Facebook Is Kinda OK but Largely Overrated
I really think the funniest thing about Bubble 2.0 is the Facebook hype. I just don’t get it. People are saying it’s the new Google. Microsoft is allegedly going to invest at a $10 billion valuation. I can’t wait until that one bursts and Zuckerberg is left with no choice but to accept a down round because the rest of the world realizes what I did about 3 months ago, which is that Facebook is kinda ok but largely overrated.
Facebook is most certainly not Google. Search is the cornerstone of the internet. I use Google a minimum of ten times a day, and so does everyone. It’s name has become a verb, like Kleenex, though unlike Kleenex Google managed to do it without advertising. There is very little I would ever want to know that I can’t find in seconds on Google. It’s the most life changing technology since the invention of the computer itself.
Not so for social networking. It’s kinda cool to have a place where you can see all of your friends’ contact info, and maybe flirt with some girl (I’m still not sure, but I think that’s what the poke feature is for) and express yourself in that lame “look at what bands and TV shows I like” way, or maybe list a bunch of books you never read to make yourself look smarter than you are (either that or every Target cashier really did read Finnegan’s Wake) but that’s about as far as it goes. It’s nothing that’s going to change your life. It’s not going to bankrupt newspapers and encyclopedias. It might save you from having to call one friend to get another friend’s phone number once in a blue moon, and that’s about it. There’s no killer application for social networks, just a few sorta ok ones and a bunch of annoyance.
And even if there were, MySpace would beat them to it. Facebook will always be second best in terms of monetization and traffic. I know, I’ve seen it happen in online poker. Party Poker always had worse software than PokerStars. Emails to Stars support were always answered in a couple hours, Party Poker took weeks and even then it was usually some Indian guy who just rephrased your question back at you. They were inferior in every way except one, which was that they had 7 or 8 times as many customers.
In poker, like in social networking, people wanted to go where other people already were, and had it not been for the UIGEA (which threw a legal wrench into the industry’s gears) they’d still have the same exact lead over their rivals they had two years ago. The value wasn’t in the software, or the support, or the people running the show. It was in the sheer size of the community.
It was less like Google (whose customers would leave at the drop of a hat if someone built a significantly better mousetrap) and more like eBay. Party Poker jumped out to an early user base lead by marketing more effectively, and the victory in that opening battle won the entire war. The game ended the second their first World Poker Tour advertisement aired.
So it goes with social networking. MySpace will always have more customers than Facebook because MySpace has more customers than Facebook. You don’t sign up at the site that has the nicest home page design or the fastest load times. You sign up at the site that your friends tell you they signed up at.
Also contributing to the hype is the Facebook platform. Platform is the Bubble 2.0 buzz word, which everyone talks about but of whose existence Joe Average is now and ever shall be blissfully ignorant. Facebook’s platform is a much overhyped feature of a much overhyped site, and little more.
It’s also yet another way in which MySpace is superior. They have always allowed you to stick JavaScript in your profile page, so it has always had a platform. And theirs is far easier to develop for than Facebook’s and far less subject to the seemingly capricious and arbitrary restriction enforcement. Photobucket made a fortune off of it, it’s yet to be seen if such a thing could happen on Facebook.
The real test in evaluating something hyped so much is how it’s been integrated into our lives. I’ve not met a single person who couldn’t live without Facebook or any application built on its platform. You meet a few junkies who log into it 5 or 10 times a day, but that’s less often than your average guy uses Google search alone. Throw in Gmail, Maps, etc., and it isn’t even close. Your average person visits Google way more than almost anyone visits Facebook.
If I’m ever somewhere where I can’t access Google, I get a little antsy. I subscribe to a $40 a month broadband plan on my phone just to prevent that from ever happening. And I know a hell of a lot of people in every age group who do the same. But Facebook? “Oh no, I can’t give people digital fish for their aquarium, turn them into a vampire, or update the friend status to let them know I’m totally wasted. Whatever shall I do?”
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October 6, 2007 at 2:21 am
MySpace doesn't allow JavaScript.
October 6, 2007 at 3:13 am
I prefer thinking in terms of what I benefit from using a service. I use Facebook because 1) most of my friends are there and 2) it is easy to use (it does most of the work for me and I don't have to 'type' a lot to get in touch with my friends).
I am certainly not using it as much as google (not by far) but it would not be fair to compare those two things.
What I find impressive is how people like to promote what they use (in your case, google and myspace) and then try to label as “under-rated” other services. I know, my point of view (the end-user) is a very limited one and there are a lot of corporate and financial interests behind the scene. But at least I get to enjoy the services and not have to worry about anything.
Keep posting your thoughts.
October 6, 2007 at 11:19 am
Matt,
I often find myself wrapped up in the hype of the day: “Vista Sucks!”, “Facebook is the shiznet!”, and then I read your insightful, thought-provoking posts. Thank you for the divergent thinking, the your willingness to stick your neck out.
I'm especially keen on this post because I do think people in the valley have lost some perspective when it comes to Facebook. Sure, everyone around here uses it. And lots of other people do to. But I don't see anything unique to facebook that couldn't be duplicated elsewhere – social networking platforms are inherently fickle, as they are only cool when lots of people are there, and lame if they're not. This builds brand loyalty, but the crowd can turn when something better/newer comes along. Just ask friendster and now myspace.
I know I'm biased when I say this, but I'm honestly just starting to get it: email is the only truly global, fully interconnected networking platform on the internet. Man, I'm excited to be working at Xobni.
October 6, 2007 at 11:57 am
GREAT article! It's nice to hear from someone who can see through all the hype. I've always found it strange that people with little to no financial literacy or business sense think they can make predictions, ignoring “unimportant” data like revenue and profitability.
October 6, 2007 at 12:30 pm
is it flash or something? How do people have all of those photo slideshows and such.
October 6, 2007 at 12:32 pm
You are exactly wrong there. I hate myspace and dont use it at all. I use facebook far more because most of my friends are there and I can see their actual contact information. I like facebook about 100 times better than myspace. I just realize I am in the minority there.
October 6, 2007 at 12:35 pm
Xobni is a pretty sweet idea. Email is a platform, one which a lot of stuff is built on and a lot more should be. And it has achieved such ubiquity that Facebook fanboys always say “what if Facebook becomes as popular as email”.
October 6, 2007 at 12:38 pm
I believe they're all flash.
October 6, 2007 at 1:48 pm
You are wrong in so many ways.
First of all, Kleenex is not a verb. What i think youre trying to say is that Kleenex has become a common term for “tissue” which is a very bad thing for their trademark, as they could lose it.
Second, MySpace allowing arbitrary JavaScript does NOTmake it a platform, just incredibly annoying (CSS too). You need ways to access your so called social graph to make it useful.
Certainly many (most?) of the FB apps out there are trash… But that will improve as devs figure out new and interesting things to do with it.
That said, i dont think comparing google to fb is a good comparison. Google organizes the worlds information, while facebook organizes the worlds relationships.
October 6, 2007 at 2:52 pm
You're right, Kleenex has become a generic noun, not a verb, but the idea was more that both have turned their brand name into a generic term.
You find myspace annoying due to the customization. So do I. We're in the minority there though.
Every dev in the world is thinking about how to make a Facebook app that's not trash, none have yet done it. What makes you think that will change?
And my base contention is that information is far greater a market than relationships, which is why Facebook is overhyped.
October 6, 2007 at 2:56 pm
Mea Culpa. though it's still a far better platform since it doesn't have the size restraints Facebook does.
October 6, 2007 at 7:05 pm
I think you're wrong on two points: 1. That a monopoly over the online social interactions between people isn't as much of a game changer as search, and 2. That MySpace is undefeatable simply because people want to go where other people are.
Google wants to organize the world's information and make universally accessible and useful. They've done a pretty good job of that, with the exception of your social information and connections. Facebook has a virtual monopoly on it in US. I would argue that controlling that kind of social information has just as much long term value as Google does.
The argument that people want to go where other people are, and therefore MySpace will always be the biggest social network out there, is empirically false. If that were the case, everybody would still be on Friendster. There is room for innovation and better execution in this space, and if you look at Facebook's momentum, they are catching up and catching up fast.
October 6, 2007 at 7:07 pm
Also, as far your stats go, although it may be true that the average person uses Google more than they use Facebook – the people who are actually ON Facebook use it, very, very frequently.
Something like 85% of their userbase logins to Facebook everyday, and their average visit time is almost 30 minutes.
October 6, 2007 at 8:38 pm
I agree. FB is overrated. I realized it was worthless when I was in college. It was fun the first two months when you get in touch again with lost friends from high school but I realized it's useless in itself.
But I guess bloggers and media just need something to talk about. Just before FB, it was twitter. There were the anti-twitter and the pro-twitter. before twitter, there was joost etc. The FB hype will die the day when another startup launches something somehow “interesting”, then half bloggers will all write it's the big new thing, with the rest claiming it's stupid.
October 7, 2007 at 11:40 am
I don't understand how you can argue that they have a monopoly when they're in a distant second place. And even if they were, I would definitely disagree with your assertion that it's worth anywhere near what Google is.
October 7, 2007 at 2:59 pm
Wow you really dont get it eh?
October 7, 2007 at 4:53 pm
Empirical evidence (i.e. their utter lack of profitability and decreasing use by average users) would seem to indicate that it isn't me who is failing to get it.
October 7, 2007 at 5:06 pm
Two things: a good chunk of MySpace's 190 million users are largely fake profiles with no real identity information behind them – profiles for companies, bands, and spammers. I'd bet bottom dollar that Facebook will over take them well within two years. The trend is pretty clear, even not accounting for MySpace's blatant page view inflation through poor usability:
http://www.alexa.com/data/details/traffic_detai…
I never asserted that they are worth more than Google now, but properly executing on that kind of control, in the long term, could be enough to do it. I'm saying it's plausible.
October 7, 2007 at 5:08 pm
What is the empirical evidence that their use is decreasing? To the contrary:
http://www.alexa.com/data/details/traffic_detai…
October 8, 2007 at 7:14 am
The whole “_______ Is Kinda OK but Largely Overrated” pretty much sums up my feelings for nearly every web start up.
October 8, 2007 at 5:55 pm
The main difference between myspace and facebook in my opinion is that Myspace is used as a way to expess yourself and you're personality, whereas Facebook is used for its utility of providing information about what is happening with you're friends. I use both a fair amount, and think both have their own qualities and downsides, however I think that Facebook will be more valuable in the long run.
I do have to say that as a daily (often multiple times) user of Facebook, I do not click on their advertisements. I think that in the long-run revenue will have to come from other sources or forms of advertising.
October 8, 2007 at 5:58 pm
Got any good ideas as to how they might capitalize?
October 12, 2007 at 7:29 pm
i really cant believe u would even write about that…i can see this post mattering to high school and college kids…and thats it…get back to writing about poker please…much more productive…
June 10, 2009 at 1:49 pm
If you are tired of myspace but want a way to connect with artists and musicians then you should check out http://www.putiton.com
and by real world I don't mean the tv show…
If you are tired of myspace all together than you should probably leave your bedroom and go interact with the real world