When a for-profit company gives you something for free, with little chance of ever charging, you have to ask, “who is the customer and what is the product?” Facebook has (reputedly) 500 million users, none of whom pay a penny for the service. Twitter has (possibly) 175 million users, again, none of whom pay anything for the service.
Who is the product? Who is the customer? Do you even care?
Facebook, how big?
Facebook has obtained more than $500M from investors to grow facebook.com to the size it is today, and has not taken a single penny from any of its users. In order to pay back the investors for their extraordinary risky investment, the investors must be looking for something like 10x cash back. That’s more than $5 billion! Of course it’s currently valued at over $50B. Just hold that thought for a second.
Now a second thought: billions of people can use email and not have to be part of one, single, organisation. How can that be?
Email is essentially a protocol. It’s called SMTP and is described by various RFCs. Any server that supports the SMTP protocol can advertise its MX record via DNS and receive email for that domain. Any client that ‘talks’ SMTP can send email to any SMTP server (it can reach). In fact, the SMTP client (or email client) can talk to its local SMTP server which will then forward on the email to its final destination.
This is, of course, a distributed system. Due to an open protocol anybody can set up an email server and play in the big email ecosystem. Of course, the original inventors of the SMTP protocol didn’t envisage SPAM as we know it, and thus it was designed for a naive, friendly, co-operative world, where email users wouldn’t spam each other. i.e. academia.
Facebook is set up as a business. It has its customers’ interests to serve so that it can be a profitable company and return its investors money and provide a return for its financial stakeholders. The problem is, is that Facebook users are not the customer. They are the product that is sold to the actual customers who (I suspect) are advertisers. Thus, Facebook’s values aren’t necessarily aligned with their users, which means, almost inevitably, privacy is not Facebook’s key concern.
So if with Facebook, the users are the product, what are they actually selling? The social graphs its users create, along with the logged minutiae of the their lives, could just be the product that Facebook is, and will continue, to sell to advertisers. Your privacy is Facebook’s product. Your social graph (in theory) has value to advertisers. Do you want to exchange your privacy to multitudinous corporations for free access to, well, Facebook?
But the main problem with Facebook is that, in order to do Facebook with somebody else, you have to have an account at Facebook.com. It’s a closed system. Notice the difference to email? I don’t have to have an account at (the fictitious) email.com to send emails to other people. That would be absurd!
History has a habit of repeating itself. Remember CompuServe? AOL? MSN (pre-internet)? CIX? These were all silos. CompuServe had special pages only subscribers could see. Of course, they all went the way of the dinosaur, or were heavily modified, because the Internet was more useful. And Facebook is simply a better CompuServe or AOL.
Still, you may ask, “what’s wrong with a better AOL or CompuServe?”
Proprietary Silo vs Open Data and Open Protocols
Before answering that question, let’s consider what the alternative to Facebook or Twitter would be like. By way of analogy let’s look at Twitter vs status.net.
Twitter and status.net basically do the same thing: they are broadcast micro-blogging systems that let you send the equivalent of an SMS over the Internet to your followers. The best known example of status.net is identi.ca.
If you want to be part of the Twitter-verse you have to get an account at the sole provider of twitter-ness: twitter.com. Every tweet you send goes through twitter.com, is stored there, analysed and also provided to other (rich) organizations via the Twitter fire-hose. Not a great deal of privacy there, apart from the notional privacy that you can ‘protect’ your account. It’s still going through twitter.com.
status.net is like Twitter except that it is both an Open Source project and a Open set of Protocols. The difference is that status.net is like email; it’s a protocol that anybody can implement. You could subscribe to any status.net server and still be followed by any other status.net user in the world. Therefore, your tweets, or rather dents would only go through the distributed servers, the same as email today.
Another advantage of a distributed network is that it’s more resilient to failure. Twitter went down on Christmas day because every tweet goes through twitter. Email didn’t go down, except maybe a few distributed nodes did – but email didn’t fail en masse.
So back to Facebook and silos? I definitely want to put an activity stream (or lifestream) on the web. I currently use twitter for that because so many of my friends do. I also want to be able to put the odd photo up, publish a free/busy calendar, and enable old friends and new ones to find me and get in contact. But I don’t want Facebook to own that information. I want to own it. I want it under my own control, possibly in my own appliance running somewhere on the net. A distributed system that talks to other systems to exchange the data all under my control, with my privacy settings which won’t suddenly change because an over-arching corporation needs to sell more of my privacy.
Of course, it is coming, and there’s even some competition in the space. onesocialweb and Diaspora are both trying to solve the Facebook problem. The Freedom Box project, inspired by Eben Moglen, is also trying to work in that space. These will be tools that work in a distributed fashion.
When will it displace Facebook and Twitter? I think the jury is definitely out on that one; AOL, MSN, Compuserve, MySpace: the Internet is littered with the corpses of previously all-mighty corporations that owned the space.
Personally, I want Facebook to fail. I want a future where people control their own information. I want the semantic web and the power of pull, not the push-web. I want my appliance with my data and my control and I’m prepared to pay for it. I guess I’m going to have to wait a bit!
While the social graph has some value, don’t loose sight of the fact that Facebook is the most visited web property in the UK, and many other countries. It also has the longest dwell times. Its ability to serve ads that are targeted by age, gender and sociographic, on it own, makes it uniquely valuable.
Diaspora has a huge hill to climb – people already have the bulk of their friends on Facebook – and the fact that Facebook has such a huge platform across so many countries is always going to make it highly attractive to businesses and marketers looking to spend their on-line marketing money.
I do agree with the fact that we are due a swing back to disparate platforms again though. It’s the way of the web!
You are probably right; I’ve overplayed the value of the social graph. As a landing page, Facebook does so many things right. And, again, as you say, they have immense traction with so many people on it. Diaspora, onesocialweb, and other projects do have a huge mountain to climb; the biggest question is whether Facebook still relies on the coolness factor or whether it’s grown beyond that. If it hasn’t then the new, upcoming, generation will simply use something else?
You might want to take a look at fluidinfo.com. Fluidinfo is the first openly writable metadata for everything. It’s an online storage and search platform and it’s design supports shared openly-writable metadata of any type and about anything, provides modern writable APIs, and allows data to be branded with domain names.
Fluidinfo’s Terry Jones has spent years developing a system that makes it possible for data to be social, and has created a platform which facilitates and encourages the growth of applications that leave users in control of their own data.
BTW Fluidinfo was just awarded Best Technology at LAUNCH.
Thanks for the link on Fluidinfo.
The issue with alternatives is getting the critical, mass, adoption. Email was the only game in town (at the time) and so it became the default. I think it will be a long, slow, steady climb by the alternatives, probably only amongst the tech-orientated communities. However, there is also the ‘coolness’ factor and the next generation of Internet users.
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“The social graphs its users create, along with the logged minutiae of the their lives, could just be the product that Facebook is, and will continue, to sell to advertisers.”
Mark Pesce, in his LCA2011 keynote, said something similar (and took it a bit further by comparing this to the way cigarettes are marketed in Western countries):
“Your social graph is the most important thing you have that can be represented in bits. With it, I can manipulate you. I can change your tastes, your attitudes, even your politics. We now know this is possible – and probably even easy.”
The whole keynote is well worth watching once/if the video is released. For now though, there’s a full transcript of it on Mark’s blog:
http://blog.futurestreetconsulting.com/2011/01/28/smoke-signals/
Yes, for me, it’s the privacy angle that is most worrying about Facebook. There’s a book called “Capacity” by Tony Ballantyne, which amongst other things, explores what happens to humanity when artificial intelligence far outstrips our own intelligence.
Essentially, humanity becomes managed, much how we look after our pets. In more prosaic (paranoid?) moments, I wonder whether Facebook is part of the nascent beginning of AI that will eventually come to control us without ‘us’ even knowing about it. Perhaps it’s inevitable?
It is time for a world for every individual where he is totally in control what piece of informatie he shares, with whom, on which location and when; can update, replace, move, broke, repair, delete etc this information. This should be fully integrated in a computer operating system just like David Siegel visualizes.
Time for a centralized individual web as a decentralized form against the big silo’s of today and the past.
We need a sort of a personal data store as a open standard utility for every user on the web. It will take a long breath but I’m sure it will be there for everyone on a day in the future.
Before that worlds takes of we first do need to 1) aggregate what we have given away in the past 2) make our personal data smarter than today with metadata (like a FluidInfo layer) in a open standard like RDF 3) add the application layer for the end-user so he can do anything with it he would like
What do you think?
Yes, I agree. Small steps are happening, and the evidence is in all of the projects that are trying to move towards a decentralised world, rather than silos. The main ‘jump’ is to make it all usable for the content creators; that’s really where Facebook shines.
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