This guest post is written by David Sacks, the founder and CEO of new startup Geni. Previously, he was COO of PayPal. He also produced the movie “Thank You For Smoking.”
For the last several years, Yahoo, MSN and AOL have all suffered a declining share of pageviews, but that does not mean the portal is going out of style. Rather it has been redefined, first by Google, and now by Facebook in potentially even more profound ways.
The core question a portal needs to answer for a user is “How do I find the information I need?”
In the early days of the web, the answer was browsing, which made sense when there were a limited number of useful sites. (Remember when it was a big deal for Yahoo to put the “New!” or “Recommended” icon next to a website’s name in their directory?) But as the number of websites became infinite, search replaced browsing as the dominant paradigm for finding new sites, and Yahoo’s failure to keep up in this area allowed Google to take the lead.
Google has continued to leverage its lead in search to become a full-fledged portal. Once users have found what they are looking for, Google makes it easy, through their iGoogle product, to subscribe to that content through alerts, RSS feeds, or a huge selection of widgets, all of which are compacting more useful information onto fewer start pages than ever before. As a result, iGoogle has become Google’s fastest-growing product. But iGoogle has a serious limitation: it doesn’t involve sharing; each user has to make an individual investment in set-up and can’t benefit from the work of others. It’s not really a Web 2.0 product.
Facebook has a new answer to the portal question. The “social graph,” or your network of relationships, will push information to you. You’ll learn from your friends. Thanks to Facebook’s new developer platform, the types of information being disseminated now include not just news, photos, events, and groups but also music, videos, books, movies, causes, political campaigns — and the list is rapidly growing into almost every conceivable category.
The advantage of this approach is that it makes it relatively effortless for users to access a world of information that is both increasingly comprehensive and personal to them. Even if all this information were available through search (and it’s not), search actually requires work; the user must know what they’re looking for and type it in. Then they must parse the results to determine which are valuable, labor which is not shared and reused by others. By contrast, Facebook requires no work once your network is set up. Your friends push information to you that is likely to be useful, and if not you can tune your preferences until it is. Facebook promises a kind of Socratic knowledge: it tells users things they didn’t even think to ask.
While the process of structuring new kinds of information for the social graph to distribute is still sorting itself out, it is easy to object to the frivolity of information on Facebook. For example, Facebook is great at telling me what my friends just had for lunch, but how about hard news? Well, for starters, I’m waiting for the Digg application to not only display articles I’ve digged on my profile, but also to aggregate all the articles dugg by my friends. This could lead to the kind of social news site that MySpace promised but failed to deliver.
Not only Digg, but virtually all Web 2.0 applications which are based on the wisdom of crowds can be reconceived as Facebook apps based on the wisdom (or trust) of friends. To the extent that these services cater to publishers who seek a mass audience, such as YouTube or Flickr, the social graph will not threaten their business. But to the extent they publish content intended for friends, or if the value of their service increases with the participation of friends, these applications face only two choices: get each user to recreate his or her friendship network on their own site or migrate their service to the Facebook platform lest someone else does it first.
The potential for Facebook to layer on any feature whose value increases with the participation of friends is an incredibly broad canvas for a portal. Moreover, as each new application gains acceptance, it enriches the overall value of the network and makes it incrementally more likely that the next application will be tried. Much of what we know as “Web 2.0″ will eventually be rebuilt on top of Facebook.
To be clear, the social graph will not replace search, in the same way that search did not replace browsing. And search may still be more easily monetized than the social graph. Still, as a basis for a portal, neither Google nor Yahoo has anything nearly as cohesive holding its properties together. Google can layer on any feature where search is paramount, which is hugely valuable, but as it expands beyond this core competency, it becomes increasingly hard to press its advantages into new areas. Yahoo already seems to have reached the limits of its far-flung empire, eliminating redundant operations such as Yahoo Photos.
In my view this is a misdiagnosis of what ails Yahoo. The problem is not too much peanut butter (i.e. that it’s spread too thinly). The problem is the bread at the core. Browsing plus second-tier search is not sturdy enough to hold everything together. The new portals are defined by the quality of their bread, not their peanut butter.
Yahoo was right to focus on an acquisition of Facebook but not for the reason it thinks. In its view of the world, Facebook is just another media property, a particularly fast-growing and sticky one to be sure, but ultimately just more peanut butter. In reality, Facebook’s social graph could have provided the bread to connect Yahoo’s far-flung empire.
But what would be in such a deal for Facebook? They will have their own empire soon enough.
Find out more about Geni at the Techcrunch Database.
A lot of good points, I guess we’ll see if that’s right. I expect it is, at least to some degree. I just don’t think it’s out of reach for either of them to still make up ground.
Anybody know Zuckerberg; I want in on the friends and family ;O)
Just went to facebook to learn more since it now lets those of us out of school partake. “Facebook is made up of many networks, each based around a workplace, region, high school or college.” my social circle shouldn’t be based on any of those four segments. 43 things, blogging in general, myspace, etc. are all powerful social animals because they are flexible in their networking. Does facebook really segment only on those 4 areas? Not a flame here, just curious. If it really is a lot more they need to focus some attention on their introductions.
When I search for information, I all too often see data that is irrelevant. Yet as a result of this exercise, I am exposed to new ideas, resources and opinions. There is a danger in surrounding yourself with the voices you know or with whom you share common interests.
David, are you an investor in Facebook?
The weak point in this argument, IMHO, is the dependence on the “wisdom of the crowds” from a social networking point of view. Its more that one would depend on “selective wisdom” - that of a sub-culture, rather than generalized wisdom.
Take the digg example, for instance.
I may have friends who I know from my college days, but their interest in say neon-colored phones may be something that is of no value to me.
The point is that social networks of value (value to the individual, not advertisers) are by definition, specialized social networks. I would probably belong to 50-100 social networks based on my interests, history, culture etc.
Geni itself is one such social network organized around the concept of “being related”. And in the design of Geni, I would assume that you would have specialized concepts and UI’s that leverage that — the family tree builder for example. Note - I checked out Geni a while ago, and for about 5 minutes..so dont expect any major insights.
So the success of a social network (moving from generic activities like photo sharing to more specialized activities) depends a lot on how it allows specialized subnetworks and groups to exist and evolve. And that I think is Facebook’s challenge. I also believe that other aspects play an important role here - search, google groups like features (community aspects I guess).
David,
Thank you. I really enjoyed your article.
This is pretty brilliant, but I think it gives a little too much credit to Facebook and misses the potential for mischief inherent in this line:
“…your network of relationships, will push information to you. You’ll learn from your friends.”
This is why there’s a rush to Facebook by all sorts of traditional players. The scent of mass marketing is SO appealing. The trouble, of course, is in the definition of “friends” and the altruistic notion that information pushing can be a righteous affair. History, human nature and the lure of the almighty buck suggest otherwise.
Browsing and search are two powerful means by which the user can escape the push world and make decisions on his or her own, and I can’t imagine that the next notch on your graph will revert. Web 2 is as much about pull as it is social, and while I certainly agree in the social power of the web, and just don’t buy that Facebook is the second coming.
Isn’t the fact that most major sites are experiencing declining page views a product of the simple fact that there are more web sites on the internet? There are only so many eyeballs, and the number of websites are constantly increasing.
So, it seems logical that pageviews will only continue to decline as the Long Tail of the internet only gets longer. Seems somewhat obvious.
Totally agree!
This is what ListAfterList.com is trying to do
http://www.ListAfterList.com
It is trying be the first Web site that is a combo of all 3
interesting account of the glue. it looks like facebook are emerging from the crowded social sites, but have they got the talent or muscle to make killer apps that will ensure anything other than spam gets ‘promoted’?
Fun! I just interviewed David Sacks for http://www.scobleshow.com (the video is up there now).
I don’t think Facebook is a portal in the same sense as Google or Yahoo. Facebook’s site fulfills more of an entertainment and social need, while Google/Yahoo actually tries to help the user find information they are actively looking for. There is no question that social sites could start to rival the advertising power of search engines as page views and the amount of time users spend online increases, but I believe search engines will always provide a better answer to helping a user find the information they need.
Also, the obvious pandering to Sacks by Arrington/Techcrunch with the unbelievably rosy reviews of Geni and now this article are disappointing. I hope there’s a return to more objective blogging.
I don’t know David. I am looking at MySpace (less so on Facebook) & I still see as one of the main issues why there are so many users there whose last login was eg 9/1/04 - after a while, who cares? I don’t want my friends’ recommendations coming at me every 6 minutes, and I already pretty much know what they like and dislike. When I’m seriously searching, I like to tap into a much broader audience, and I’m not going to link from friend, to a friend of a friend, to a friend of a friend of a friend to see if he liked some movie and therefore because he’s 3 degrees away from me I might take his opinion with more levity than a complete stranger to whom I have no ties.
I see the future becoming a mix of portals, social networks, and search, all together. Why do search results continue to limit my results? They need to be more interactive, let me continue filtering from search within results, etc. I think search on the whole is still completely infantile. I want formal portals for my news, for information that I would otherwise have no way to find, more professional, usually better researched etc. I want to keep in touch with my friends and family and what they’re doing lately etc. and I want my searches to actually yield useful results. Seriously I think that the photo sites like Getty have better search mechanisms than Google although I understand “everything” in the world (ie everything Google indexes) can’t be beautifully tagged and cross-referenced.
I still think that I have yet to see the solution anywhere.
Amy,
Try search filtering using allthat.com
Stew - “pandering to Sacks”…yeah, he loved it when I wrote about all the things they did wrong:
http://www.techcrunch.com/2007/01/20/geni-blew-it/
Guess, I was confusing it with your latest posting -
http://www.techcrunch.com/2007.....valuation/.
“If that happens, the $100 million valuation will look like a steal.”
Not the “blew it” one where you ripped them apart (tongue in cheek) for the wildly successful spike in traffic they couldn’t handle.
Mike - fyi: you can’t click on any of the highlighted links in people’s comments.
When 60% of the US population does not accept evolution as fact (source: Wired, 2007 May, p.60-61), I am not at all encouraged by the coming “wisdom” of the crowd.
Beyond the pesky subject of science, clearly The Crowd gets it right when they cause upstanding people like Paris Hilton to become more of a populist celebrity than Wangari Maathai (yeah, I know… look it up).
Further, clearly The Crowd in the blogosphere has been great for increasing the value of journalism, ethics and the concept of “the press” which used to actually mean something in our society.
I’m all for increased amplification for personal opinions, but to think that The Crowd will always (or even more frequently) be wiser than the scientific process, real journalism and other similarly deeply important things for our society is simply absurd.
Stew - yeah, ok. whatever.
Former paypal coo did “thank you for not smoking”? Who would of guessed it, great movie.
I do however hope that facebook remains independent (or gasp, goes IPO), in this case sandals can do a better job than suits.
So David do you see the future of Geni being able to interface with the Facebook platform’s SDK?
Facebook socializes friends and schools.
Geni socializes families.
Linked-In socializes professionals could be mixed in as well.
Shake and pour - that’s one powerful social network cocktail. And with today’s acquisition happy “old media” and “new media” David’s real point seems that Facebook does not have a perfect match in an M&A of crowdsourcing…yet.
Disclaimer - Geni sent me swag and I am running a contest to give it away.
http://www.dkworldwide.com/tec.....trackback/
I agree with Terry Heaton , define friends and define underlying motives or cultural views when it comes to basically “push Technology” are you really getting the information with unbiased information or are you getting a number of selections with people that feel they may have their best intrest at heart but is biased.Don’t get me wrong it will be a useful tool of insight that may well be “pushed” with like minded people doing you a great service but there is the chance of misinformation that dosen’t allow you to get hard facts to learn or make a rational interpatation of what your trying to accomplish.
“Your friends push information to you that is likely to be useful, and if not you can tune your preferences until it is. Facebook promises a kind of Socratic knowledge: it tells users things they didn’t even think to ask.”
The problem with social networks is that a lot of the people on your friends list aren’t really close friends, and even if they are, I don’t necessarily care what news they find interesting, what book they just read, what movie they loved, what cause they donated to, etc. Even if I can “tune” my preferences, the volume of information I don’t care about is likely to be so overwhelming that I just “tune” it out completely. In today’s fast-paced, information-overload society where most people simply struggle to stay afloat on an ocean of data, I doubt very much that the average person has the time or desire to be told all sorts of things that they didn’t think to ask. This notion of a “Socratic knowledge” is naive and unrealistic.
All of the Web 2.0 hype overshadows the fact that there are still a lot of areas of life where you don’t want or need “friends” pushing you information and advice. If I am looking to go to a good movie on Saturday, sometimes I want to see what professional film critics are saying. If I want to read a good book, I might check out the NY Times Bestseller list. If I donate money to a cause I’m passionate about, I don’t need to broadcast that fact to everybody I know. If my wife has a strange growth on her toe, I want to have a doctor diagnose it - I don’t need my friend who flunked out of med school because he spent too much time on Facebook telling me that there’s nothing to worry about. Don’t get me wrong: a relevant recommendation here and there from friends can be one of the most powerful motivators for “checking something out” but I don’t need a constant stream of this data provided by a service like Facebook. In fact, the power of recommendations from friends loses its power when you’re bombarded with them! The reason word-of-mouth can be so effective is that when a friend takes the time to pick up the phone to suggest that you see a new movie or read a new book, you know that it must have been good and that they sincerely think it’s of interest to you personally. Can you imagine how ineffective word-of-mouth would become if every friend automatically called you everyday to tell you about every song they listened to, every article they read, every purchase they made, etc.? If that’s the future of social networking, word-of-mouth will be marginalized and I don’t see how it provides a solution to anything.
As Terry pointed out, the people with the biggest motivations to leverage F8 are marketers. That isn’t inherently bad and doesn’t mean that every application developed will abuse and exploit the platform, but let’s not forget that marketers salivate over the prospects of being able to run effective viral and word-of-mouth marketing campaigns, especially at little to no cost, so I think the potential for the abuse of F8 is significant. And as I stated, the commercialization of this stream of data about everything your friends are doing will eventually significantly decrease the usefulness of this data.
Quality search is immensely valuable because it provides a tangible solution to a serious problem: I need a specific piece of information right now and I want to be able to obtain it quickly. The “information sharing” that David envisions is not nearly as valuable. First, information that I may have no need for is being pushed to me, creating more information overload. Second, useful information may not be pushed to me at times when I need it most. Third, there is little filtering done to reduce the “noise” in the information provided. I may think that one of my friends has great taste in music and value his recommendations while I think that my other friends have no taste in music and want to avoid anything they find enjoyable. I’m sure Facebook could enable granular filtering, but at some point this gets ridiculous and defeats the true purpose: getting relevant, useful information in an effective, painless manner.
I think there’s a huge disconnect between what the average user actually wants to get out of the social networking experience and what technologists, startups and venture capitalists *think* the average user wants to get out of the social networking experience. A lot of people are content with sharing photos and posting comments. Many users aren’t using social networking beyond the most basic functionality and I doubt that the average person is looking for an all-encompassing experience that gives them the impression that they’re bathing in a sea of infinite collective wisdom 24/7.
Furthermore, it truly amazes me that for all the Web 2.0 fanatics who talk about the “wisdom of the crowd” few seem to have actually read James Surowiecki’s book in which he lists diversity and independence as a prerequisite for a smart crowd. Is a crowd of your friends truly diverse and independent? Typically, our friends have more in common than they don’t have in common, so having a crowd of friends is likely to produce a “dumb” outcome according to Surowiecki’s theory. In fact, anytime the opinions of others are known, you run into the issues of peer pressure and information cascade. I don’t discount the potential utility of information from friends but if people like David are going to continue to talk about the “wisdom of the crowd” as if it was the word of god then they should at least read the book.
And by the way, I’d rather have peanut butter than bread.
This article is spot on about Facebook’s potential, and the potential for cohort-based information filtering.
To say that this will improve portals is to scratch the surface of this issue. Whether people are sorted by schools, jobs, geography or other factors, next-gen portals will probably reinforce the isolation of each cohort from each other - tricky territory.
Wow, Drama 2.0 summed up my thoughts. Usually I disagree about 95% of the time… this being the other 5%
Most of the article’s points hit the target, although I think the author overlooks the multi-dimensional nature of social networks. The group of friends you trust for tech advice is probably not the same network you’d turn to for dating opportunities. Facebook captures an important social network but it doesn’t reflect the complex and multi-layered social networks that people build in real life.
That said, the Facebook opportunity seems too good for any startup not to leverage as a way to drive traffic and brand awareness. Over time, however, Facebook will need to come up with an effective strategy to manage growth or it may turn into an extended phone directory of web 2.0 sites.
This POV is built on two premises:
1) Search is a laborious task for users
2) Most information you receive from your social network will be useful
I disagree with both. In fact, the signal-to-noise ratio for each point is moving in the wrong direction to support these ideas.
Agree with most of what #24 Drama said above. I’ve been thinking about this space for a while. Having tried most of these services from the beginning to now and discovering the strengths and weaknesses of these systems, I ended up realizing I don’t want this info in a portal. It’s a major effort to build these networks and frankly I just don’t have the time to keep them up — ditto with my friends and others. I think the future is going to be more like RSS feeds than any kind of portal. I spend more time on Google Reader and search engines than I do the social network sites or older portals. To me, the next iteration is going to be when all of this info isn’t dependent on where it’s uploaded or networked — the info will be self-contained and can be both discoverable and broadcast. I’m probably not explaining it completely but this is what I sense is happening.
David, I am curious what makes you say Yahoo has “second-tier search”? Is it personal experience only or are you referring to any studies comparing search quality?
Mike,
Just my 2 cents, but as a long-time reader I think you should avoid having guest posts by people in or closely affiliated with the companies that you cover. This is a great article, but this just isn’t the right forum for it. We don’t really want these people’s opinions, or just not in this way. Seems more like a different forum like crunchtalk, but text-based interviews and commentary pieces from the company heads/employees.
David,
Great post. I agree with your underlying thesis. If Geni starts converting those family profiles to real active profiles, I think Geni, along with Facebook are in a good position to leverage the sharing experience. However, the sharing experience in Geni may be limited to specific content (Photos, videos, etc) whereas Facebook has more interesting facets since I’ve elected to befriend someone as opposed born into a family tree - my friends interest tend to be more aligned to my interests than my family. It’s hard to say until geni starts opening up their platform - hint, hint.
Oh yes….Thank You for Smoking was one of my favorite movies — thanks for helping make it! I’m looking forward to more in the future!
How about Orkut? Since Google owns it, will the “Share Facebook” to be replaced by “Share Orkut”?
yeah Drama, that’s what I meant …
One thing i dont see mentioned. Is time and effort. Searching for information takes very little effort or time. You can go to google and in seconds get the information you need. Theres no signing up, building a profile, spamming friends, or reall effort required.
Can the same be said for Facebook?
One reason facebook and social networking sites in general, have been mainly successful with the younger folks, is 18 year olds have an ample amount of time and effort to spend on these sites.
Does a 35 year old women with a job and 2 kids? I dont think so. The only somewhat social network that has been succesfull with people over the age of 30 is linkedin, and the reason for that is obvious. Illl put some time and effort into anything that may get me a better job and more money. But even linkedin - how often do users log in?
Join a social netowrk an build my profile and netowrk for a better movie reccomendation? I got kids to bathe!
it actually just occured to me that del.icio.us is in a much better posiiton to be the bread than facebook.
Currently everyone in my friends network via aim, just sends me IMs with cool links. If I could get a feed of just cool stuff from friends that would be really powerful, but it kinda loses some of the conversation aspect that a Digg or even IM would have.
Mike, do your readers a favor and hire Drama 2.0 as a guest writer so s/he can release some of the hot air that builds up in web 2.0 land every so often.
David - I think this is a pretty profound observation; it “feels” true. This is pretty much how information comes to me in meatspace too; from my friends and associates, tuned by their knowledge of me.
The interesting question lies in the tuning. In meatspace the referrers of information are all thinking humans, using observation to do the tuning. In cyperspace they can be thinking humans, but they can also be thinking software, using observation to do the tuning. Maybe some kind of digg-like thumbs up/down interface will evolve in order to tune the inbound data?
First, thanks to David Sacks for a great article. Great food for thought.
Drama 2.0 is right that Facebook is too ‘flat’ at the moment. While you have large (geographically-based) networks you really do and will need more, especially as your list of friends increases. What a Facebook user needs is the ability to create sub-groups of their friends. Adding this feature will be critical in allowing the user to ‘tune’ their preferences to determine what information should be pushed out to them and by whom.
Sub-groups will also enable a solution another issue Drama brings up. Let’s say you don’t always want your friends’ advice about what movies to see. Judging from the friends I have who use Flixster I know we don’t often see eye to eye. Maybe I trust the NYT a little more, too. But if I do why don’t I just add the NYT Film Reviews as a friend and appropriately categorise them in my ‘Reviewers’ sub-group? Well because I can’t at the moment but something tells me that it’s only a matter of time. This wouldn’t be very difficult for someone at the NYT to set up and with the size and growth of Facebook the incentive will only get stronger.
Finally, I think the concerns of marketing abuse are overblown. As it currently stands the F8 platform requires users to add applications. Applications that do nothing more than push a product are not going to be popular unless they have something else to them. This is one of the strengths of pushing out information of what applications your friends have added. Both apps I recently added, Flixster’s Movies and the Trips applications, were brought to my attention when friends embedded them. I took a look, found they interested me, and installed them. If they become marketing filled I’ll just remove them.
Duncan, excellent analysis..
..sorry, meant David
great comment role.. I disagree with the hypothesis in general for all reasons already listed.. My 2 cents
Drama - “he lists diversity and independence as a prerequisite for a smart crowd”.. yep, but while true the world is 95% sheep and “general” socnets are still domains (real users!) of the 18-25 set who probably dont have a clue who Surowiecki is yet and buy Coke because Britney does.. Dont underestimate the power of the crowd, grapevine, herd in this set.
David - I think you’ve got some concepts right but your conclusion backward. I want my bread to be my start/home page (iGoogle, NetVibes, MyYahoo etc) not my login protected limited social net and my peanut butter to be Geni/Facebook/Flixster/Dogster/Linkein widgets keeping me updated on my chosen social communities suggestions and activities.
Michael #41 you are right about sub groups, but all media history shows us that this has another name, “verticals” ;-).. Flixster is already that and in the end will prove to offer you more there, so question is where is best place for my little window of top interests from it as Alexa #29 suggests.
For 18-25 crowd, Facebook could steal this home turf for sure. Beyond that, dont think so solely based on the idea of Ned #36’s kids needing to be bathed.
Clearly this guy just has a big hard on for Facebook. What exactly is the innovation they have brought to the table? Their so-called platform is nothing but red tape for widgets. What does this platform accomplish that unrestricted access for widgets couldn’t. Crediting Facebook with this is just ignorant. MySpace made this stuff mainstream, but they didn’t invent it either. Tell me how Facebook is any more of a platform than MySpace is. Hmmm, because they told you?
Re: #4 “When I search for information, I all too often see data that is irrelevant. Yet as a result of this exercise, I am exposed to new ideas, resources and opinions. There is a danger in surrounding yourself with the voices you know or with whom you share common interests.”
I agree very much with this. Many of my friends can’t even spell ‘Web 2.0′. I think the the answer to ’share’ as a successor to ’search’ will rely on a psychographic friendship layer beneath the firendship/direct relationship layer. The psychographic layer will feed you with this information and people will need to cultivate this nature in terms of trust. This psychographic layer of discovery underpins my own startup.
I’ve read that statistically more people today trust the word of the people close to them versus the media, but I think social networking is kind of overrated. It was a starting point where a mass amount of users cut their teeth on using the web for communications/entertainment, but I believe the huge growth had more to do with a natural evolution in how people use the internet and improvement in internet technology and accessibility than anything any of these sites did/are doing.
What is more interesting to me is how Google, MySpace, etc. plan to fit into the big picture when/if everything continues to migrate to IP. If all of the networks as we know it converge to one, everybody will be bumped onto a single channel together. I’m curious to know what these type of sites will be doing then, with competitors like traditional media, traditional tv networks, etc. are right next to them distracting their users.
Drama 2.0: “A lot of people are content with sharing photos and posting comments. Many users aren’t using social networking beyond the most basic functionality” - that, plus music makes 95% of the ’social networking’ traffic.
Everything else falls under “… startups and venture capitalists *think* the average user wants to get ”
Excellent analysis by D2.0, please get own blog going.
People are all assuming the push comes only from “friends” or three degrees away from your friends. The point is the whole Web 2.0 synthesis of ALL opinions (Wikipedia, Digg, Amazon reviews etc etc) can be available through your own personal portal.
Wow. Pretty interesting stuff. Both the article & the comments.
David is my former boss and a friend, and a pretty brilliant guy (note: i’m not sucking up, he’s my *ex*-boss). That said i do tend to agree with Drama (& others) that Surowiecki’s work is being slightly misinterpreted here… the wisdom of crowds is based on diverse & independent, non-sequential views. In most social networks — and even many prediction markets like BluBet — the opinions of others are plainly & openly expressed & far too dependent to work well as a good crowdsourcing method. You’re just as likely to get one highly popular individual influencing the rest of the social network with a dumb or subjective assessment.
And while i agree Facebook is a hugely important property that’s growing like wildfire, i don’t think the “social graph” will always outweigh the value of targeted search, and i don’t believe that only one social network will prevail… i’m much more of a believer in the multiplicity of social networks based on different social contexts (sports, business, friends, family, etc). Thus while Facebook might become the default infrastructure for my “social” social network, it might not be my “business” social network (LinkedIn), or my “family” social network (Geni), or my “photos” social network (Flickr), or my “porn” social network… er, ahem… ok, let’s just stop right there. You get my point. I won’t always share all of my info in the same social network, and there will likely be a “long tail of social networks” that follow the more popular ones like MySpace & Facebook & LinkedIn. It’s possible that Spock.com might even provide a useful way to track & manage all the different social networks people participate in.
However, i do think there is something in what David points out about social networks providing a trust-based way to communicate higher-quality information. And i do think there is a way to apply prediction markets to social networks that can create quite a bit of value. In fact, I wrote an article last month for O’Reilly’s Release 2.0 newsletter on this topic called “Channeling Crowds” (excerpt available on my blog).
Regardless of the speculation on social graphs & prediction markets, i bet David is going to be creating some very interesting & valuable communities with Geni.com. They might even end up justifying the $100M valuation
Michael Camilleri: I do not doubt that features which enable you to “tune” on a more granular level can be created and will be released, but the question becomes one of convenience and ease. Is the average user going to go through all the trouble to configure all of the groups that are possible just to filter information which may or not be useful in the first place? Does this really solve any problems or does it just create new ones? Do average users want to receive a steady stream of information about what their friends are reading, listening to, buying, etc. or is the true power of word-of-mouth derived from the fact that it takes a conscious effort on the part of an individual to go out of his or her way to make a recommendation to a friend in a sincere, deliberate manner?
It seems to me that a lot of people are getting excited about reinventing the wheel. I already get recommendations from my friends when they think they have something worth recommending, and I have no problem asking a specific friend for his or her thoughts when I want it. Again, the pushing of information on a constant basis seems to create more problems than it solves, regardless of how granular a level of control is provided.
A few thoughts:
1. A lot of this debate boils down to how people are really leveraging social networks. It seems to me that the average users are making use of the most basic functionality while the technologists, startups and venture capitalists are hot on functionality whose value and appeal to average end users is currently questionable.
2. Jonathan Mendez may have pointed out the largest flaw in David Sacks’ argument. David’s entire “theory” is predicated on the notion that search is ineffective when all of the data that is available seems to indicate that it’s never been easier and more efficient to find desired information, no matter how specialized or obscure. David is arguing that social networks like Facebook (where people post drunken photos from frat parties, leave unimportant messages on their friends’ “walls” and “poke” each other) are more likey to generate relevant information than a search engine like Google. While I don’t doubt that useful information can be derived from social networks, in an “information overload” society where we are overwhelmed with data and have limited time, I think search engines like Google will remain the primary vehicles by which people will locate specific important information at the exact moment it’s needed, and these services solve the biggest pain for individuals. The addition of “community” influence to the organization and retrieval of information is probably viable, however limiting a “community” to your friends as contemplated here will not be very effective and will probably limit the utility of certain types of crucial information that people often need.
3. When we talk about “social” networking, I think it’s worth considering the cultural and sociological implications of the functionality that so many people believe will bring us together and help us interact. If I have a friend who is into independent films, for instance, I get more enjoyment out of giving him a call or sending him an email and asking if there are any movies that he thinks I should see than I will out of logging into my Facebook account and being able to see a computer-generated list of every movie he’s bought recently. What’s “social” about that? A 2006 National Science Foundation study found that Americans are more socially isolated than ever. In fact, a Duke sociologist who participated in the study said “We’re not saying people are completely isolated. They may have 600 friends on Facebook.com and e-mail 25 people a day, but they are not discussing matters that are personally important.” People like David Sacks have a vision that Facebook and its F8 platform are going to add great value to our daily lives through these “social graphs,” but I think there’s enough evidence that social networking really isn’t increasing the frequency or value of our social interactions on a meaningful level.
Personally, I believe that most of the social networking functionality, and the F8 concept, will add additional noise to the information we are exposed to. I also believe society risks a considerable amount when a) interactions with our “friends” are marginalized to streams of data generated by an application and b) we come to neglect the information provided by people outside of our “network.” How many problems in the world today are caused by the inability to consider the thoughts, opinions and information provided by people who are different than ourselves? How much progress is impeded when we shut ourselves out of the possibilites and opportunities that most often come from interacting with strangers?
One of the things that has always excited me about the Internet, and services like message boards, chat rooms and now social networks, is that they allow people all over the world, from various backgrounds and walks of life, to connect and share a wide range of information on important topics from various perspectives. Thus far, I’ve been a bit disappointed in the social networking found on services like MySpace and Facebook, because for all the talk about how beneficial they are, I think the ultimate potential from a cultural standpoint has not been realized, even if the startups and financiers are trying to sell us on how it has. Instead, the belief that information coming from your “network” is superior and more relevant than information obtained elsewhere is being promoted even though it seems to defeat the true utility of the Internet. This thinking only reinforces conformity and groupthink through informational cascade. I’m not naive or unrealistic, and don’t expect that the Internet is a panacea for all the world’s ills, but I find it somewhat amusing that so many of the people who are drinking this Web 2.0 kool aid and talking about all the benefits it’s providing by bringing us together are missing the fact that it’s actually doing just the opposite in many cases.
Doug: Even services like Wikipedia and Digg have found themselves victims of mob mentality, virtual “special interest groups” and censorship. That’s not saying that there’s no value being provided, but I think it’s fair to argue that most of these Web 2.0 services are just as vulnerable to manipulation as traditional media. It simply comes down to your preference of who you prefer being manipulated by. Thinking that you avoid manipulation and hidden agendas simply because your information is being provided by a “community” is not sensible.
Social media and traditional media are both equally useless if individuals are unable to exercise crticial thinking and common sense. If I trust something implicitly because a thousand Diggers said it, is it really any better than trusting something implicity because two professional (paid) journalists said it?
Drama 2.0: I think that David talks about future, something which will happen in two or three years. And you talk about current state of social networks. IMHO you both have right.
What David predicts, isn’t that hard to do. For example in my social network I already implemented different types of links to people. You can link someone as “good friend” and as “acquaintance”. Of course this determines someone’s influence of your ranking of news, etc. I was also thinking about tagging the connection. If your friend has different taste of music then your, you should be able to tag the link to this friend with “-music”
People who you don’t know also have influence on your ranking, but your “good friend” vote is worth 50 times more than a vote from unknown person.
I would argue about why your friend’s recommendation is so effective. Your friend was thinking what you can like, I agree. But more important is that you simply TRUST him, he is your friend for some reason. The form of talking over the phone is also more vivid than reading something in newspaper or portal.
People are quite busy nowadays. No one will call and interrupt you at work just to say that some article or a book is worth reading. But if you would have three hours to talk to your friend I am almost sure that he would mention something about that article or a book. And here social networks came with help if you don’t have time for long talks with all your friends.
Think about what Google did with links between web pages. Many VCs didn’t saw any potential there. In my opinion we are just starting discovering how social networks can be used.
Digg already tells you what your friends are digging. You just need to know where to look for this. Try again.
Well put, Drama.
excellent article…but “The social graph will not replace search” - ???? these are the same thing already…the underlying sna principles that make all of google’s search algorithm possible are the very same ones touted by facebook as the ‘new new thing’ when in fact they date back to before ww1 when sociologists were building these sociograms on paper! has anybody bothered to look at sna for these topics? check out insna.org for more if you want an academic spin….
Yeah Drama, it’s nice to see you posting.
> In reality, Facebook’s social graph could have provided the bread to connect Yahoo’s far-flung empire.
Yahoo’s already got Yahoo Messenger, which means it already knows which users are friends and which ones aren’t. One would imagine it’d be trivial for them to put together a “social networking” page that shows what those friends are doing across all Yahoo’s properties.
Quoted: I’m waiting for the Digg application to not only display articles I’ve digged on my profile, but also to aggregate all the articles dugg by my friends.
Have you tried BlueDot.us for this (http://bluedot.us)?
I attended the f8 launch event and am still blown away by the opportunity Facebook is sharing with application developers (yes, and marketers) to reach into their network and insert an ideavirus that can spread, like ilike’s music app, to 1 million users in just one week.
I blogged about the implications of Facebook platform just hours after the launch, at http://www.paulallen.net, and days before it became evident that some Facebook apps will get millions of users very quickly.
I’d link to the Facebook Alexa chart, but I’m posting from a blackberry in the Philadelphia airport. But I predict Facebook, by opening up its platform, will jump quickly from 100,000 new users per day to double or triple that. It already seems to have had a very nice spike.
But I don’t see the social graph, however much I applaud it, becoming more important than search–ever. It will become a primary layer of the web experience, but not the biggest moneymaker. And potentially if users feel exploited enough because these are their relationships after all, an open source social network will emerge, which, like Wikipedia, will become a public good that all can benefit from without fear of someone else profiting. Om Malik has discussed the potential for feeling exploited.
Google exploits all the anchor text from all the links created by all the webmasters, but it doesn’t feel like exploitation because it’s all aggregated and not personal.
While Google will pass Microsoft in market cap in the next 2-3 years ($300 billion plus), Facebook will likely IPO and be worth tens of billions–an order of magnitude less than search which is far more monetizeable, but still an amazing accomplishment for a very young company with a very young CEO.
I agree with earlier comments that there will be a long tail of social networks emerging. I use Facebook everyday, and more and more often. But I use LinkedIn 2-3 times per week, and get far more professional value from it than I do from Facebook.
There is a list of social networking sites on Wikipedia (again sorry I can’t link to it right now, you’ll just have to SEARCH for it) that shows about 60-80 social networks, and you’ll be amazed to see how many already have a million or more users.
I started MyFamily.com in 1998. We raised tens of millions in capital for this idea. Had MyFamily.com remained free (it went to a paid subscription service in August 2002, if you can believe it, when it had at one time been growing by 20-30,000 users per day) it would likely have 50 million users today.
But the “wisdom of the crowd” post bubble would no longer support a free site feeding members to a paid service (Ancestry.com) and so MyFamily.com nearly died.
So there is proven opportunity in the space that Geni, FamilyLink.com and other family social networking sites are playing in, even if there is more opportunity in the non-family social networks.
By the way, I really disliked the book Wisdom of Crowds. I don’t agree with the theory, even if you have a smart diverse group of people guessing how many gumballs there are in the jar. Sometimes ggregate guesses are lucky, but most often they are wrong.
I would ten times rather have a single expert with the right tool, that a crowd guessing anything, a Warren Buffett with a model and a formula, that a million day traders wildly affecting swings in stock prices as their wisdom changes.
For example, I read about a hedge fund that had exclusive access to audience measurement data a few years back (was it Comscore, or something else?) that could use the tool to accurately predict growth rates of web sites and whether publicly traded companies were going to hit their revenue forecasts (based on traffic and conversions that are measured in real time)–give me an expert analyst with that data over all the guesses of the crowd, any day.
PA - thanks for posting on MyFamily background - I know lots of ex-MF people too and am always amazed by its path (knowing of course that it’s easier to see / say anything in hindsight). And I’m impressed you typed that long, long post on a blackberry at 5:35am…
This is an amazing enlightening string of posts. Thanks TechCunch.
Oh yeah, and are you THE Paul Allen?
So Google, with about $3.5 billion in net income over the last 12 months and a single dominant revenue stream, will surpass Microsoft, with nearly $14 billion in net income over the past 12 months and a diverse revenue stream, in market cap in the next 2-3 years? And Facebook, with $100-$150 million in projected annual revenues (and unknown profits) in a highly-competitive space, will have a market cap in the tens of billions. I would certainly love to hear Paul Allen’s expert analysis from which these bold predictions have been made. Anything is possible, but I always question anybody who makes big claims like this. In three years if social networking is still a hot topic, we’re in trouble, and people like Paul Allen should remember that the public markets are normally a bit more rational than the Silicon Valley fanboys, even if they do suffer from bubbles too.
@Joe, he’s Paul Allen (the lesser) - his words, not mine.
One of the most thought-provoking articles I’ve read thanks David.
Thanks for the post, David. Very good insight. I agree with Adrian about how thought-provoking it is.
I agree that Facebook is doing a great thing with it’s API. I have my FB friends notes as an RSS feed. I love the simplicity (white background/AJAX) yet complexity of the interface (even I get confused as to where I am and where I am going and my day job is building UIs in Flash!). MySpace never did it for me, because it lacked the maturity of the News Feed of Facebook (I didn’t want to check everyone’s page for new information) and lack of consistency (people would add awful background images and move their interface around.
I agree that there will always be a need for expert information from one’s subculture, but that will not be the majority of people–who the marketers want. Marketers want formula and Facebook can provide hubs of similar people.
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