What’s Next for Social Russia?

As Facebook is far from the main Russian social network, the industry is highly competitive and global players are tempted to dive in the fight.

Social media Odnoklassniki is competing with leader of the market Vkontakte, his CEO Ilya Shirokov now claims that the gap in users is less than 5%, from 50% a few years ago. With the increasing Internet penetration in the region, “the Russian-speaking market for social medai will double in the next few year” according to him, providing his company, and others, with a lot of opportunities

There’s an increasing proximity betwen different social media, but beware of negative reactions from users: “we were pushed back by users when we tried automatic content cross uploading to Odnoklassniki & MM” admitted Shirokov. Users had two social media profiles for two separate circles that did not overlap.

From left to right: Ilya Shirokov (CEO of Odnoklassniki), Gene Sokolov  Head of Badoo Russia and moderator Jamillah Knowles (UK Editor, The Next Web)

Global player Badoo is making a push at the moment to get in the Russian market. This social network, whose specifity is to find new contacts instead of connecting existing ones, but has also been used for dating, now claims a growth of several thousands new members per day in the country.

Both panelists agreed that mobile phone has a much higher penetration potential for the developing world and both websites tried e-commerce, another hope for revenues in social media. Badoo even created its own payment plugin and both accepts many means of payment, like SMS.

Ilya Shirokov (CEO of Odnoklassniki)

For Shirokov, the future remains “hard to predict. Blogs were thought to be the end of the story, then social media arrived and they changed. Social changed everything, sharing photos, games, the trend continues with music and video”.

Curation, that is having your social networks do tailored recommendation to its users based on the infos they have on them, is a aspect Odnoklassniki is going to develop in the immediate future, announced its CEO. Immediatly, Sokolov interjected that curation has to be done right and that he never saw one good example online.

For him, the future of social media is threefold: “local, instant and connected to the real world.”

Google Vice-President on Digital Business’ Future

The boundary between digital business and traditional business is vanishing, claimed Nikesh Arora, a vice president of Google. By saying that, Arora meant that the impact of digital revolution has been so penetrating that the technology industry can no longer be separated from other business.

Nikesh Arora is on DLD’s stage to talk about the future of the digital business. “2012 is a new start that moves us from information era to people era.” Arora started, “We have already created a lot of information and services, it is time to make sense of them”.  New digital devices have quickly emerged and most digital services are going onto clouds, it is therefore getting ever more urgent to converge services that can work on different devices. That’s what Arora sees the key to the future success in the digital business.

“The fundamentals of production and innovation have not been changed, but the way contents reaches the end-users are going to be rewritten for the entire business.” Nikesh Arora takes the news industry for an example. “I still read news, but I only read newspapers on the airplanes”, it is the way he engage with news contents has been changes. In another word, companies need to re-think distribution of their service and products and at the same time make them compactable on multiple devices. “It is difficult to create a perfect convergence experience.” admitted Arora.

“The good news is that the last set of innovation always provides a platform for the next set of innovation. ” Nikesh Arora said. He referred to Google, saying that the company would have not existed if the internet infrastructure had not been established and the amount of information was not large enough that required a service like Google.  

We are now seeing more and more people using portable devices, we started to understand the social relation between people online, more and more services are moving to the cloud. Nikesh Arora said under these circumstances, we now need to think about the key question — “What the current world allows us to innovate in the future?”

The Big Question: What Next?

It was always going to be a weighty session. With a title like “The Big Picture” and panelists such as Greg Greeley, Dmitry Grishin, Paul-Bernhard Kallen, Arkady Volozh and Niklas Zennström, it could have been little else. 

Arkady Volozh started by reminding the packed hall of ancient history: those bad old days when we all got online with dial-up modems and the internet was little more than a collection of pages nobody quite knew what to do with. That was then. Now, somewhere in the vicinity of 1000 tech professionals fill a packed hall in Munich eager to hear what’s next — and how to make money from it.

The answer, he said, is emerging markets. China has more than 500 million internet users. By 2014, India will have 300 million. Mr Volozh, whose search engine Yandex is the market leader in Russia, has a simple plan to take advantage of these numbers. “We’ve noticed that the leader [in search] generally has a share of 60%. The main competitor has a share of 30% and everybody else shares the last 10%. If we can be number two in several countries, that is a good model for us.” Yandex is already competing in Turkey. 

His fellow Russian Dmitry Grishin sees education and knowledge as the next big drivers of innovation. “Cool things are already happening. You can get Stanford courses, MIT courses online,” he said. This is only the beginning. People are going to gamify education, he said. That’s when we will see real change. 

Greg Greeley of Amazon said growth and innovation can, at the present moment, be taken as a given. “There is a strong tailwind helping us,” he said. “And Moore’s law is still applying.” Yet, he foresees problems. “There are headwinds too. Europe’s regulatory environment is one of them,” he said referring to Viviane Reding’s keynote speech at the start of the conference. Paul-Bernhard Kallen said he approved of the regulation in general although it had problematic aspects. 

The biggest question mark about the future, however, was about jobs. David Kirkpatrick, moderating the session, suggested that productivity may be growing but jobs are not. A story in the New York Times this morning highlighted that. ”Retailers should get ready,” said Mr Volozh. “The last ten years will be nothing when compared to what is going to happen in the next five years.”

Mr Greeley described it as a “disruption”. But so was the industrial revolution. As mechanised factories reduced the demand for workers, people retrained for a new economy and better paid jobs. Perhaps the same thing is happening now. “It may take some time. It may even be generational shift,” he said. But it is bound to happen.

That should serve as advance warning. Remember folks, you read it here first.