Hearts, Minds and the Mobile Address Book

Mobile operators face a new battle for control of the customer relationship. But this time it's not about ringtones, games and search; it's about what is quite possibly their most valuable asset -- the application you use to make a phone call.

The challengers are the online social networks, with their growing reach, power and innovation, and their legions of developers. When online social network meets mobile phone, the frontline is the humble address book.

Worldwide, nearly 600 million people visited an online social network in June 2008, according to comScore. The leading social networking sites -- Facebook, hi5, MySpace, Friendster, Orkut and Bebo -- added 88 million new visitors in the first half of the year. People keep coming back; 96% of online tweens and teens log onto a social network at least weekly.

Now online social networks are moving from the desktop and laptop to the cell phone, with versions of Facebook and MySpace for Blackberry, iPhone and the mobile web, as well as a new group of “social network aggregators” like Yahoo's oneConnect. In less than a year, more than five million of Facebook’s 100+ million users have mobilized.

 There is a larger, more ubiquitous, and far more meaningful social network than Facebook, hi5 or MySpace, or all of the online social networks combined; it’s the network of people that you, I and everybody else actually talk to (and get together with) each day. It’s our real social network, and includes people, businesses and organizations not part of any online community. And mobile operators are smack in the middle of this real network.

Your real social network is not listed on any web site. More likely, it’s in your mobile handset’s address book. Because in the real world, you “friend” someone by exchanging phone numbers. And while we text, IM, e-mail (or forward articles, jokes and other curiosities) to a larger group of friends and acquaintances – some of whom we haven’t talked to in years -- the more we actually talk, the closer the bond.

Territory is already being staked out. At CTIA last week, Yahoo called its oneConnect app “a revolutionary social address book” that brings together your people and your life with a full-featured phone book that integrates contacts from your Yahoo address book and social networks. In the same week, Visto announced its own “living address book” which combines e-mail, social networks and messaging into one user interface.

The strategic importance of the mobile address book as social network has not been lost on mobile operators. For example, T-Mobile’s myFaves® plan allows you to call your five favorite people on any network for free. Alltel launched its My Circle plan, where subscribers choose between 5, 10 or 20 numbers to call for free.

By making it easy (and affordable) to stay connected to the people who matter the most, these operators have successfully positioned themselves in the middle of their subscribers’ real social network. And if these limited, “mini social networks” are sticky, imagine how strong the customer bond would be if the mobile operator were in the middle of the subscriber’s entire social network?

Operators are waking up to the coming battle for the address book, and more importantly, who will power it. Vodafone has already made an acquisition: Zyb. Partnering for innovation is essential.

I work with a new company called Skydeck that has a different approach to the market. Skydeck combines a subscriber’s address book (from Gmail, Yahoo, Outlook or Plaxo) with their call records to map their real social network – the people that they actually call and text most often. Skydeck helps users keep track of their network and all their mobile calls and text messages with a Gmail-like web interface, and is a precursor of things to come.

How strong are the challengers and how big the stakes? The leading social network sites are as big or bigger than any domestic mobile operator, are growing faster, have repeatedly demonstrated innovation and virality, and have captured the hearts, minds and eyeballs of the most prized demographic – the affluent, educated, Internet-savvy 18-34 year olds that operators are relying on for growth.

Today, mobile operators are well-positioned n the middle of their subscribers’ real social networks.  The power, reach and innovation of the leading social networks and their community of developers could be the mobile network operators’ biggest challenge, or opportunity, in the battle over the “social utility” that is your mobile address book.

Originally published in TelephonyOnline on Sept. 19^th.

 

Tags: Skydeck, T-Mobile, myFaves, Alltel, My+Circle, Yahoo, oneConnect, Facebook, MySpace, hi5, Vodafone, Gmail, Plaxo, social+network, mobile, address+book

Comments

[Antony Brydon]

I though this was article spot on - I haven't seen anyone frame the threat and opportunity to the carriers as clearly as you do in the first couple paragraphs. I think that these apps - FB, OneConnect, have the potential to become the phone's start/home page and control the customer relationship.

I also think they have the potential to abstract the phone's platform and network and make it less relevant, akin to what browsers can do to windows. If the app on the phone allows multiple non-voice channels (FB messaging, iM, skype, etc) and the connection varies (cellular, wifi), it will be hard for the carries to retain control without draconian measures.

My own (unsupported by research) view is that the concept and idea of address books (distributed, uncorrelated, unverified representations of information about people) will become outdated or disappear altogether - replaced by social networks and contact permissions that users specify. I can pull up my network of (reciprocated) contacts on LinkedIn on my iPhone, but I can also pull up individuals I'm not connected to in their general search. No reason why my unsolicited phone calls to these people can't go straight to voicemail (Slydial) or to voicemail transcription (Phonetag).

Skydeck may have an advantage because the I will argue that the most true social network is the call log that Skydeck captures, vs. the address book. Phone address books were often as noisy as their web address books (usually because they are synced them from an Outlook address book), but the call log (who and how long) is much more accurate. Here, 'friending' is more than merely exchanging numbers, but connection via phone for a meaningful period of time.

[Derek Kerton]

Whitey,

Good post. Couldn't agree more. In fact, did agree on the blog I've been writing on for the past 7 years. Check it out, circa 2004:

“For this reason, carriers that control the contact list are in a much better position to 'own' the communication experience. Hmmm...makes you wonder about carriers like Cingular who are putting Yahoo! IM clients on Cingular phones... Do you think Yahoo! has thought of PTx and the carriers haven't? Nah, that'd never happen. And Yahoo!, AOL, MSN wouldn't be so audacious as to try to get a piece of the consumer telecommunications spend, would they?”
http://www.techdirt.com/blog/wireless/articles/20041015/122215.shtml

Of course, back in that day, Social Networks weren't in existence as they are today. The social nets of the day were the IM buddy lists. The threat has morphed, but the implication to telcos is still the same.

Owning the launching point of communications will be critical to owning communications services. This is separate from owning the pipes.

In 2005, I opined:
“In my opinion, the biggest of sustainable advantages is customer loyalty borne out of user customization, specifically the "buddy list" or contact manager. Once a user invests time customizing preferences at a given site, and uploading their contact data, they will tend to use that service to connect with their buddies (and thus incur any communication fees).”
http://www.techdirt.com/blog/wireless/articles/20050824/113418.shtml

I think you've brought my thoughts up to date, and added some fresh thinking. Skydeck is certainly pushing the limits of this sector.

[Peter A. Howley]

Another great article, Whitey.

Social networks for many "kids" have almost replaced voice contact. It seems to me they'd rather SMS or IM, impersonal forms of communicating, in place of direct voice communications. That social networks including the kind you described are powerful and growing astronomically, no one can deny. But, I suspect there is more going on, partly a huge focus on "self" (tap tap tap tap "Hey Man, I'm now taking a wee at Starbucks!") and self importance, and maybe even an avoidance of real communications, the kind that does bring one closer to you. Perhaps it's a reflection of the over emphasis on self esteem today over earned self respect. Got no answers, but I'm seeing a trend here besides the great convenience of texting when it's easy and convenient, like during a boring meeting!