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Microsoft's Biggest Threat: MySpace?

Panelists at the Software 2007 Conference theorize what kind of real impact social networks are creating.

Imagine for a moment that Microsoft's biggest threat comes not from Google, but from MySpace. That view was advanced by Slide CEO and PayPal co-founder Max Levchin in a panel discussion at the Software 2007 Conference on Wednesday.

"MySpace is what's going to take on Microsoft," said Levchin. Google, he said, doesn't have that much data. Never mind that Google's recent personalization push is all about getting that much data and more.

Social networks, said Levchin, are becoming operating systems in the sense that they create consumer lock-in through control of user data. And just as Microsoft dominated the desktop in the '80s and '90s, he expects social networks to dominate in the years to come. He subsequently referred to social networks as platforms, which may be a more appropriate metaphor.

Whether social networks are operating systems or platforms or the next bubble, Levchin's point has some merit. User lock-in goes a long way toward explaining why MySpace is reportedly planning to acquire Photobucket.

Brian Behlendorf, founder of Collab.Net and a founding member of the Apache Software Foundation, expressed some skepticism about Levchin's view, noting that social networking sites aren't quite that "sticky," and that people can be part of multiple social networks. He said that an open data movement might well arise and noted that people are developing screen scraping software to make data more portable.

Levchin countered that the metadata associated with social network profiles can also lock users in. As Levchin sees it, the Internet is rapidly recentralizing around a few large players. "No one wants to collaborate," he said offhandedly. "Web 2.0 is a joke. It doesn't exist."

Wes Boyd, co-founder and president of, also said he was "really concerned about some of these closed communities" such as Facebook. Yet he allowed for the possibility that an alliance between consumers and companies might be able to prompt legislation that would give individuals and businesses some measure of data ownership.

Behlendorf echoed that sentiment, noting that enterprises want to own their data. "That's going to be an upper limit to," he said.

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