The CEO of Facebook (pictured below) says it will take 5 to 15 years to figure out how to monetize social networking applications. He says his focus is on growth, not revenue. (See also this report suggesting Facebook has a growing cash problem, despite getting hundreds of millions of dollars in investments.)

In the meantime, Facebook and its poorly- or non-monetized brethren (YouTube, Twitter, et al) continue to break new ground by influencing how people behave and spend their time. In fact, our own consultants and venture capitalists urged us to utilize social networking when we rolled out our SaaS application last year.

So, I opened a Facebook account and we produced a few cute YouTube videos. Voila! We generated over 10,000 eXpresso users over the past year. With each paying $79, that would be a very nice return! Trouble is, these users weren’t used to paying anything for Web applications and most opted for our “free” version.

What has to be frustrating for the social networking companies is that their users don’t believe they should pay for their services.

Fortunately for us, there is a marked distinction between social networking sites and SaaS (software-as-a-service) business applications. I think a lot of industry pundits and investors are beginning to understand that although social and business applications both play in the “Cloud”, their respective users play – and pay — differently.

But there’s a silver lining. Any complaint about social applications “training” millions of users that their online experience must be “free” is offset by having a generation of people now comfortable with, and trusting of, online applications. That, combined with the legitimization of the SaaS business space by pioneers like Salesforce.com, sets the stage for a computing sea change that will dwarf the social networking phenomenon.

The next generation of business applications will be based – and used – in the Cloud. They won’t be free, but they’ll be cheaper, quicker, and more functional than what anyone could have imagined just a few years ago. We’re going to be real-time witnesses to history. The speed of adoption will be faster than any other business landscape change we’ve seen since the introduction of the abacus.

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About the Author: George Langan is the CEO of eXpresso Corporation, a collaborative software service. George brings to the table extensive experience running software businesses. His blog can be found at: http://blog.expressocorp.com.

From Small Business Trends

Social Media Sites Making Money? Are You Kidding?

Don’t let industry terms like “Cloud platforms” and SaaS confuse you, however. All this means is that people are using software applications that are Web-based, to work together.

The purpose of these collaborative software systems is to mimic the work environment that we had since the first organized office.

Think about the work environment people have been using since the organized office became commonplace. We see it best in old movies now (or in episodes of Mad Men) — each department on a different floor, rows of secretaries sitting at IBM Selectric typewriters, junior executives in cubicles, seniors in offices.

In my earlier days at AT&T, we were constantly rearranging people so that all members of national account teams sat next to each other. We even hung team signs from the ceiling. Meetings were held at a moment’s notice, and to share a document, I just plopped a file folder on a colleague’s desk.

Today the work environment has changed dramatically. More people work remotely from home. We have virtual teams, more consultants and outsourced staffing. Rising gas prices and economic situations will make the virtual office even more of a necessity.

Everyone has a different description of the virtual office. I have been running virtual companies since the 1980s. I remember being thrilled to have an MCI email account and realized that I didn’t have to deal with voice mail to communicate with people.

Since then I’ve had a lot of experience with what works and what doesn’t. Let me share the requirements that I think software applications should have to help people work together in today’s “virtual office”:

Simplicity and Familiarity

People naturally resist (some say hate) change. A software application’s interface has to resemble what people are very familiar with. It must also be as intuitive as possible.

This may sound basic, but if you look at the players in the collaboration space right now, only a few have done this very well. Some software applications are so functionally-foreign and difficult to use that you quickly give up after a few tries at figuring out just the basics. To cross the chasm and become dominant in the market, the user experience has to be familiar and simple.

Presence / Chat

I feel that “presence” and the ability to communicate immediately and directly is the most important aspect. Knowing the status of everyone you are working with is the cornerstone of a successful system.

In the older conventional office model we could glance across the room or lean over the cubicle wall to chat about the weather or a new product release. The alternative today is instant chat or phone conferencing. Services like VOIP or free conference call services have made ad hoc conferences fast and easy to set up.

File Control/ Sharing and Real-time Collaboration

At the heart of business are documents and files. They are both a work product and a work process. With the exponential increase in consultants, outsourcing, and partner communities, the ability to apply meaningful levels of document authority is one of today’s crucial imperatives.

In the old days you could control this by photocopying only certain pages for certain recipients, or you would limit the distribution list. Today, in a good collaborative software application you can assign different levels of authority with a few keystrokes.

Add a detailed audit trail for security, control, convenience and forensics and you have the ingredients of a viable document and file management system. Real-time collaboration and push technology automates most of these management tasks. In combination, these management tools make obsolete – and eliminate – the need for email attachments.

Early on I mentioned people’s resistance to change. There are many potentially-powerful solutions on the market for document control, file backup and collaboration. The challenge they all face is (1) being easy to use and (2) minimizing the need for change in behavior. For mass adoption, you must mimic the way people work today and automate as many functions as possible — not try to radically alter their work patterns.

Conferencing

Conferencing is a broad category — I tend to think about it in buckets.

• Show and tell events are scheduled sessions that have a designated presenter and a group audience. There are a number of products on the market now that handle this very well with different pricing models and levels of feature/functionality, for instance Webex.

• I believe that ad hoc sharing is one of the most usable features in the collaboration world. The ability to instantly share a screen or work product with no setup is as close as we’ll get to “leaning over the cubical wall.” There are two ways to do this: (1) products that allow for instant screen sharing (usually on a one-to-one basis), or (2) products that provide real-time document sharing and updating among multiple users. I use both extensively and find them invaluable in the “Virtual Office”

Change

Every generation entering the workplace brings different skill sets and biases. The first real software company I worked for had a home-grown mainframe email system. The CFO would have his administrative assistant print hard copies of his emails. He would hand write the responses, and she had to be the one to key in his message and send the reply email.

As ridiculous as that sounds now, in a decade or so, the idea that we kept software applications and files on our local PC will sound just as ludicrous.

In the meantime we need a hybrid solution to accommodate our work habits. Accelerate the use of the cloud for applications and data, but give people the option of working from their desktops.

By making online work easier and more convenient, the traditional desktop will become as functional as your tonsils — still there but not needed.

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About the Author: George Langan is the CEO of eXpresso Corporation, a collaborative software service. George brings to the table extensive experience running software businesses. His blog can be found at: http://blog.expressocorp.com.

From Small Business Trends

Software for the Virtual Office: Mimicking the Physical Office