOL-Facebook analogies as Marc Andreessen notes are off the mark.

So what are the big takeaways if you're more interested in dollars than APIs? Here are a few ideas that will apply to everyone from users, to strategy folks to corporate IT managers.

• Maybe Facebook is worth $15 billion. In general, Facebook is a nice site and service. Perhaps it's a great business too, but I'm wary of the hype. However, if Facebook can get Google to line up all of these social sites in the equivalent of a Silicon Valley dogpile the site must have some mojo. Google is using the surround tactic to rattle Facebook. The big question is where Facebook goes from here. It already has an open (albeit proprietary) API. Does it join Google's band? Or does it proceed as it has been. Why wasn't Facebook allowed in?
• Is social networking a feature or just an API? Facebook is expected to be a booming business. Google with its OpenSocial may be commoditizing social networking apps. That won't happen today since each social site will have its own container. But is it really a big stretch to see these APIs somehow sprinkling Google ads around.
• It is so hard to sneak up on the top dogs these days. A decade ago, the approach to thwart an upstart was to bundle, give product away for free and use your girth to squash a smaller rival. Think Microsoft meets Netscape. Today, it's a different game. Open protocols rule. The end game is still the same though. Under the guise of being open you can line up every competitor of a rival and still potentially squash the upstart. You think MySpace is really doing OpenSocial for the greater good? Of course not, MySpace is scared to death of Facebook's growth rates.
• Developers are important but users may not follow. In the tech industry developers are everything--in fact developers are Microsoft's secret sauce (talk to a developer about Microsoft and then talk to some pundit--the disconnect is huge). Thursday's news was all about developers. Users are still on Facebook. Over time we'll see if social networking habits change over a few APIs.
• Social networking: Feature or business? Google with OpenSocial could commoditize social networking. Just wait til profiles and identities are portable (it'll happen). The feature vs. business question is far from resolved.
• Corporate IT folks need to pay attention. Rest assured that these APIs are going to squeak into your enterprise. Are OpenSocial APIs and outside mashups friend or foe? How about security? Meanwhile, Google's take on identity management was murky at best. Dennis Howlett notes:

No enterprise is going to allow applications onto their networks that don’t have clear, unequivocal and auditable ID management policies.

• Will OpenSocial herald an era of open APIs in enterprise applications? Initially no, but we'll see.
• The communications lessons to be learned. Almost as interesting as the OpenSocial was the flow of information. Real-time blogging and Twittering questions to a surrogate to ask questions were commonly deployed. What's this mean for the enterprise? It means it's impossible to control information. While IT folks are worried about intellectual property walking out on a USB drive they may want to ponder what happens when some insider item is Twittered.
• Where's the money? Monetization is going to be very interesting. Naturally, Google assumes its partners will use AdSense. This sets up an interesting battle of the social ad networks in the future. Facebook/Microsoft vs. Google/everyone not Facebook.