A viral Internet service is one where each new user must involve friends to derive personal value from the service. This is best exhibited by communication and hyper-social services.
He gives Skype and Xfire (an IM service for gamers) as examples. To get value out of either of those services the user must ensure that their friends have also downloaded the client. Not just been told about the service, but actually downloaded the client.
As Nisan also points out:
the majority of consumer Internet sites don’t lend themselves to viral distribution ….. the user does not need to tell friends about the service to derive their own personal value from it ….. This is the same problem that I believe many new vertical search engines suffer from.
His solution for services that aren’t inherently viral is to leverage natural search. Build up the inbound links so you rank highly in the organic listings and then you will hopefully get into a virtuous circle of good postion, more traffic, more links, better position etc. Wikipedia is perhaps the best example of this in operation, although Digg did it much more quickly.
These are all very wise words. The definition of viral is particularly helpful – it is a term that is much overused in business plans (almost as much as “social networking features”).
In a vain effort to add some value to Nisan’s thoughts I would add that the notion of marketing a service to critical mass is also important.
With social networks that has meant finding creative ways to have enough users on the site that the experience is meaningful for new arrivals. I have heard rumours that MySpace paid ‘nice looking ladies’ tens of thousands of dollars to bring their thousands of online friends to their site in the early days. Similarly as I have reported before WAYN used CPA advertising to get the initial critical mass of members and Bebo leveraged its common heritage with BirthdayAlarm to similar effect.
Distribution partners are also an important part of the mix – Indeed Nisan himself has written before about the importance of distribution partners for MySpace and Skype.