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Social networks to replace imagination and be woven into clothes

Or maybe just pump more ads

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It’s official: There’s big money to be made selling virtual window dressing on the internet.

Yesterday, at the Stanford Summit, an annual tech industry love fest, the dreadlocked virtual worlds guru Jaron Lanier told Silicon Valley that "in 25 years, we will all get rich buying and selling virtual goods", and today, the idea was seconded by Wallop CEO Karl Jacob, one of six "social-networking" types who addressed conference attendees this afternoon.

When asked how social networks would make their money over the next decade, Jacob said: "We believe there's a world five years down the road - three years down the road - where the most common thing you do on a social network is buy the things you want to dress up your profile with and the applications you need in order to do that.”

He wants people to know that they don't need imagination to have personality. "Self-expression is a very powerful concept," he explained. "We want to take people away from the idea that they have to do it themselves and that they can buy forms of self-expression in the virtual world."

This virtual goods market, he went on to say, is analogous to the cell phone ring-tones market.

Fellow speaker Gina Bianchini, CEO of Ning, wasn’t so sure: "I think that if I had to choose between the targeted advertising market and the ring-tone market, I’d choose targeted advertising."

Most of Jacob’s fellow speakers - including MySpace senior vice president Chris Wolfe and Facebook co-founder Dustin Moskovitz - believe that good ol' web advertising will drive social networking into the next decade, as the let-the-web-drive-your-social-life "technology" migrates onto handheld mobile devices and spreads across the globe.

"With MySpace, we're transforming the company into a global network. We're now live in 18 countries, and we're launching in a new country every three months," Katz said. "Mobile is the other huge initiative, so that you can access these networks wherever you go - from your pocket."

But Jacob refused to fall in line. At one point, he also said that social networks will soon extend well beyond mobile devices into, well, everything. "If in ten years we're still talking about social networking profiles, something went radically wrong," he said. "Ten years out...I think social networking will be woven into pretty much every product and every thing we touch. It will be part of both our online lives and our real-world lives."

Somehow, this reminds us of Linden Labs CEO Philip Rosedale telling conference attendees that in ten years, the popularity of virtual worlds like his own Second Life will exceed the popularity of the Web itself.

Jacobs envisions a world where the stuff now stored on sites like MySpace and Facebook is part of the clothes we pull on each morning. "We can wear [social networking databases]," he said. "We've got all this clothing with computers and networks and stuff."

Shock - a company called nTag interactive is already going after this market, offering wearable electronic name tags that let you easily trade personal information with people you meet at business cocktail parties.

Does that mean social networking will reinvent business in much the same way IBM and Sun believe virtual worlds will? The odds aren’t good. MySpace’s Katz admits, "Knowing how addictive this stuff, I can imagine the whole thing [social networking for business] going horribly wrong and nobody getting anything done."

The most important message of the afternoon: Social-networking companies don’t like to be called social-networking companies. Says Moskovitz, "We define Facebook as a directory that provides social utility."

So there you have it.®

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