Social Reference Sites vs. Social Networks

Recently I was describing our business to an astute investor. As we talked about the business — the social network aspect in particular — it became clear how broadly this term is used when describing web-based businesses. Yet these businesses can be dramatically different.

In order to clarify our strategy, I coined a new term: “Social Reference Site.” I did some quick searching, and didn’t find this terminology in use. In fact, I didn’t find much discussion or good terminology for articulating the different ways in which websites are including social networks as a part of their product. In response, I’ll put forward the term “social reference site” and how it differentiates from more traditional social networks.

Social Reference Sites (SRS)

• Reference sites replace “content directories”
• High value for non-participants
• Majority of traffic from search engines is common
• Small clusters of users add significant value and have their own social interactions within the directory site

Social Networks (SN)

• Sites replace a communication vehicle
• Low value for non-participants
• Majority of traffic from direct navigation
• All users add value

The following table shows the distinction between them. Note that the “displaced product” category is a substantial simplification, but speaks to the core value proposition that drives most traffic. Also, these example sites are illustrative only.

I’m interested to hear others thoughts on this…