There are numerous companies trying to understand how the growth of social networking through web and mobile channels can be monetised. The evidence of consumer enthusiasm for these services can be found in successful and oft-cited ventures such as MySpace and Facebook, which have attracted many millions of users in a relatively short space of time. There are also examples of communities which have grown entirely in the mobile environment, such as AirG, which claims 7.5m users worldwide through the ‘white label’ platform it provides in partnership with network operator customers.

Users seem to split into two broad groups – those who want to use the service to facilitate interaction with an existing community of ‘off-line’ friends and those who see it as an opportunity to meet a new circle of virtual acquaintances. Obviously there is a degree of overlap between the two, but the latter group often has the greatest loyalty to the service and activity rate. Since they have met their new friends through the service, they rely on it as their primary means of communication with this group and remain long-term users.

It is interesting to look at the motivation of this group. Does social networking online represent a supplement or a replacement for ‘off-line’ friends? Is it driven, ultimately, by the desire to meet these people face-to-face or does the virtual nature of the exercise appeal because it is novel?

Most likely it differs from user to user and from service to service. Those interested in dating for instance, will always be motivated by a long-term desire to be able to meet the people they are corresponding with. In contrast, those who share an interest – such as an online gaming community – may be content for their relationships to exist within the confines of the gaming environment.

I had an interesting discussion today with Dan Ake, CEO of Mobile Signal. The Silicon Valley-based company started life as a provider of artificial intelligence software for internet banking, but now it is applying its AI expertise to launch a social networking service. Mobile Signal combines elements of both the virtual community and the opportunity to connect, in person, with those who share a physical location.

Initially the company’s strategy is focused on partnering with companies which have links to existing communities. For instance, one of its first clients its TGV, the French train operator. Customers who book a journey on the TGV are invited to visit a web-site where they can register their Mobile Signal profile – e.g. interests, line of business etc… They can then see a list of other passengers on the same train and suggestions of who might interested to meet them. If a user wants to connect with a fellow passenger, profiles can be exchanged anonymously, and if both parties accept, Mobile Signal initiates the contact between them.

The mobile element enables this to take place in the venue itself – as well as trains, Mobile Signal is working with cafes, conference venues, airlines and many others. The user simply sends a text to the Mobile Signal short code and receives back a message listing people who match their profile and happen to be in the same location. The interface is driven entirely by text messaging, meaning it is accessible from any handset. Ake says they are also experimenting with Java-based and other client applications.

If a user connects with someone they’d like to meet, Mobile Signal enables them to send their numbers to each other so they can actually connect in person.

Profiles can be used across different venues, so there is no need to re-register with Mobile Signal to participate in networking at a cafe if you have already done so on the train. It also supports the ability of users to exist in different ‘universes’, so in some venues they will show a business profile and, in others, a personal profile.

The background to Mobile Signal is interesting. Ake talks about the company placing as much importance on sociological aspects as on the technology platform. Indeed, in developing the technology, Mobile Signal worked with the sociology unit at the University of the Sorbonne to enhance the user experience.

The text interface is surprisingly usable. Mobile Signal places code letters in square brackets – e.g. [ A ] – so users can often respond to requests using a single character. All of the complexity and artificial intelligence elements reside on the server.

Mobile Signal’s business model is based on fees from its partner companies, such as TGV, and premium fees from each text message generated. It doesn’t require any integration with the operator’s network and there is very little upfront investment for its community partners. Ake has built the service in such a way that there are very few of the traditional barriers to entry when trying to launch wide-scale mobile social networking: no technology investment, no systems integration, no client to deploy, no operator contracts to negotiate. Partners can be up-and-running in a matter of weeks.

In doing so it has necessarily sacrificied some of the richness found in other social networking services. There is no way of exchanging pictures, no mapping features and no graphical interface.

This brings us back to the earlier question about what drives usage of these services? Is the desire to connect and the ability to meet people with similar interests enough incentive to give the content a high perceived value, even if it is delivered in plain text format?

Mobile Signal launches commercially in Paris next week, with a UK rollout scheduled within two months.

We’ll be exploring many of these issues in a panel session entitled ‘Community convergence‘ at the MEX conference on 31st May and 1st June. If you are working in this area, I’d urge you to attend and take part in the debate. You may also find my previous article of the same title an interesting read.