Reid Hoffman, founder and chairman of business social network LinkedIn and now a partner a Greylock Partners, talked this afternoon about Facebook’s ambitious new Open Graph initiative.
Hoffman was speaking at the annual meeting of the National Venture Capital Association. Facebook’s recent move to spread its plugins and “Like” buttons across the Web has drawn criticism because it gives the social network so much data about user activity. However, venture capitalists at the conference sounded less interested in privacy concerns and more in what it means for business. Specifically, one VC asked Hoffman whether the Open Graph would be good for other Web 2.0 services.
“I think it’s a great idea,” Hoffman said. “It’s very bold. It’s a good poster to all entrepreneurs — ‘here’s how you can think big.’”
As for web startups, most of them will benefit from the additional social features that the Open Graph enables, he said. The ones who will suffer are those competing directly with Facebook’s plugins or with upcoming features like the social toolbar Facebook will bring to outside websites. Hoffman compared Facebook to a tanker ship. Most companies will be able to pull their ships alongside the big Facebook vessel, but there are a few that will be destroyed, because they’re directly in the tanker’s path.
“That’s always what happens in these kinds of competitive circumstances,” he said.