Misunderstanding Facebook?
November 5, 2010
I just read “Big Deal: Facebook emerges as Major Player in Mobile and Location-Based Services.” In a sense, I agree with the write up. On the other hand, I think that the article is one of those summer stock efforts. You know the play was written by Shakespeare, but what the heck happened to make Act II so confusing.
Here’s a passage that resonated with me:
As context for all of this the company said it has an active mobile user base of 200 million people (out of more than 500 million total users). It doesn’t break out US vs. non-US numbers — though I’d bet the majority are in North America. If even half of those users are in the US it would make Facebook as large as Verizon. The difference is that Facebook’s members are much more engaged.
There are two really important points embedded in this snippet of text, and I want to highlight those and show why Facebook is in a state of increasing misunderstanding among the azurini.
The two words:
Active
Member
These two words are a very big deal, even bigger than mobile. Here’s my view.
Facebook creates a perception of this type of environment. This is not like using the services provided from the local electric or water company.
Word one: Active. As a touch point, consider the Google. Google has lots of users. The users navigate to a Web page, do something, and hit the trail. I know that lots of Google users provide some information about themselves and that lots of Google users rely on various Google services. I rely on the electric and water company, but I don’t spend what my boss at Booz, Allen used to call “quality time.” Google and some other services are like plumbing. Essential—I don’t talk about it at lunch. Facebook users are active. Active means habitual access. Habits in online behavior are good. But a habit like using an electric light are hard to break, but they are still utilitarian functions. Part of the woodwork. Have you hugged your door frame today?
Member is word two. This seems to be so obvious that it warrants little thought. Wrong. A member changes the rules for active. Think about a health club. The health club sells memberships to people whom the health club owner knows will quit in droves. If every member showed up at a health club, there would be no room to move. Forget exercise. But the health club person has some information that is really valuable. The “member” provides lots of information and becomes one of the health club’s assets. I know that people sign up for Google and provide lots of data to Google. But Facebook members are joining what is perceived as a “special thing.”
No other outfit at this time has managed to replicate Facebook’s success. I think the number of people and the number of Googlers working at Facebook make the company very interesting and very disruptive. Facebook’s disruption seems to be building. The evidence is the attention given Facebook’s announcements. Google, on the other hand, is sending its lawyers after the Department of Interior. News for a Lexis user. For me, amusing.
What happens when you combine active and member. Facebook gets a green light for these activities:
First, by definition, everything is curated by a member whom another has accepted, wants to accept, or follows in some manner. I don’t follow much of anything on Google. Facebook by definition makes curation an output of active members.
Second, the clicks of active members provide big blinking signs on groups, information, and activities. Sure, Google has these blinking signs as well, but the difference comes back to the active member characteristic. There is real value to advertisers and members within the Facebook universe. Facebook is not plumbing. Facebook is like some weird digital meeting place, mail room, and concierge service. There is no anonymity in this construct. People may be fake, but the perception is that Facebook is human. Active members.
Third, any service that Facebook rolls out can take advantage of active members to provide various advantages for Facebook. Let me give one example in this post: Search. Why use brute force, when the active members provide useful clues for what to index, what’s hot, what’s not, and other important factors. Facebook has a way to offer search that does not require the space program costs that Google has eagerly maintained for the last 12 years. With the Xoogler body count rising at Facebook, Facebook could roll out services at a cost advantage and do to Google what Google hath done to so many others.
Net net: mobile is a subset of Facebook, not Facebook’s main event. At some point, new computing modalities will bypass the desktop anchor method. But in order to understand the value and potential impact of Facebook, I think it is a good idea to keep the “active member” angle in mind. That’s far more important. When members become inactive that’s when Facebook is in trouble.
Stephen E Arnold, November 5, 2010
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