SAI contributor Nate Westheimer is the founder of BricaBox, a stealth-phase NYC start-up. He writes the blog Innonate. Here, he argues that Facebook as we know it is not just not worth $15 billion but is soon to be history.
Steve Balmer is right. Facebook is a fad.
Fad implies a temporariness. And while I think Facebook is a great social networking site, which I will use for the time-being, I think there’s an inherent temporariness in something I’ve not invested anything of real value in over the course of three and a half years.
Sure I’ve listed a few of my favourite shows, and I’ve uploaded a few hundred photos (I still have copies of them locally, of course), but I haven’t sunk anything of real value into Facebook — at least nothing yet of real value to me.
Let’s say Facebook vanishes into thin air tomorrow. How quickly do you think our inherent social graphs would take to reconstitute themselves somewhere else on the Internet?
It’s like that problem James Surowiecki talks about in The Wisdom of Crowds — the one about the students who come to New York on a specific day, but neither have knowledge of where or when to meet, nor how to communicate to each other. In that case, they, nearly without fail, end up meeting by the information booth of Grand Central station, at high noon.
If Facebook did vanish, no one would cry and hang their head. If the Grand Central information booth went up in flames, people would just head to Penn Station.
But Facebook won’t go up in flames. Instead, it will be around tomorrow, it will grow and change for a while, and I still won’t invest anything of real value into it. Even with these new Facebook apps popping up, I’m not doing anything inherently “Facebooky” on the platform. If I really wanted to play poker I’d find another site on the Internet to do that. Yahoo Games still has a good userbase, and they don’t have to build out to anyone’s platform standards but those of the Interwebs itself.
On a large scale, Facebook and a few other top dogs may be the only ones who think it’s in their best interest to keep information closed. Everywhere else you turn, however, you’ll see people opening up. That means that the collective, open social graph will increase in value indefinitely, because it will be truly portable, while the little we’re actually investing in Facebook diminishes in value. Get one thing straight: tomorrow’s great platforms will be open. The next Facebook, Google, Bebo, whoever — they’ll all be open.
If Facebook isn’t a fad, their closed graph is a fad. And without the closed graph, they’re going to have to look at other strategies to maintain dominance, like building their own ad network. So I’ll say it again, Facebook (as we know it) is a fad.
For other good post on the issue, read:
Darren Herman: Social Networks a Fad again
Jeremy Wagstaff: Web 2.0 Ain’t About the Technology
Adena DeMonte: Ballmer Thinks Facebook At Risk For Being A Fad, We Think Not
Marc Andreessen: On Steve Ballmer on social networks
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