After recently rejecting Facebook’s $500 million buyout proposal, micro-blogging phenomenon, Twitter has moved forth acquiring and hiring former O’Reilly CTO Rael Dornfest. This adds fuel to the debate on whether Facebook and Twitter are rivals competing for the same online attention, or if they are instead, two totally independent online communication / information outlets. These are two very interesting platforms, no doubt, with large and promising futures ahead.

It’s very interesting to analyze these two successful (not always measured in dollars and cents, mind you) businesses, and how very different they are. Most notably are their different approaches to openness and complexity. Facebook has operated, so far, in a complete “bubble,” remaining fairly separate from the rest of the web. I believe that this community that Facebook was able to build on the internet is one of the biggest draws, especially at its inception regarding the college campuses that it was penetrating – it served as a virtual campus, sheltered from the “real world,” or the web, in this case. Now, compare this to Twitter. Twitter embraces the web and everything it has to offer, and operates with virtually no boundaries. This coincidentally, has been one of Twitter’s greatest factors to adoption; its openness.

Facebook boasts a very complete, complex profile system chock full of applications, photos, videos, albums, messages, status updates, news feeds, you name it…chances are Facebook has it. The brilliant execution of all these features has made Facebook the top social network to date. As we take a look at Twitter, they retain a completely different mentality, taking the less is more approach and focus on simplicity. And it is this structure that has contributed to Twitter’s success.

It’s very interesting to see how two platforms such as Facebook and Twitter can both be so successful and yet operate so differently. Now, obviously, Facebook is far larger than Twitter, so a true comparison of the companies may be a bit premature for Twitter’s-sake, but it is definitely worth keeping an eye on…and Facebook clearly has. One look at Facebook’s ‘Status Update’ feature and its introduction just shortly after Twitter started to develop a following is testament to the very simple, yet effective platform that Twitter has developed. Which brings me to my final point: What Twitter has that Facebook Doesn’t…

And the answer, is quite simple : Twitter has the ability to connect an individual with anyone, anywhere, at anytime. The same cannot be said for Facebook, or most traditional social networks for that matter. Twitter has removed the need to “Add Friends” and effectively connects individuals regardless of specific networks or communities. To give a very small example of what I mean, Google Analytics reports 8% of my Facebook “Friends” have visited my blog off of a facebook.com referral. Now that number jumps to just shy of 60% when comparing visits off of a twitter.com referral. The point is, Twitter is designed to communicate, network, discuss, and share content on a much more individual level. The stripped-down, bare bones service helps Twitter break the boundaries often created with complex networks.

I think the most interesting thing is that both of these services can coexist without necessarily infringing upon each other (for now at least). It would be hard to find someone without a Facebook account that is on Twitter, and rightfully so. Facebook is an absolutely ridiculous social network that will continue to grow and dominate mainstream. With that said, I can see Twitter accounts being distributed as commonly as email addresses are today — something that Facebook accounts just don’t have the flexibility in executing.

It is no secret that the shift from traditional media (newspapers, television, radio) to the online social scene (blogs, tweets, social networks) is upon us.  It is also no secret that the employers and employees of traditional media have been late to adopt the new media wave.  I personally cannot relate to these individuals, but I can sympathize with their plight.  I mean, really, who wants to hear that some “kid” in their basement is getting more attention than a news journalist who graduated with a degree in journalism and has over 15 years experience in the business?  That is certainly a hard pill to swallow.  Of course, as all of us know…it rarely is just some “kid” in a basement; instead it’s typically a 20-something year-old in an affordable apartment building who has been blogging passionately and truthfully about a particular subject for quite some time.  This is what large, traditional media corporations fail to understand.

The Silicon Alley Insider recently featured a post about Jeff Jarvis and his claim that “journalists are in fact responsible for the death of print.”  A very strong claim from Jarvis that was met with some understanding criticism amongst some traditional journalists.  Jarvis makes bold but accurate statements urging journalists to take responsibility for the fate of journalism.  Instead of merely gloating over the demise of print, he speaks at conferences, sits down with newspaper companies, and empowers the journalism community to innovate and make change.  Jarvis clearly understands that the future of news media is changing rapidly, and in an industry of slow-movers, he exemplifies someone who actually “gets it”.

Of course, the new wave of social media affects more than just newspapers and its journalists; it extends to, and challenges the television and radio platforms as well.  Gary Vaynerchuk posted a brilliant video (see below) reacting to radio superstar Howard Stern’s thoughts on social media.  Gary Vaynerchuk is another prime example of someone who simply “gets it”.  He has successfully utilized the power of social media to build a very strong personal brand, and encourages us all to do the same.  (FYI: I have yet to see a Gary Vaynerchuk video that I didn’t like and that wasn’t 100% honest and inspiring)

“Old school” traditional media professionals feel that social media has devalued the overall quality of news.  They want to believe that they are the only people qualified to deliver news and information to the masses.  What they fail to understand is that “kid” in his basement spends more time talking, writing, and reading about a specific blog topic more so than most “professional” journalists.  That “kid” did not develop a loyal following of readers by accident.

The barriers of entry are low, maybe even non-existent when it comes to social media.  Despite this fact, readers are more discerning than ever, and expect a lot more than they ever have before.  The new wave of social media has finally brought transparency to the world of information.  The large corporations who refuse to acknowledge this fact are in for a rude awakening.

Myspace has announced that they are on course to achieve $1B in revenue this year. This comes at a time where chief competitor, Facebook has surpassed Myspace in overall web traffic, but is looking at numbers far lower than $1B. In fact, Facebook’s CEO, Mark Zuckerberg has admitted the fact that “cashing in” on social networks is still somewhat of a mystery.

Despite this, Zuckerberg is confident that they will be able to figure it out in the near future. Zuckerberg states, “I don’t think social networks can be monetized in the same way that search did. But I’m pretty sure that we will find an analogous business model. In three years from now we have to figure out what the optimum model is. But that is not our primary focus today.”

I don’t think social networks can be monetized in the same way that search did. But I’m pretty sure that we will find an analogous business model. In three years from now we have to figure out what the optimum model is. But that is not our primary focus today.

So who’s the winner of this social network race? Is it Myspace for being the most profitable social network; or do you give it to Facebook for securing the #1 spot in terms of worldwide web traffic?

While both companies seem to have differing strategies and goals, it is Facebook that will ultimately prosper by capturing the attention and loyalty of users around the globe. In terms of social networks, (connecting with friends, family, and peers) Facebook is unrivaled. Facebook acknowledges this and continues to focus on their core competency, connecting individuals…not necessarily profiting off of it just yet.

Social networks, especially monetizing them, is really unchartered territory. One of, if not the most important factor in a successful social network is (you guessed it!) the size of the network. If Facebook is able to become the largest and most powerful social network (and it looks like it’s heading there), this so-called “network effect” will automatically put them in a position to succeed. Let us not forget, it took Larry and Sergey a few years until they saw Google turning a profit.