NET WORLD ROVER: Year in Review 2007 from CNET News.com:"Social networking gets its geek on"

By Caroline McCarthy
Staff Writer, CNET News.com
Published: December 27, 2007, 4:00 AM PST

For most of 2007, buzz in the social-networking world could be summed up in two syllables: Facebook.

At the beginning of the year, MySpace.com was on top of the social-networking heap. And as 2007 draws to a close, the News Corp.-owned site is still far ahead in page views and user accounts. It continues to expand into both new language markets and original media content like the Web series Quarterlife, and it has earned critical acclaim for the interactive "presidential dialogues" that it organized in conjunction with MTV. Parent company Fox Interactive Media has also expanded its social-media offerings, acquiring image-sharing site Photobucket and widget start-up Flektor.

New social-networking start-ups also flooded the Web (MC Hammer, anyone?) and big names like Yahoo and Viacom made plays in the field, as well (Mash and Flux, respectively).

But this was the year that Facebook caught fire, and even a court battle over the site's true origins couldn't stop its momentum for much of 2007.

The real game changer came on May 24, when 23-year-old Facebook CEO Mark Zuckerberg announced that the site was releasing code that would let third-party developers create applications to run within the service. Experts considered the Facebook Platform launch a milestone in the evolution of social networks, and developers saw it as their ticket to success. Start-ups devoted entirely to embeddable social-network widgets, like Slide and RockYou, became some of Silicon Valley's hottest new companies.

Soon after, other social networks decided to follow suit. MySpace, LinkedIn, Bebo, and others all announced that they would be opening their services to developer applications, too. Google, meanwhile, had its own plan: the search giant unveiled OpenSocial, a standard that any social network could use for a developer platform. With just about every major social media player onboard except Facebook, OpenSocial was the only real threat to the Facebook platform that emerged in 2007.

The hype culminated when Microsoft confirmed that it would invest $240 million in Facebook, putting the social network's estimated value at a jaw-dropping $15 billion. But things started to unwind when several activist groups, including MoveOn.org, alleged that Facebook was violating user privacy through its new Beacon advertisements, which shared information about users' activity on retail partners' sites with their Facebook friends. In the wake of the accusations, Facebook apologized and added more privacy controls, much as it had done a year earlier when users protested the debut of the "news feed."

Smaller social networks also made headlines. The much-talked-about Digg remained a hot topic. Acquisition rumors floated around late in the year, and in the spring, some ugly legal action almost unfolded when the site refused to obey a Digital Millennium Copyright Act (DMCA) takedown notice. Twitter, a start-up devoted to "microblogs" where no entry is longer than 140 characters, took off at the South by Southwest Interactive Festival in March. Meanwhile, its chief rival Jaiku was snapped up by Google.

Some of the year's other social-media acquisitions included music-based network Last.fm, purchased by CBS Interactive; kids' site Club Penguin, acquired by Disney; StumbleUpon, which eBay bought; and Clipmarks, acquired by Forbes Media.

Not surprisingly, privacy and safety issues remained on the horizon. Both Facebook and MySpace grappled with demands from state attorneys general who were concerned that young people could be exposing themselves to online threats through social networks. Their efforts didn't do much to stall either site, but served as a continual reminder that even though Silicon Valley might tout a company as the future of communication, legal authorities might beg to differ.