I was thinking about this subject tonight, that there is no way such closed systems as Twitter and Facebook can survive the force of the open Internet in the coming years with the price of data, storage, and bandwidth all marching toward near zero cost, much less be an Eco System or “Platform.”
As these communication and computation costs lower each
year, it will drive so much innovation, the walls will be torn down.
See, what is exactly the value proposition of a closed network such as Twitter or Facebook?
A) The Network Effect.
The Network Effect, or “Metcalfe’s Law” says that the value of a network equals the number of users it has squared. Obviously, the more users the more exponentially the value of said network increases. Facebook has 400million users. Twitter around 50million. You might think Facebooks network effect is tremendously greater than Twitters, but Facebook is a much more closed network. On average a typical user may have 100 “friends” or network connections. On Twitter you can connect to virtually anyone on the network simply by “following” them. It doesn’t have to be a reciprocal agreement. Everyone on the network is accessible to you. This means Twitter’s more open Network is of far greater value than Facebook’s larger but more closed Network. That’s why Facebook is in a tremendous frenzy to open their network more through “Pages” “Facebook Connect” and changing the default privacy settings.
So if Twitter’s vastly smaller, but vastly more open network has more Network Effect value what does that mean? The more open a “network” is, the more valuable that it is. This means there is an incentive to build a completely open network. So one will be built, or shall we say, not built, but merely “facilitated” because the act of building one implies some degree of closed. The completely open network already exists. It’s called the Internet.
We all know how many users and how much traffic Facebook has every month. They say its like an upward hockey stick. But how much value are Twitter and Facebook giving off each month?
And how much traffic and how many users does Internet, Inc. have?
Basically you trade your identity and your content for their network effect. Also they throw in their bandwidth, storage, and programming. As of now this has value, plenty of it and that’s why you see the spike in these “networks’” traffic.
But now the process of them selling you down the river begins. They figure they’re giving you network effect, bandwidth, and storage for free in exchange for them selling your content. Sounds fine, right?
But the problem is innovation will drill a hole into any walled garden. Quickly, innovation will fork around sand boxed networks and find ways to connect people without them giving up their identity or their content. Each day, storage and bandwidth prices drop. They are heading rapidly to zero. So that part of the economic proposition is losing weight very quickly as well.
Twitter isn’t the network. Facebook isn’t the network. The network is the network.
Even the mighty Apple, as much as I am blown away by this iPad I’m typing on, can’t survive this onslaught of the open web. For instance, tonight I was watching a TV show on the wonderful ABC app and it occurred to me that I was being forced to watch the commercial because I couldn’t minimize the browser. it felt Pavlovian to me, being trained by the nature of the device, forcing me to behave in a way I didn’t want or like.
I don’t think the user will put up with theses strategies for long, and I’m sure the open web will come to the rescue.
It also occurred to me tonight that Gmail keeps 5 years and 25,000 of my emails forever available and searchable and yet Twitter only let’s me go back and see a few weeks of my Tweets, with a substandard if not plain archaic search system.
That’s just plain lack of innovation. And Facebook is hardly better.
Technology, driven by innovation as it is, is a poor place for a lock in business model. Technology doesn’t want to be trapped, and will eventually fork around it’s captors.
Sent from my iPad