The Verticalization of the Web

Having just peripherally experienced the dot-com wave of the late ’90s, I am only able to refer to that era on a loose basis.  One of the trademarks, as I understand it though, of the times was a near chaotic amount of activity and websites. 

With the current Web 2.0 era in full throttle these days, a similarly disjointed Internet has reappeared.  This blog site I found today does a nice job in several instances of capturing the current chaos:

http://www.sramanamitra.com/blog/572

I have significantly more time these days to peruse many of the nooks and crannies of the Internet than I had in years past and I’m having a tricky time in some cases still keeping up.  There are websites for just about everything and those sites are complimented or expanded with microsites, blogs, wikis, widgets, podcasts, personalized versions, developer’s sites, yada, yada.  The vernacular itself is sometimes hard enough to keep up with let alone a comprehension of the products and innovation’s themselves.

One particular area of the Internet that appears to be taking more shape these days, however, is the notion of verticalization.  I refer to this term, which I may or may not have just coined, in regards principally to search and social networks.  Vertical search is a fairly self-explanatory concept.  There are search sites for travel these days, the blogosphere, media and much more.  The recently launched Mahalo  is a human powered search platform that searches across a variety of verticals.  I presume that Google, and maybe one to two others, will consolidate these opportunities if their aggressive M&A activity continues or will simply built better technologies themselves to render them moot (as has started to occur to some degree with Google Blog Search vs. Technorati.)   

More personally interesting to me right now is the notion of vertical social networks.  I find this concept interesting in large part because I’ve never truly grasped the on-going appeal of the social network platforms of yesterday or even today (eg Friendster, Facebook, MySpace.)  One builds a profile, interacts with friends, joins groups, posts interesting stories but then what happens over time?  There is no arguing at this point that a couple of the social networking platforms have built something very valuable for the short and long term but, beyond one or two of them, how do they truly provide purpose, usage opportunities and value? 

There are two principal solutions being developed and funded these days to answer that question:  virtual worlds/avatar plays and vertical social networks.  Virtual worlds seem like they will be an important part of the future Internet, particularly as they become more mainstream, but there remains the pervasive problem of operational scale and heavy capex funding for those plays.  The question for vertical social nets is more fundamentally a question regarding niche versus mainstream.  With so many verticals to consider and capture (business, moms being moms, music and other media, professor ratings, lawyer ratings, etc) very few folks out there in the pervasive Internet have the time to spend hanging out in such a non-consolidated environment.  Hence, not all concepts will win even if the purpose and objective is arguably more succint, defined and “valuable” than on a major community platform. 

That said, I have no question that certain “niche” networks will work in the world of verticalization.  This article about the 11 million plus users now actively on LinkedIn speaks to that in the business vertical:

http://thebrowser.blogs.fortune.com/2007/06/11/linkedin-says-it-owns-business-networking/

Further, if the vertical social net is able to be constructed in such a manner that the model is cash efficient, the product is engaging but simple and the marketing plan is heavily viral, one can select a more bootstrapped route of funding (ala Craig’s List) or a more institutional heavy route depending on their profile and preferences.  Fred Wilson’s blog speaks to this type of model from a 2006 post:

http://avc.blogs.com/a_vc/2006/03/my_favorite_bus.html 

This is an exciting time for technology and the Internet but it’s also a time where structure and consolidation is becoming necessary to wade through the chaos.  Verticalization is one of the keys to that occuring.  And, those social networks that are vertically focused yet expansive enough to reach critical mass will likely be those, in part, celebrating before any future bubbles burst in the 2.0 era. 

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