Today I read another one of Dave McClure’s entries regarding his Graphing Social Patterns conference; Dave’s post was about Facebook Application Monetization, a subject that I’ve covered on a couple of occasions.
One of Dave’s passages struck a particular chord with me:
in the discussion, one of the key items we cover is how Facebook could improve monetization — which is currently pretty crappy; ditto for MySpace and most other social networks of scale except perhaps LinkedIn. this is a super significant issue, since valuation of Facebook could go up dramatically if they ever figured out how to monetize all the sticky usage behavior they’re seeing.
Dave lists “the big three” mainstream, all-purpose social networks here. Dave asks how all three of them can improve monetization individually. Then it hit me:
Why in the hell are developers and investors putting their eggs into a single basket, whether it be the “Facebook” basket, the “MySpace” basket, or the “LinkedIn” basket?
I had a flashback to some of my computer science history lessons, specifically the platform wars of the 1980s between IBM, Apple, Microsoft, and numerous others. I thought of the billions of dollars developers spent dumping their non-Windows products and the scramble to utilize Windows 3.1 and later Windows 95 when those two operating systems effectively cemented Microsoft as the PC (96% market share) operating system.
Think of the current social network space as a situation similar to that of the operating systems 1980s: there is no mature market leader yet, thus it is dangerous for developers to put all of their eggs in one social network basket.
Facebook, for argument’s sake all intensive purposes, is the current market leader. as it is the biggest social network. I don’t have any data on-hand to indicate if it’s still the fastest growing; today Allfacebook ran an article suggesting that Facebook’s traffic has declined somewhat. The point is, however, that for widget developers like myself, developing products and services for the Facebook platform is the safest bet, today.
But what about tomorrow?
A couple of years ago, MySpace was all the rage. Remember the hype after Newscorp acquired MySpace? Rupert was hailed as a genius by the blogosphere and everyone was asking “how can we reach the MySpace generation?”
The MySpace Generation?
The MySpace Generation is a phrase that became antiquated within two years of its conception. It serves as a lesson in the temporal and volatile nature of the positioning of social networks.
Here in the lovely year 2007, the blogosphere is much-ado-about-Facebook and how it’s going to overthrow MySpace.
Is Facebook any fundamentally different than MySpace?
No; it’s just a different approach to a social network, and there is nothing to guarantee that someone else won’t come along with a better approach down the road, just like how Facebook did to Myspace.
What’s the impact of the ever-changing, immature social-network landscape on widget developers?
On the Yahoo! Widget blog someone authored a post regarding the ever-changing widget landscape for desktops and how developers are pigeon-holed into one platform or another (unless they use Yahoo! SURPRISE!) The same problem holds true for web-based widget developers.
How are we to choose from developing a widget for Facebook, LinkedIn, Myspace, or freaking Google? Why should we tie up our financial and human resources into the volatile social networking scene when we don’t even know which one will be dominant in the long run?
Speaking as a developer and a want-to-be entrepreneur, staking my businesses’ future in Facebook, MySpace, Orkut (Google), or any SINGLE social network platform is insane. If Facebook tanks next year and I lose my entire business channel and I have to invest tons of money into learning how to develop software for some new API, then I’m going to get hit in the pockets.
Many of the social media aficionados have drunken their own Kool-Aid, making absurd claims about Facebook. It’s been referred to as a social operating system, a Google-killer, and so on. Personally? It’s just a website with drunk photos and a bunch of Mr. Potato-head gimmick applications but with a TON of traffic. As a widget developer, I just want to be able to reach out to the portion of Facebook’s audience who might be interested in what my new web service has to offer.
More thoughts on this tomorrow.
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Comments 8
Aaron, I think you should have followed the Om Malik link in the article you quoted (here: http://gigaom.com/2007/10/10/facebook-users-dip-could-this-be-true/)
I actually agree with most of your post but you hit a nerve with me when you started talking about Facebook’s market position. For the record, Facebook is not the “market leader” or the “biggest social network”. In fact, not by a long shot. Malik’s article shows that Facebook has Unique Visitors in the area of 30 million vs Myspace which floats around 70 million.
As a matter of fact, from the same blog post, if you take Facebook’s growth from Feb ’07 (its lowest point on the graph) to now you get a jump of about 12 million unique visitors. In that same time frame myspace grew by about 4-5 million unique visitors showing that myspace, while not keeping pace, is still going strong. In fact, while going into Facebook’s decline of 9.3% the Malik post also points out that myspace went up by .1% in the same time frame.
Finally, and this is just one those “out of no where points”, but if you want to look outside the U.S. you’ll also see that MSN Spaces (of all things) is huge in Asia. As a whole, Spaces dwarfs Facebook with an estimated 120 million unique viewers worldwide. So while Facebook is growing fast that’s mostly because its pretty tiny in comparison to everyone else.
The reason this all agitates me is that you seem to be in the right frame of mind in that you realize that most of the blogosphere is drinking the Facebook kool-aid. Yet simply by being bombarded by the hype you’ve been tricked into drinking the kool-aid as well by having your perspectives shaped by all this unrealistic Facebook talk.
Posted 11 Oct 2007 at 3:37 pm ¶Hey Tom,
Your comment is absolutely true on all counts, but to clarify, I threw the “market position” talk out there namely for the sake of argument, not so much as to enter it into the canon of social media facts. I’m aware that MySpace still has a significantly larger audience, but again, the Facebook reference was for the sake of argument. In addition though, MySpace still doesn’t have a widget platform out yet, and Facebook’s platform has been garnering a lot of attention. I guess that would make Facebook the biggest social network that’s currently widget-capable with an in-house API.
Maybe I should call Facebook the “buzz leader” instead
I’m an American college student who’s been on Facebook for three years, so my perspective has largely been shaped by my own extensive experience as a user, as a developer for the platform, but I never would have started developing for it were it not for the hype.
Your points about what’s popular in other areas of the world and in other demographics rings true as well. I read the other day that Google’s Orkut is actually the market leader in parts of South America and elsewhere. I’ll have to see where I stashed that article.
Posted 11 Oct 2007 at 3:46 pm ¶absolutely… as soon as MySpace & Google & LinkedIn launch, will likely be worth checking them out & placing ‘bets’ on those platforms.
but for the moment, Facebook is the only platform that has a real API for development.
that appears likely to change next week with the rumored launch of MySpace’s new platform offering, and in November with the rumored launch of Google’s social platform. (both rumors reported by TechCrunch)
- dmc
Posted 11 Oct 2007 at 5:50 pm ¶I see what you are saying
Posted 11 Oct 2007 at 9:48 pm ¶Here is the rest of that post, for some reason three dots caused the post to get cut off (when are you going to community server again?
)
Ironically, Calacanis posted something on this today (http://www.calacanis.com/2007/10/11/facebook-reality-check-its-not-worth-100b-and-it-wont-crush/)
Like I said before, I did agree with most of your article. I guess the difference between us is that I think Facebook’s “buzz leadership” is mostly hot air and that they’ll have very little to offer once the aforementioned Myspace Platform materializes. So while I think your points are valid I think that it will be the Myspace platform that will become the defacto standard (if there is one at all).
Quick Disclaimer: I like Facebook a LOT more than Myspace which I absolutely hate. But based on my experience, as unique visitors go up each subsequent million is 5 times harder to get than the last million (I only have about 8 years on you age wise but that’s enough to have been recruited at 19 during the first boom so I know a little something about Web based companies and traffic). I think that puts Facebook at a significant disadvantage.
Also, on the topic of Myspace vs. Facebook, I’d assume that about 70%+ also have a myspace account making Myspace even more compelling.
I mean, for you it’s probably best for you to aim for Facebook no matter what just because that’s what you know and that’s where your passion is. But I think the best decision for most people would be to target a Myspace platform (again assuming it materializes at all)
Though, and I should preface this by saying I have no experience with the Facebook platform. The entirety of my Facebook development experience consists of reading your posts on the topic
That said, from what I do know I can’t help but think that porting will be pretty easy between platforms. Assuming most of the business logic is going to be identical and most of the interface work will be carried over completely I’d think a good modular design will make a port pretty easy. I mean, all you’re really getting from Facebook is profile information right? So I’d think you could literally get by with just having different classes for each social network and keep 95% of your code unchanged.
Posted 11 Oct 2007 at 9:50 pm ¶Well thanks for stealing my thunder for tomorrow’s article Tom. :p
I’m going to get into detail on how to design a Web 2.0 Middleware that encapsulates a lot of the common business objects into an identical set of classes for each API. That’s my solution to the future problem of “which platform?”
Take a look at the ACE framework, which is a wrapper facade between POSIX and Windows. I’ve performed research for the Professor who invented it (Douglas Schmidt, world renowned middleware and embedded-systems expert) and I think a lot of his concepts are applicable to these social network platforms.
In addition though I think a lot of the buzz about Facebook is just hot air too. Some of the shit people are saying is just fucking insane. It’s going to kill google? There aren’t enough drunk pictures in the world to take down Google.
P.S. Yeah wordpress chokes on random characters sometimes… Single tick marks have been the cause of the problem before, as have been three periods. I don’t know why.
Posted 11 Oct 2007 at 9:56 pm ¶My big idea: aggregators a la news aggregators: have authentication aggregators (and maybe optionally authorization aggregators as well)
So also similar to the little toolstrips that say (digg,reddit,google,etc) we will be able to cross-authenticate to all the social and other networks using a single-sign-on type of front end.
For apps that are ad-based as opposed to license based, about the only thing you need other than uniqueness would be age-verification which every service would like to be able to offload responsibility for but reap the rewards of.
So I could send an invite to my latest great FB app to folks who are *only* linkedin friends, yet they could still seemlessly access my app. That way only I the app-developer would need to utilitize the aggregator, simplifying life for the poor linked-in-only users, and additionally I could get the extra revenue from the enlarged audience without trouble for the new subscriber.
good posts,
Posted 12 Oct 2007 at 8:21 am ¶owen
I know OpenID (http://openid.net/) is one approach to the “authentication aggregator” idea. I don’t know how widely adopted it is. I know DZone (http://www.dzone.com/), the developer’s Digg, uses it.
Posted 12 Oct 2007 at 8:58 am ¶Trackbacks & Pingbacks 1
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