As Facebook gathers in it’s 7 billionth member – a few things are worth taking stock of and reflecting on (before you shell out on shares).
Just what is it about Facebook that makes it so great? Or not. Is it the next Google or is it the next MySpace? Or is it unique? Somehow I doubt it.
Facebook is a social utility. Nothing more. It enables people in real world social networks, most of which predate Facebook itself, to reconnect and maintain their ‘friend’ships. That’s all it does.
(Oh and it has an annoying wall ‘stream’ that prevents interaction between fans or friends – because recency (not relevancy) is the thing).
The idea of posting information on walls for other people in your network to see is nothing new.
So what has Facebook got exactly? It’s certainly got momentum. It’s certainly got a core base of ‘superfans’ (1% of users who live/breath Facebook) but is it viable and is it sustainable or is it just a bubble?
Here at the social network company we reckon it’s a Turkey. And here’s just 5 reasons why;
First, imagine a field full of Turkeys. (I know it’s hard but try..) “The future’s bright- the future’s rosy” they gobble to each other. “But what about the pig that got taken away?” Some say. “It’s different for us” says the Chief Stag. “And what about the Sheep?” others say. “We are not sheep” says Chief Gobbler. And he’s right. Turkeys are not sheep or pigs.
And then Christmas comes.
A Turkey born on the 26th December, on the 24th of December the following year – could be forgiven for thinking that life was pretty good and the future is rosy. The only difference with Facebook is that no-one knows what day Christmas will be.
So here are our 5 reasons or tell tale signs that Facebook is heading for a side order of cranberry sauce.
1. Goldman Sachs are involved. “Hey let’s value this at $10Bn, no $50bn …no wait…$100bn”. Now I’m not suggesting that Goldman Sachs always ramp and dump. It’s just that they sometimes do.. And the trick they seem to teach with ‘The Greater Fool’ is to not be holding the parcel when the music stops…. As my Gran used to say “you can tell a person’s character from the company they keep”, Amen.
2. MySpace. Enough said really. Victim of the Rupert Murdoch Anti-Midas touch. But lets not forget the others. Friendster (RIP), Friends Re-united (old value £175M, new value £20M), Bebo (old value £417M, new value £40M), MySpace (old value $850M, new value $100M).
Now I’m not Alan Sugar, but it seems the best way to make 10′s of Millions with online social networks is to start with 100′s of Millions…. Of course Facebook is different. Probably.
3. Facebook is a MeMe. As a narcissistic exercise in solipsism, Facebook is unsurpassed. But hey ho – we live in an attention economy based on self publicity and funded by advertising. But we also live on a hedonistic treadmill powered by the juice of the NEW.
Online Social Network forums are like bars or nightclubs – and as such they are prey to fashions and trends. Sure, there’s a metcalfe law thing going on, with a growing inertia, but they are still ‘bars’. First the exclusive-cool people go there, then the chavs arrive… and the cool people leave. And then eventually, the chavs leave. It’s not a new sociological phenomena.
There’s also not just a bit of the el-farol bar problem going on here. There will be a cooler site soon than Facebook. Much cooler. In this year’s colour too. And Facebook will one day look like your Dad’s favourite (shut) Music Hall where he used to do the twist. Again and again.
4. Danah Boyd said so. She of the website Apophenia is the guru of all things social. In a recent Bloomberg article, Boyd said “the thing about user adoption and user departure is that it’s not a steady flow – Think of it as if you’re knitting a beautiful scarf, and you’re knitting and knitting and you get a bigger and bigger scarf. Then someone pulls a loose thread at the bottom. And it all unravels”. Wise words. For some reason I can just imagine Danah knitting. Not scarves… but hats. Facebook’s Beacon project was a loose thread. There will be more.
5. Following on from Danah Boyd comes Duncan Watts, network scientist at Yahoo research. His latest book on Everything is Obvious: How commons sense fails takes a good pop at predicting the future – or not. Facebook’s success was all down to Zuckerberg .. or was it luck. Roll the dice 100 times and Facebook may only come on top once. So it’s not special after all…And if it’s not special it’s not invincible. It may however, be lucky. And keep being lucky for a while. It’s just unlikely to be lucky for forever. Not impossible mind. Just unlikely.
Completing our trio of doomsayers is Paul Ormerod. His great book ‘Why Most Things Fail” rather soberly points out that 99.9% of species that have ever existed are now extinct. And then goes on to show the same is true of business; banks, railroads, steel companies, pharmaceuticals – nothing it seems, is built for ever. What’ll do for Facebook will be some Caesar-Brutus like internal shennigans (endogenous shock) like wot-did-it for MySpace or some external meteor (exogenous shock) like the rock that wiped out the dinosaurs (Remember Olivetti? Netscape? Lycos, Altavista?). Either way the future’s not bright. For anyone.
So there we go. 5 reasons why Facebook is a Turkey – But on the bright side – it could be worse; battery chickens after all, only live for 40 days.
So what to do about a problem like Facebook?
Well I recommend that while there’s music & moonlight & love & romance , we should face(book) the music and dance. Sounds like a cheerful song….
Only – when (not if, but when) you lose your shirt (and your data) – Don’t say I didn’t warn you.