Exclusivity and Evolution in Social Networks

Researching social networks is fun.

Twitter is probably the first big social media site I’ve been seriously involved in.  I have a fairly limited set of friends (about 30), only a few of which preceded my joining Twitter — and most of those are only tangential.

The nice thing I like about Twitter is that you can explore potential relationships in a way not as easily done with popular –popularity-based– social networks such as MySpace, FaceBook, LinkedIn, etc.  While popularity is definitely a common motivation on Twitter, it doesn’t have as many rewards as other sites, partly because of it’s ephemerality, and partly because your popularity “score” isn’t as easily seen by others who use 3rd party tools such as TweetDeck.  The result being that there isn’t as much pressure to accept friends on Twitter, and not as much stigma to dropping them.  It may be that because the relationships are one sided (followers/folllowing), but it also seems that most people have roughly equivalent lists, so there isn’t the non-recipricosity you’d expect with either spam followers or real popularity except with celebrities.  Things such as celebrity tweets may be the death of Twitter, since users flee from such artificiality.  Perhaps not all users, but the the ones that have strong networks and tend to pull others from one network to another.

Celebrities (and politicians) follow the crowd, they don’t generate it.  Their status as celebrities is bestowed by their popularity.  While celebrity itself can draw a crowd, it is dependent on the crowd’s approval.  In a word, it is “fleeting”.

Crowds have value to advertisers (and politicians) because that’s where you can find constituents/consumers.  But creating value for advertisers drives away those valuable participants who have strong networks, interesting ideas, and create content that draws the crowds.  Not that those participants are especially valuable to advertisers themselves, but for their draw.

Some networks try to combat the encroaching artificiality by being exclusive.  But can an exclusive network be based on merit when exclusion is based on elimination, not inclusion?  Exclusivity is almost by definition not merit-based, and synonymous with snobbery.  Sites like asmallworld.com inevitably end up with no value except to the vaccuous vain and (temporarily) to advertisers.  Because their exclusivity is based on materiality, the participants have large sums of money to spend, and surprisingly similar tastes.  Unfortunately, exclusivity, if it doesn’t tend to drive out the valuable participants, has no way of drawing them in.  But if you’re not trying to draw the crowd, the valuable participants are not as valuable to you, but then you depend on vacuity, which cannot last.  Nature abhors a vacuum. (And so do even the very rich.)

Niche markets are also of value to advertisers, because they can target the advertising.  Big ticket items just happen to be another niche in that respect.  Likewise, by being in a niche, you are also participating in self-selectivity.  A benefit of self-selection is that it is not quite exclusive, but the downside to advertisers is that artificiality is easily spotted in a self-selective group.

Some say niche social sites are the future of social networks, but because of their limited value to advertisers (except those that are geniuinely a part of the niche — such as a model train company to a model train fansite) means they will have limited draw.  You don’t want a fragmented market, you want a segmented market. Perhaps niches within general networks will become successful.

I suspect advertising (and hence funding) will follow the crowd drawn by the valuable participants, who I’ve already argued will retreat from the artificiality of non-niche advertising.  Which, if correct, necessitates a constantly shifting serial social network landscape.  In other words, Facebook will fall within two years.  The same way MySpace and Friendster fell before it.

Will there always be a tendency towards a single “most popular” site?  Or will it balance between triumvirate, like network TV, automaters, and other industries?  First, the other triumvirates are losing their grip.  Second, and more important, because membership and participation are vital to social networks, people can’t split their time effectively.

If exclusivity isn’t the answer, maybe evolution is.  Unfortunately, the cost of evolution in social networks means that the cost of recreation may end up being more than the value created. Eventually, advertisers will see the trend of rise and fall, and not give such big valuations.  So efficiencies will have to be introduced.

Perhaps one network will eventually be able to adapt (as opposed to evolution, which would mean that one with an advantage would supercede the previous), though I suspect the reliance on advertising revenue (eventually) will prevent that.

What efficiencies can be introduced?  Or asked more concretely, what is duplicated?  Features such as login, profile, avatar image are obvious choices, but nothing has been successful yet.  There is a degree of trust that has not been built yet, and perhaps never will.  Higher level functions like messages, status updates, and groups might be possible.  Applications like blogs and photo galleries can be.

The core of social networks, the network of members is the main obstacle to sharing, because the sites themselves consider the network their value.  But that’s not it at all.  It’s the crowd.  The network is what keeps the crowd on their site, what makes it “sticky”.

One possibility is a utility that could provide core services such as profiles and allow networking, but the value (crowd) is provided by niches.  You can see Ning and Microsoft Live positioning for this from different ends.

There are some assumptions I am making that could be incorrect:

  • The “valuable” participants might not be that critical
  • Exclusivity might not be antithetical to merit
  • Advertising might not necessarily be artificial
  • A social network monopoly may be able to adapt and not lose it’s edge because of advertiser control
    I believe Google is actually evidence that it does.  Adwords has jumped the shark, and if they don’t find a replacement, Google will be history.  Between Adwords and Doubleclick, they have the potential to track (and thus monetise) internet-wide usage, but something more than “do no evil” has prevented them from succeeding.
  • People may eventually trust another monopoly they haven’t been willing to with Microsoft.
  • The very rich (& other niches) might not need to follow the crowd makers
  • Valuable participates such as content creators and network leaders might be able to be paid to stick around.  That’s the model that traditional media has followed in the past, but it hasn’t been able to compete against the new media effectively so far.

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