The Social Network has little Value in a World of Flow

Fred Wilson recently wrote a post about how the flow of data is important versus the data itself. Primarily in response to the ongoing bushfire in the blogsphere about Facebook and Google Friend Connect and the larger context of data portability.

The conceptual point of flow versus data is important one to highlight.

It is very easy to confuse the two. To an extent this is an artifact of our language which emphasises objects (nouns) over flow (verbs). But it is also influenced by trying to use an existing frame-of-reference to discuss a new frame-of-reference that is only just beginning to come into focus. This is always going to make everything more difficult.

The web is moving into uncharted territory. Up to now we have been dealing with the conversion of existing real-world into an online equivalent. Now the web has reached the point that it is moving beyond the confines of being a real-world analogy. This is creating vast new opportunities, few of which are known to us now. Data portability discussion exits within this new framework.

To make headway understanding this new framework, we need to converse using language that properly describes this new framework. The language of flow will help us frame problems and hold conversations that enable solutions and new opportunities.

In Wither Social Networks, Arise Communities I pointed out that social networks are glorified contact books. A better way to look at social networks is that the merely describe a connection between two people. They are the pipes, wave-guides, tubes along which guide the flow. What happens at the end points is not part of the social network.

In addition to the guides, we have process points. The process points are where points along a flow something happens to the flow. Whether its received (such as email), or processed (such as Wesabe). A process point is not necessarily where the flow stops, merely where it undergoes some sort of processing.

Facebook's aim is to become the primary process point. They know (or suspect) that merely having a description of a flow network is not enough. They have to be a processing point, but here is their dilemma: Facebook was never designed with being a processing point in mind, merely a description of a flow network. So their strategy is to try and control of the description of flow networks by restricting access while they shift to being a processing point, Facebook Connect being an example.

Bear in mind that the flow network description has little intrinsic value. It is the flows along the network where the value lies. In this Robert Scoble is wrong. It is not the flow network where the value lies but flow along the guides that is important.

So is Facebook right or is Google right? How about neither? Facebook's move is entirely about trying provide themselves with time to become a processing point and less of a pure flow network. Google's aim is to get access to the flow network in order to get access to the processing points. Google looses out if it doesn't know about the processing points. Neither are taking the positions they are merely out of moral indignation. I do find Google's behaviour less obnoxious than Facebook as Google's move is about access where as Facebook's is about control. Not really surprising given Facebook's past behaviour and in the words Umair, evilness.

Ultimately, it is a meaningless argument. The web is shifting so fast that both companies actions will soon be lost in the momentum in the move to flow. The flow based web even looks like it will overtake the Data Portability movement. Rendering the broader discussion irrelevant as well.

Tags: Social Networks, Facebook, Data Portability, Google, Web Next, Web 2.0, Fred Wilson, Robert Scoble, Umair Haque, Web Services

Wither Social Networks, Arise Communities

A community is an assemblage of people around a common interest. What Hugh MacLeod calls a social object. Social Networks, like Facebook, are glorified contact books. And as Facebook is finding out, people get stroppy when you get between them and their contact books.

A community, on the other hand, behaves differently. The members of a community are there because of the shared interest or bond, the social object. Consider the rise of communities around particular diseases as highlighted in this week’s NewScientist (vol 198, issue 2656). These communities are generating a wealth of data about these diseases that would otherwise be expensive or impossible to obtain. Communities tend to generate data around the particular shared interest beyond simply demographics that you get in a Social Network.

The data is hugely important. As Tim O’Reilly is fond of saying, “data inside” is the new “Intel Inside” (between time point 2.15 to 3:20 in the presentation). The value of web companies is entirely determined by the data they can aggregate and turn into new knowledge. Communities generate large amounts of data by harnessing the network effect. As each member adds more data around the shared interest this creates a positive feedback loop encouraging more people to add more data and so on in a virtuous cycle. A good example of this principle in action is the company Wesabe (also discussed by Tim O’Reilly in his keynote at 2008 Web2.0 Expo).

Social Networks don’t have this positive feedback loop that generates great swathes of data. While they do have network effects this is merely increasing the size social network by members rather than adding large amounts of data. We are even seeing indications now of limits to how far network effects work in maintaining growth of membership. The amount of data in social networks is relatively limited and most of this information is limited to who knows who and simple demographic data.

Social advertising is the “next big thing” in advertising. However, achieving this on a social network has not been easy. An outcome that is not surprising. The effectiveness of advertising comes down to two things: attention and intent. Attention being what is the person doing at the moment. Intent being why are they doing what they are doing at this time. The more closely you can determine the attention and intent of the user the better the advertising can be made to be of interest to the user.

Social Networks do not offer great data to determine attention and intent. Just because you are a 46 year-old climate researcher, does that determine why you are looking for a holiday? An advertiser could assume you are looking for a holiday for yourself but there is no evidence for this. Nor can a social network really say whether you are looking for holiday in the first place. There is little data to indicate attention and intent. Communities on the other hand do offer good data for determining attention and intent. Consider the climate researcher. He joins a community around travel and holidays and asks the question of the community “what is a good holiday as a birthday present for my 16 year old daughter?” Now we know attention (searching for a holiday) and intent (as a present for his 16 year old daughter). Having this data allows the advertiser to very accurately target with information about holidays suitable for a 16-year old girl.

People like being part of a community. We are tribal at heart. A social network is a mathematical abstraction that merely indicates a connection. The tribe will always win over the maths. Communities will win over social networks.

Tags: Tim O'Reilly, Social Networks, Hugh Macleod, Social Object, Community, Data Inside, Attention and Intent, Facebook, Wesabe