The rise of Facebook has cast a large spotlight on social functionality in the last few years. Social graph and Feed are becoming relatively common parlance, at least in the Valley, and increasingly there's a feeling that everything has to be social or that everything is inherently social. I share the excitement but not the conclusion. My cofounders and I started aardvark, despite great jobs at Google and elsewhere, because new APIs to social networks suddenly allowed us to create functionality we'd always dreamed of. I think Social is a sea change. But, I see Social as only one of three complimentary axes of value along which you can satisfy users. The other two axes are Identity and Personalization. Social may be an evolution of identity and personalization. But, your product or service might be well served by devoting resources along either of the other axes at the cost of underemphasizing Social.
I'm a geek, so my mind generally goes to the data that is an input or output from my experiences on the web. In that context, a service delivers value around Identity when I can see data that pertains to me (think MyWare). When Identity comes into play, I have a different experience because I see something different than another user. Many services don't have to deliver any value along Identity; when I read a paperback, I enjoy the exact same experience as anyone else doing the same. Other services don't make any sense outside the context of Identity; my bank primarily delivers value to me by letting me have an account that has "my money" not "your money" in it; I would get no use out of receiving an anonymous or typical bank statement every month.
Personalization happens when a service sees my implicit or explicit data and provides me with a different experience in result. Mint.com is an example of a site that delivers significant value along the axis of Identity, showing me my data. But Mint also makes a powerful play along Personalization, showing me specific offers that could help lower my spending in various categories (like mobile services or banking). If Mint doesn't see evidence of spending in certain categories, it won't give me offers in those verticals (or at least Mint will deprecate such offers relative to those that seem personally relevant). Generally some elements around Identity are a prerequisite for Personalization but that's not necessarily so. A good salesperson offers essentially no value along the dimension of Identity but she will size you up and deliver a pitch that is finely tailored to you while refining her guidance around your reactions. Hunch is a site that provides very personalized recommendations without needing to know who you are through a decision tree model.
Social happens when others see my data. The power of Social is that my experience is materially affected by others and improved by the immediate or persistent network around me. Most of what I actively do on Facebook (i.e., pressing a "like" button), I do because other people see the effect and, through their reaction, motivate me to do more. As Facebook inevitably personalizes things based on my "likes", they will be layering Personalization on top of something that was initially Social. [As my co-founder Damon convinced me] Social is its own equivalent pillar to Personalization and not just a refinement of it. As for the relation of Social to Identity, it's reasonable to suppose that typical social functionality will require log-in but that isn't necessarily the case. Good parties are all about being social without the use of nametags and without the host shepherding your experience. Sites like Iminlikewithyou and Flikr can provide a sense of community and be social without requiring log-in.
Being able to offer Social (especially around a person's existing real-world network) on the Web is an incredibly new and fantastic possibility these days. You'd be a fool to ignore the potential effect of Social on your product. But Social is not the be-all-end-all. Lots of services could use much more functionality around Identity and Personalization. I would even be willing to sacrifice some of the features I have around sharing and connecting with friends on Facebook to be able to get more Identity and Personalization value; The number one most useful feature of Facebook for me is photo storage. My photos had to get uploaded and tagged, through killer social functionality. But now that those pictures are there, I would pay a meaningful amount of money to have those photos for my own reference even while I would hesitate to pay to be able to see new photos tagged with me. [I recognize that this is largely out of irrational overreaction to loss versus gain.] As for Personalization -- it drives me nuts that, when I x out an ad and say that it's repetitive, I inevitably get shown the exact same ad.
Ultimately, I subscribe to the mantra that you should focus your efforts fanatically if you want to succeed at something hard. There's almost certainly more danger in trying to pursue Identity, Personalization, and Social at once than in devoting your attention to a single line of development. In fact, many companies would be well served by culling the efforts they often inadvertently staff along whatever axes are non-core to their user value proposition. In conceiving a social product for example, challenge yourself to provide a major social value without requiring log-in or without providing an experience to one user that is any different based on their activity. Still, caveats aside, I'm hugely enticed by building products that are best of breed along all three dimensions of utility at once.