Why Facebook’s Network Effects are Overrated

A lot of people interested in free software, and user autonomy and network services are very worried about Facebook. Folks are worried for the same reason that so many investors are interested: the networks effects brought by hundreds of millions of folks signed up to use the service.

Network effects — the concept that a good or service increases in value as more people use it — are not a new problem for free software. Software developers target Microsoft Windows because that is where the large majority of users are. Users with no love for Microsoft and who are otherwise sympathetic to free software use Windows because programs they need will only run there.

Folks worried about Facebook are afraid for similar reasons. Sure, you can close down your Facebook account and move to Diaspora. But who will you talk to there? You can already hear people complaining about Facebook the same way they’ve been complaining about Windows or Office for years. People feel that their hands are tied and that their software, and their social network, will be determined by what everybody is doing.

I’m worried about Facebook. But I’m not too intimidated by Facebook’s network effects for two reasons.

First, using Facebook doesn’t preclude using anything else.

Twitter has enormous overlapping functionality with Facebook. Sure, people use the systems very differently. But they both ask you to create lists of friends and followers and are designed around sending and receiving short status messages. Millions of people do both and both systems are thriving. For the millions of people who use both Facebook and Twitter, the two services have had to negotiate their marginal utility in a world they share with the other one. People decide that Twitter is for certain types of short messages and Facebook is for others. But these arrangements shift over time.

And the relationships between services aren’t always peaceful coexistence. Remember Friendster? Remember Orkut? Remember Tribe? Remember MySpace? MySpace, and all the others, are great examples of how social networks die. They very slowly fade away. MySpace users signed up for Facebook accounts and used both. They almost never just switched. Over time, as one platform became more attractive than the other, for many complicated reasons, attention and activity shifted. People logged in on MySpace less and Facebook more and, eventually, realized they were effectively no longer MySpace users. Anyone that has been on the Internet long enough to watch a few of these shifts from one platform to another knows that they’re not abrupt — even if they can be set in motion by a particular event or action. Users of social networking sites simply don’t have to choose in the way that a person choosing to boot Windows and GNU/Linux does.

I’m sure the vast majority of people with Diaspora accounts use Facebook actively. This is not a problem for Diaspora. It is how Diaspora — or whatever else eventually achieves what many of us hoped Diaspora would — could win.

Second, Facebook is for the ephemeral.

Facebook is primarily used for information that was produced very recently. This week if not today. If not this hour. Facebook has an enormous amount of data that users have fed it that may be hard to get out and move somewhere else. But most people don’t care very much about having any regular access to the large majority of this information. What people care deeply about is having access to the data that they and their friends created today. And that data can just as easily be created somewhere else tomorrow. Or, with the right tools, created just as easily in both places.

Compare this to something like Windows where moving away would require learning, converting, and perhaps even writing, new software. Perhaps even in new programming languages that most developers don’t know yet. Compared to Windows, a migration away from Facebook will be easy.

Facebook’s photo galleries are an example of an important place where this holds less well. Social network information — i.e., the list of who is friends with who — is another example of something that is persistently valuable. That said, people really enjoy the act of finding and friending. Indeed, this process was part of the initial draw of Facebook and other social networks.

None of this means that Facebook is over. It doesn’t even mean that its ascendancy will be slowed. What it does mean is that Facebook is vulnerable to the next thing more than many technology firms that have benefited from network effects in the past. If users are given compelling reasons to switch to something else, they can with less trouble and they will.

That compelling reason might be a new social network with better features or an awesome distributed architecture that allows freedom for users and the ability of those users to benefit from new and fantastic things that Facebook’s overseers would never let them have and without the things Facebook’s users suffer through today. Or it might be a sexier proprietary box to store users’ private information. It doesn’t mean that I’m not worried about Facebook. I remain deeply worried. It’s just not very hard for me to imagine the end.

9 Replies to “Why Facebook’s Network Effects are Overrated”

  1. The fundamental difference between Facebook and MySpace/Friendster is they were the first service to sign up people that weren’t tech-savvy teens and twentysomethings. Older people care about privacy more than the above demographic, but they by-and-large only signed up to keep up with their younger relatives in the first place, so they’re anchored.

  2. I appreciate that you’re turning what you’ve been saying in person for a few years into a blog post. (-:

    I want to remind you of my concern from before, and here’s how it goes: big web services are dying out slower. That is to say: the ones that have been very social have started to consistently stick around longer. Twitter and Facebook have both been thriving for more than six years. Consider that: that’s longer than basically every pre-2006 service.

    I would argue that their longevity suggests something has changed in the environment that permits these services to last longer.

    I think that the rest of your argument is fairly sound, but I think this issue calls into question your comparison with defunct services like Friendster.

    I’ll offer you a theory, and it’s one you should shop around to any friends you have in the SF Bay social web tech startup scene: Twitter and Facebook are successfully moving toward being infrastructure while remaining viable businesses. It’s famously difficult to be infrastructure while also being profitable, but it seems it can be done.

    Your argument, then, sounds like a 1980s telco executive saying, “Look, DECNet is dying. Ethernet will go the same route.” At some point, technologies at a certain layer historically seem to gel and slow down their evolution, perhaps for better, perhaps for worse. Ethernet has not died yet — it’s the winner that has lasted. When we wanted to radically change Ethernet to a new, wireless form, we created 802.11 — wireless Ethernet — rather than re-inventing that layer entirely.

    I don’t know what evolutionary bridge Facebook will have to cross to maintain relevance in five years, but Facebook will be hard at work to make sure it’s still Facebook.

    P.S. You’re good at writing flamebait blog post titles. (-:

  3. I think 6 years is still a tiny period of time. And I don’t know what’s going happen. But If you could look in a crystal ball and tell me Facebook would be as dominant a force then as it is today, I would be surprised.

    Your comparison to Ethernet is wrong. Ethernet was never up against what Facebook is. Every firm large enough to build or buy their own internal social network system is doing rather than turn over their firms private data to Facebook. There are political reasons people object to FB that simply never came into the picture for Ethernet. If they had, they might have suffered the same fate as DECNet.

    The only technology firm that has really succeeded in becoming infrastructure in a very deep way in Microsoft. I’m not saying that FB can’t become MS. But for the reasons I’ve articulated above, I think that they’re going to have a much harder time creating and protecting that monopoly.

  4. I am very thankful to Facebook. They have opend my eyes that the Internet (especially HTTP+HTML, SMTP) has become a crappie place full of morons. I am now a happy user of gopher and bulletin boards and try to avoid http as much as I can. I would not have found gopher if there were no Facebook.

    But there is also something sad about that: Idiots like M. Zuckerberg are rolling in money and the real people who make nearly everything possible are not worth mentioning (I am thinking of Dennis Richtchie -> C, the LISP creator, and the list goes on…).


  5. You should include the comparison with how users switched/are switching to Instagram. Facebook has enough money (and enough technical acumen) to purchase any competitors before their social graph gets too big. Unlike News Corp that did not have the gusto to compete with facebook as they were emerging.

  6. Is a funny twist that I learned from your post from G+, but I disagree with your arguments, I think the facebook network effect is strong and getting stronger.

    You say “using Facebook doesn’t preclude using anything else” which in theory is true, but in practice our time is limited, one can’t afford to waste the same amount of time in more social networks.

    I agree about facebook being ‘for the ephemeral’, but I also see more and more using facebook pages, which are NOT for the ephemeral, they are public and indexed by search engines.

  7. Hi,
    Don’t forget that you can use a facebook connector with Diaspora, so that you can use both accounts inside it and achieve the transition nicely.

    Even better, Friendica. The facebook connector is much better and Friendica offers many more functionnalities.

  8. There are Interfaces from Diaspora, Friendica and even offline-tools in Gnome3, so one does not have to use FB from inside a web-browser. Using those interfaces probably means giving less data to FB, so this is positive.
    Growth seems to have stopped in the US seemingly, but of course the managers hope to see more growth in emerging markets like Afrika, South America and India.
    It is important that people there get an idea of privacy, before they are thrown into the cold water. There has to be awareness of FB´s user-tracking, technical measures against that.
    And finally the more people who give up their FB-account completely, the better. Even if you do not use the service directly anymore, please be aware that you still serve as a node inside that network and thus produce resources for Z.,the ruling autocrat, to further their aggressive marketing strategies.

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