Is a social network a product or a feature?
Comments: 1 - Date: October 25th, 2007 - Categories: User Experience, Social Networking
What I mean is, when a website offers “friending,” or social networking capabilities, is that valuable enough in itself to be a marketable product? Or is it just a necessary tool or feature that is part of a larger software solution? Can a company make money just from the fact that it offers social networking and a lot of people use it for connecting?
The Economist has an interesting article that poses this question (Social graph-iti, October 22, 2007), in which it said basically says “No. It is not a product.” Facebook’s $100 billion valuation may be overestimated by those overly-enthusiastic about the possibility of marketing products through social networks. (Sorry, Facebook, I don’t mean always target you in my blog posts. It is just that you are the biggest target right now.)
The article has some interesting points:
- Facebook’s value seems to be based on its large social network. Where as the user experience innovation in Facebook is around two things: the friends-centric newsfeed and the importing of applications. These features are being replicated by other sites as we sleep.
- Social networks do not scale in usefulness, meaning that they do not become infinitely more useful as they grow in size. Once everyone is in the network and everyone is connected to everyone else, there is limited information to be learned from the network and limited utility in using its paths for accessing information. Bad investment!
- Observe how exclusive social networking sites are popping up everywhere (aSmallWorld and Ning are two examples). Exclusive networks have special powers and it is these that marketers and advertisers should want to get into.
I’m back! I’ve decided to make a concerted effort to blog more frequently. It is a great way to reflect on what is going on in the world and I haven’t been taking the time to do that recently. And now that I’m back from a vacation and nearing my one year anniversary of working at IBM, I’m in the mood to make a few adjustments. 