At Apple’s announcement fest Wednesday, among the launch of the new iPods and the $99 Apple TV box, was the announcement about Ping, a music-based social network that out-of-the-gate has more than 160 million users, all with credit cards. Of course, it’s only about music today, but there’s nothing to stop Apple Inc. (Nasdaq: AAPL) from expanding it if it suits its purposes down the road.
In many ways, this puts Apple ahead of Facebook (Nasdaq: FB), where some people spend money on games, but active spending on the site is not the norm. In fact, Facebook introduced a new gift card today at Target Stores, which allows people to buy Facebook credits or give them as gifts. I’m not sure enough Facebook users actually spend money regularly on the social network to make this worthwhile, but it's an attempt to get people used to spending. Most of Facebook’s revenue probably comes from advertising and selling information about its users to marketers.
Apple has a distinct advantage in that regard: a captive audience that shares information about music, movies, and TV shows; integrates what people like into the activity stream; builds custom bestseller lists from groups of friends; and gives users the opportunity to buy right in the activity stream. You can’t build a more powerful sales team than an individual’s group of friends.
What’s more, Apple has gotten the artists involved. In his demo, Steve Jobs showed pictures that Jack Johnson had displayed from his latest tour and an exclusive video Lady Gaga made for her fans. This kind of direct access to artists is more powerful than Facebook Fan pages.
And it sounds as if Apple took care to make privacy a priority; you control who you friend and who has access to your information. Apple is even providing the ability to create a closed circle of friends if you wish, where only a small group of people share their information about their music. (Although my jury is still out on the privacy controls until I see the product.)
But Ping doesn’t integrate yet with Facebook, something that may irritate users who want to do more than share on a closed network.
Further, some people clearly weren't excited by the Ping announcement, and it could be that there is some kind of social network fatigue developing. How many can we pay attention to at one time?
In an earlier blog post this week, I speculated whether a small startup like Diaspora, beginning from scratch, could ever hope to dethrone Facebook and its 500 million users. It’s a fair question; but one thing Ping has going for it from Day 1 is a seeded active community with more than 160 million users, most of whom are used to using iTunes to spend money.
Still, Ping suffers from being locked inside iTunes, although Apple was smart enough to create an access application and put it in the App Store for iPad, iPod Touch, and iPhone users.
Ping may not be a direct threat to Facebook yet, but with its built-in user base and natural way for people to connect and spend money based on friends’ recommendations, Apple may be onto something here. If Ping catches on, it would be wise for Apple to move it to the open Web where it could grow and develop outside of the iTunes and App Store ecosystems.
Facebook might not have to concern itself with today's announcement just yet, but given Apple's cash, marketing clout, and a very loyal user base, perhaps it should at least pay attention.
— Ron Miller is a freelance technology journalist, blogger, FierceContentManagement editor, and contributing editor at EContent magazine.