Social Networks and ADD

• People only have so much time - Web 2.0 businesses are truly a zero-sum game. Your competition isn't "do nothing", as most wired people already spend a lot of time on the net (or are heading that way). The net itself, in all it's glory, will suck up people's time. You're going to be fighting for little blocks of time up against MySpace, Twitter, and everybody else. That means addictive content rules over plain content. Call it viral, engaging, whatever, but web sites are becoming more like video games and less like newspapers or diaries.Facebook = video game where you see what your friends are doing. Digg = video game where you see what the mob likes. MMORPGs = video games where, well, it's a video game.
• Social Networks are a game, not a content recommendation machine - People do not participate in social network sites the way the founders anticipate. For instance, any sort of peer-approval system has people making alliances and rating each other's articles up. Over time, cliques of folks rule the content, and it's not much more than a mob-rules situation (as pointed out by CmdrTaco). It's a well-known fact that a small number of Digg users determine the success or failure of articles on the site, even though tens of thousands read it. The rest of us are stuck consuming the dregs. People will by nature game the system. Reddit content going downhill? NewsYC not what it used to be? Well it's not surprising, is it?
• If everybody's doing the same thing, you're going to be "fighting down the tail" and not ruling the world - Ever wonder how many digg-like sites there were? Or sites like FB? Or sites like Second Life? While these are some of the name brands, there are literally dozens and hundreds of look-alike sites either already out or coming down the pike. "Let's do a social networking site for people who like chicken wrestling!" somebody might say, and a couple of days later, there it is. As the song says, everybody wants to rule the world, but it's getting lean out there. If you're playing the same game as everybody else, you've got company. I'm not trying to be negative: I think you can work the system quite well "down the tail" and in the areas the big kids aren't playing. But dreams of ruling web content are not necessarily compatible with chicken-wrestling social networks.
• Simple questions lead to simple answers (and not the ones you were looking for) - If you're going to ask people to vote up or down on particular content, you're not going to get whether that content will be liked by any particular reader. The technology is evolving on this. Some sites like Reddit have a recommendation engine that works aside from user rankings. But at the end of the day, the quality of your input is related to the quality of the output. If all you have is textual and keyword analysis and yes/no, then all you're going to get is whether folks mostly like something with those keywords. This is better than Digg, sure, but we can do a lot better. Write if you'd like to talk.
• Content is king - People come to your site for one thing. Do it well. Viral sites spread the word by combining that one thing with a more immersive experience. When your friend catches a YouTube video and mails you the link, you're only going to YouTube to watch what your friend watched. But later on, after going to YouTube for one thing many, many times, you poke around the site and start subscribing to channels (or not). Find one thing that you can do that is uniquely valuable to users and do it in a way that stands above the competition.
• Networking and partnerships matter - Whatever you're doing, find some other people or companies that will help you out. Building that site about how to juggle puppies? Well hook up with the circus, or the SPCA, or kennels. They probably already have lots of material for what kinds of puppies are best to juggle, what kinds of animal rights laws you may be violating, and how many puppies you can keep in the air at the same time. Of course I'm joking with the topic, but there are a lot of non-technology companies that are looking for partnerships. How well you integrate into both the technical world (through the use of things like OpenID, RSS, XHTML, etc) and the non-technical world (strategic partnerships) will get you "plugged in" to the rest of the ecosystem. And as Martha Stewart would say, that's a good thing.
• If it's entertainment, people have a short attention span - If your site is built around amusing people, then sooner or later they're going to find new ways to be amused. This is so obvious as to be pedantic, but it seems a LOT of folks have missed the lesson. If web sites are becoming more like video games, then they will have limited shelf lives. The _genre_ may continue on, but like all other games there will be new players, new spins, new fads.

I don't think there is a bubble at all. I think that web apps are becoming more commoditized than they ever were before. That means it's a great time to get into the business, especially for the little guys. I worry a lot about the "rule the world" guys, simply because that's not the way the web looks to be shaping up to me. Even Google isn't Google any more.