Social networking is losing direction, pioneer Bill Liao says

13 May 2010

Bill Liao, philanthropist and the co-founder of one of the first Web 2.0 companies in the Western World to go public, XING, says Facebook et al are motivated for the wrong reasons, focusing on subscriber numbers and not core values.

An Australian of Chinese descent, Liao, along with Lars Hinrichs, co-founded Open Business Club in Hamburg in 2003 as a platform for business professionals and renamed it XING in 2006. XING was one of the first Web 2.0 companies to go public and has grown to become one of the world’s leading business-to-business social networking portals.

Liao is noted for his philanthropic endeavours and is a driving force for a number of environmental and humanitarian causes including for planting 20m sq kilometre of new trees by 2010 and has volunteered for The Hunger Project in Uganda, New York and Mexico. A diplomatic passport holder, Liao refuses to fly and instead travels by train and ferry and is behind a global citizen initiative called The Declaration of Earth Citizenship because he believes nationalism is no longer relevant.

A keynote speaker at the upcoming Irish Internet Association Annual Congress which is taking place next Thursday, 20 May, Liao said he and Hinrichs’ motivation for XING was driven partly by the believe that Outlook didn’t go far enough to help people network.

A tipping point

“Malcolm Gladwell with his book The Tipping Point said that without people who are networkers and connectors and without people with good information, the world just wouldn’t function terribly well. Lars said one day that Outlook sucks. We thought about it. I’ve got all my friends on Outlook, I’ve got all my business contacts but what I really want to see is their friends, I want do know how big my second degree network is and my third degree network because that’s where real business gets done, not usually with the people you know but the people they know.

“When we sat down and looked at it there was no software that did that well, there was no software that allowed you to make introductions between people which was an efficient way of building social capital and so we set out to make a profitable company and 90 days after founding it we were cashflow positive. We knew we were on to something.”

Social networking is at a crossroads. Bebo, which was massive in 2005, is being dumped by AOL. Facebook is now at over 400 million users and is about to spawn a potentially powerful e-commerce ecosystem but is bedevilled by controversy about its philosophy on privacy.

Liao believes that today’s leading social networking giants are obsessed with subscriber numbers and care less about values. This, he warns, could be their Achilles heel. He also believes social networking sites are still too complicated for users to feel entirely comfortable and safe with.

“I think the idea that there are special users that you somehow own is going to be obsolete very quickly. If you look at the number of mobile phones on the planet and the sophistication of the mobile phones people have, the need to go to a specific website to get some of the stuff done, that whole interface is likely to become obsolete quickly.”

Game-changing technology

He describes the Apple iPad as a game-changing device that will finally make the world of technology and the internet much more accessible for the masses.

“If you grabbed hold of an iPad recently you would realise you could have a very good quality web interface with you wherever you are. That’s going to change the dynamics of things very quickily. There have been a lot of people who have tried to create mobile social networks; MIXI in Japan is the most successful. Frankly it’s not all there yet, it’s still inconvenient, you still have to figure it out. The next revolution in software is going to be software that figures us out rather than us trying to figure it out.

“The point is that the technology very quickly disappears and you’re left with the experience. Now social networking has a long way to go before the technology disappears and the user experience is all that’s left. Not only is it complicated, you don’t know if you’re being exploited, you don’t know whether you’re annoying your friends, how you make message acceptable to them, there’s no one to hold your hand and the problem is it’s just not easy enough.

“Look at FourSquare, it’s pretty easy to use – I’m not saying it is the future, but FourSquare and the iPad are all pointing at something. They are all pointing to a world where the computers figure us out rather than us figuring them out and no social networking software, not XING, not Facebook, not FourSquare, no social networking site has that figured out yet.

“They’re still going ‘I’ve got more users than you’ve got’; who cares? Is it a useful tool to me or not.”

Ease of use is vital and Liao points at the latest web phenomenon Textsfromlastnight where text messages being sent appear for all to see, sans, of course, who sent the message. “That’s the horrific edge of social networking but it’s very easy to use, you’ll laugh till you cry and you’ll be physically revolted but go and look at it. This is the zeitgeist, this is really what’s going on in the minds of the Americans and some English. It’s politically incorrect but it’s the truth, it’s real.

“That’s the technology being smart, that’s the technology allowing people to be really anonymous. I’m not saying it’s the be-all and end-all. We don’t know what we’re going to see but we know that it’s all going to change again and again because the technology is getting better and better. Whether Facebook is here next year is going to be a matter of whether they make their platform as useful as physically possible.”

Returning to the iPad, Liao believes the battle lines have been drawn between the open web and the closed web, but the device’s simplicity could carry the day.

“If you talk to computer geeks they’ll say they hate Apple because it is so restrictive, but they’ll still buy the product. So yeah, Apple could still take over this space, they control the apps, they control the platform. It’s not unimaginable. Apple has serious competition but I have to say using the competition’s devices and using Apple’s devices … the iPad has done something else unique – it has put the best possible user interface on the planet, and I say that without reservation, into the hands of someone with 500 bucks. It’s certainly a sea change.”

Global citizen

Liao came to live and work in Europe because he believes it’s a cultural melting pot. “It’s between Asia and the US and has a depth of culture and a whole lot of potential for innovation and I want to be part of that and I deliberately chose to come up and live here.”

I ask Liao about his philanthropic work and his motivation to right the wrongs caused by this and previous generations. His most recent project,, gives him immense pride. “I was doing research for the Copenhagen conference and my findings scared my eight-year-old daughter silly. She turned around to me and said: ‘Dad, you broke it, you fix it.’

“I thought that was remarkably insightful for an eight year-old. She pointed out that my generation broke the planet and we’d better fix it before she had to. If you look at there’s some great science on there. There’s a very simple answer to our dilemma and it’s called planting trees and so that’s what we dedicated ourselves to, planting 20 million square kilometres of trees by 2020.

“We need all the help we can get. There’s a three-minute video with voiceover by Stephen Fry, he very kindly dedicated that and was a great studio man and was a total professional.”

Liao believes Ireland needs to get to grips quickly with the opportunity to harness renewable energy and admits to being a fan of the Spirit of Ireland plan to generate affordable power using wind and water power. “The vision behind Ardnacrusha in 1928 was a brilliant move and it took bravery and clout to get it done then. I would say this kind of infrastructure is more important than any other kind of infrastructure.”

Liao is also the driving force behind, a philanthropic venture and social networking site where people can make a personal commitment for the future of the Earth. One of its endeavours is the Declaration of Earth Citizenship, which he says is very much joined at the hip with

“In order to achieve re-forestation people need to be empowered, in order to be empowered people need to be able to make declarations about what they’re doing. Go to and you’ll see its about personal empowerment. We really have to give up nationalism as the petty little game that it is. It’s stupid and is no longer serving people.”

Liao, once an avid air traveller, has given up flying to be a better global citizen and has shares in the Crombie Cork-Swansea ferry. “There’s not a cent of Government money in it, it is owned by a consortium of investors and has been packed out since the volcano. I gave up flying because it’s bad for the planet. I get around on train and boats.

“Ireland should bring back the old rail lines, it would make a huge difference to the country. Just as an aside there is a ferry that goes from Denmark to Hamburg and they put a train on the boat – it’s fantastic, just drive the train right on to the boat and take the boat across,” Liao concluded, dashing off to another meeting in London.

By John Kennedy

Photo: Bill Liao is a keynote speaker at the forthcoming IIA Congress on 20 May in Dublin. To learn more click here.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years