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Basically what people are saying is that it’s a bad idea to give sites your usernames/passwords when you sign up. This creates a bad anti-pattern and sets a horrible precedent for users who simply give their email user/pass to hundreds of different startups with dismal security standards making it very easy for hackers to get to your sensitive data. It’s called the “password anti-pattern”.

In my mind Flickr provides probably the best page-flow pattern. So I’m saying the PROVIDERS are making this anti-pattern possible. Facebook must make it VERY easy to export users, so must Gmail and so must Yahoo etc. This must be standardized so that containers (using Open Social terminology) can provide that data using some kind of token system, and it must also happen in a process that doesn’t ask for you user/pass. I believe that because it’s not possible, networks are leaving developers with no other option but to do screen scraping.

Ultimately, the problem represents an opportunity for Internet companies. "In the end, whoever moves first to be truly open will have the advantage," Saad said. J. Trent Adams, founder and chief innovator at Matchmine, another vendor pushing for data portability, concurs. A stealthy startup could develop a clever application or service built on data portability standards and force other vendors to respond. "All of a sudden, it's the right idea, and the big boys will have to react," Adams said. In other words, Internet companies who insist on locking up their users' data to protect their businesses might soon find themselves instead stuck in the mud.

Who really owns your address book? Many Internet companies - like Google (GOOG, Fortune 500) and Yahoo (YHOO, Fortune 500) - say unequivocally that you do. If you sign up for free e-mail accounts on their services, you're free to take your friends with you and export your contact lists to any service that you like.

But Microsoft (MSFT, Fortune 500), while publicly embracing the idea of openness, has been saying something different behind the scenes. Since last summer, lawyers representing the company have been sending cease-and-desist letters to startups that offer new users the ability to import their Microsoft Hotmail contacts. In a move that Valley guys are deriding as ham-handed, Microsoft is offering a quid pro quo: Third-party sites can access Hotmail contacts if they make Microsoft's instant-messaging client available to their users - for 25 cents per user per year. Then the company says it will waive the fee if the sites make Messenger the exclusive in-network messaging client. Such a deal.

There is a better way, of course - though it remains to be seen whether it will work. A group of companies, aligned under the banner of the DataPortability Workgroup, is trying to craft standards that would make it easy for the data we collect online to move as freely and securely from one website to another as we do. As long as two sites abide by the DataPortability rules, they can effortlessly send anything back and forth between them - data, photos, address books. "It's safe, secure, painless," says Chris Saad, the Aussie who co-founded and chairs the DPW. Hundreds of individuals and several leading companies - including Yahoo, Facebook, Google, and even Microsoft - have signed on to the workgroup, and Saad says he's optimistic that we'll see a system in place later this year.

However, the overall value of these companies is still largely based on growth potential, which now seems shaky. Microsoft's investment in Facebook valued the company at a massive $15 billion. But in November, Twitter refused to be bought by Facebook for a reported $500 million of its stocks plus some cash.

Chris Alden, chairman and CEO of Six Apart, says that there simply isn't enough capital in the current market to sustain so many social-networking companies. "You'll see more consolidation in the next year or two," he predicts.

In October, the third most popular social-networking site, Hi5, announced that it would cut between 10 and 15 percent of its staff. And in November, the business-focused networking sites LinkedIn and Jive said that they would slash their workforces by 10 and 40 percent, respectively.