Tim O’Reilly: “I want tools that augment my ability to remember, manage, and communicate with all the people I deal with every day, in both personal and business contexts… Microsoft needs to invest in the future of applications where Microsoft and Yahoo! are strongest, and where there is significant opportunity for innovation. Email and other messaging platforms meet these criteria.”

Tim’s thoughts about the proposed Microsoft/Yahoo merger brought back some memories of some conversations I had at MIX about 2 years ago about social networking applications. In that discussion, one of the participants (no specific attribution because I talked to so many folks) remarked that the interesting thing about social networking applications is that e-mail is by far the single most important element of a social network. Nearly all social networks offer to mine your various e-mail contact lists/address books. Without that data, no social network can effectively spread its reach and expand the power of the network itself (the “network effect”).

It seems obvious that one of the major web e-mail providers (Live/Hotmail, Yahoo Mail, GMail or AOL) could deliver a strong social networking application that works seamlessly with their existing e-mail software. This is especially the case for networks like LinkedIn where the network itself is a glorified contact list with search and a few features built around social distance. And yet I haven’t seen anyone other than Yahoo remotely approach social networking in this way. Yahoo’s last major e-mail revision incorporated features into e-mail that made it a more effective “portal” with access to your contacts, their online presence, etc. It doesn’t seem like a reach to incorporate widgets into the e-mail application that deliver other applications (think Facebook) to begin sharing information with your contacts and friends without sending e-mail in the traditional sense. Of course this is an evolutionary example. There are potentially revolutionary ideas that could take root and act as a disruptor for traditional e-mail and social networking applications. Given the lack of disruptive change in social networks so far- most of them are exactly the same in their approach to building networkings and sharing information- I expect we’ll see some of these new scenarios very soon.