The web is being reinvented, and this time it is people – or, more precisely, the personal information and social connections they enter into social networks – who are at the centre.

That view has taken hold in Silicon Valley with in­creasing force this year. Last month it prompted Microsoft to make an investment in Facebook that valued the upstart website at $15bn. And it has led Google to come up with a strategy to try to counter a potential shift in the way the web is organised that could hamper its own long-term position.

The sense of change is palpable in the enthusiasm among a new class of web-based companies that have sprung up, in a movement known as Web 2.0.

“It feels like 1995 all over again,” said John McCrea, head of marketing at Plaxo, an online contacts management company that is trying to develop its own social network. “The social web is as big and game-changing as when the web itself emerged in 1995.”

Classic Silicon Valley hyperbole, perhaps – but when groups such as Microsoft and Google are forced to respond, it suggests a powerful new technology trend has really taken hold.

At the heart of this are all the personal data and the connections to friends and family (known in the industry as the “social graph”) that internet users post on social networks. MySpace emerged as an internet giant on the strength of this, but it has taken rival Facebook, founded in 2004 by the Harvard student Mark Zuckerberg, to take the next step.

In May, Facebook published a handful of “applications programming interfaces” (APIs) for its site – software that lets other developers build their own applications on top of its service, drawing on the treasure trove of personal data held by Facebook. This turned out to be the starting gun for what is turning into a race to dominate the web. Drawn to Facebook’s burgeoning audience, which has now topped 40m, developers rushed to create applications to run on its site.

For now, many are trivial – they include, for instance, the ability to throw (virtual) dead sheep at your friends – but it has been enough to give Facebook an early lead in what could be the next big model for the web. “They’ve already secured a large amount of developers and mindshare,” said Jia Shen, co-founder of RockYou, a leading developer of applications for social networking sites.

So powerful has Facebook’s strategy proved that MySpace has been forced to respond with an announcement of a similar, though more cautious, plan.

Google, by banding to­gether with other social networks to offer a common, “open” API, now hopes to use the combined 100m audience of all these separate sites to draw developers, who already find themselves stretched be­tween different websites, away from the Facebook technology.

The move comes as companies have “woken up to the threat of a walled garden” in social networking, with a number of powerful and independent “islands” of data emerging in the absence of a common approach, says Mr McCrea.

Creating a standard API is only the first step. Google’s vision, according to Joe Kraus, the developer in charge of the project, is to push for more open interfaces between rival social networks, so that personal data are no longer trapped in any one system.

Such visions are likely premature, says Max Levchin, the founder of Slide, a leading application maker, but Google’s move to embrace outside applications on social networks nonetheless represents a significant step forward for what is still a nascent industry.

“We are getting out of the age of Pong and into the age of Ms Pac-Man,” says Mr Levchin.

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