Simple thoughts on Facebook’s complex plan

One of the biggest stories in social media this week is Facebook’s plan to make their social graph platform ubiquitous. A few things to keep in mind: network effects, natural monopolies, and costs…

One of the biggest stories in social media this week is Facebook’s plan to expand its platform availability and allow users to link disparate online activities into a single social graph. I see this as a case of “aggregate or be aggregated” – and the biggest question mark is how Google will respond.

There’s some great writing out there already on Facebook’s plan: Robert Scoble describes Facebook’s ambition. Jeremiah Owyang calls it a Crusade of Colonization. Shiv Singh sees it as Social Glue.

Some of my quick thoughts:

  • Network effects aren’t unlimited. Facebook operates the universe’s largest social network. We all know about the benefits of network effects – but unlike a theoretical hockey-stick graph, past a certain point network effects diminish. You don’t have to search too hard for people who’ve gone through a “friend/follower purge” to reduce network noise. Bigger networks aren’t always better from a user perspective.
  • Natural monopolies have huge barriers to entry. Scoble uses a railroad analogy; earlier this week, Shawn Morton told me a story about a speaker who equated social media with the nuclear power industry. While Facebook’s investment in technical and human resources is substantial, it’s not exactly a natural monopoly on the scale of a railroad, electric utility, or airline. And the nature of social technologies tend to disrupt institutions; don’t be surprised if a new entrant – comprised of staff who’ve departed Facebook – undercuts Ubiquitous Liking.
  • This isn’t free. Keep in mind that participating in this effort isn’t free for anyone. Individuals gain recommendations from friends, so far on things like hockey players and jorts. The cost is a bit of privacy. Brands stand to gain referral traffic. The costs include sharing customer data. Whether individuals and brands decide to “pay” those latent costs, vis-a-vis personal experience or online business goals, will determine Facebook’s success or not.

I’d add a “like” button here but my blogging platform’s not ready yet, so you’ll have to do it the old fashioned way…in the comments below.



0 thoughts on “Simple thoughts on Facebook’s complex plan”

  1. Here is my DIY “like”…

    I agree with your 3 points…also it seems like we can’t blink for as moment or we will miss an announcement of the latest FB do over (or Google feature) sometimes before we have even gotten comfortable (or gotten our clients comfortable with what it means to them)) with the previous one.

    Marianne

  2. Peter, yes there are huge barriers to entry but ….. just because Facebook is on top of the world now, it doesn’t mean it will always be there. Anyone who declares publicly that “privacy is dead” as Mark Zuckerberg, the ceo of Facebook, has done should be aware that MySpace and Friendster were once upon a time (and not too long ago) the most popular social networking sites.

  3. I agree with all 3 points. To expand on your first point, we just had the signal-to-noise discussion on my Facebook wall a couple of days ago. It got an immediate and large response. The ubiquitous ‘like’ has potential as long as users can opt in whether or not to post it to their feed. If ‘likes’ end up being pushed like ‘tweets’ – in high volume – pages will be hidden and perceived benefits gained will be lost. @andyy needs to develop ‘Selective Likes’ (like Selective Tweets)! To your second point … maybe Bazaarvoice will surprise us.

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