According to Kreye, Facebook represented a new breed of social networks – call it 2.0, which now all share basic functionalities: profile with user content, messenging and friends list.

Why is this new? As opposed to MySpace, Facebook and others are now social utility and social operating systems. An integrated application interface, launched last June, enables open-source applications to be installed – Facebook currently counts more than 10,000 apps.

In the past, MySpace and other platforms allowed users to extensively customize their page and layout – but this made it difficult to implement open-source apps, which require a Facebook-style, standardized format.

As a result, the number of Facebook users has already caught up with MySpace, despite the fact that it hasn’t launched in any other languages yet (illustration).

Nobody can deny the exponential popularity of social networking sites. The US social networking ad market is predicted to rise to $2 billion in 2008. Six out of the world’s 10 most popular websites are social communities in which users create content: YouTube, Myspace, Facebook, Wikipedia, Orku, Hi5.

Of the other four, two are search engines and two Web portals (Windows Live and Microsoft Network – the only two remnants of ‘traditional’ content sites).

But currently, the world’s leading social networks have created regional monopolies (illustration). Last year’s privacy scandals, when Facebook and others announced they would start targeting ads and even possibly sell user data to advertisers, illustrated the power of the platforms over users, who eventually decided to stay since. Facebook can also act as the gatekeeper of external content coming into the site, potentially dictating the price of, for example, newspaper widgets (see how iTunes has quickly gotten control over the price of music).

“This is where we come in,” said Kreye. “Commercial sites will always have an interest in selling your data.”

In Kaioo’s case, the venture is funded solely by donations. All ad money will be donated to charity organizations. gives users irrevocable right to form and decide of privacy rules on the site

“It’s such a beautiful idea because everybody wins,” said Kreye.

Kaioo now counts 30,000 users, not a bad start considering the snowball effect of social networks.

The site is currently available in German and English and is testing 8 different languages. The venture was funded by SonyBMG’s CEO Rolf Schmidt-Holtz.

Source: Thomas Kreye, founder of Kaioo