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July 23, 2011July 23, 2011

Book Excerpt: The Death of Facebook

The following is an excerpt from Welcome to the Fifth Estate, Chapter 7: Sustaining Your Community Over Time

Who in their right mind would predict the death of Facebook, given its ever-increasing dominance? But everyone always asks, “What’s next?”

One thing long-term Internet citizens have seen over the past 30 years: Communities and social networks get large, even as dominant as Facebook now is, and then they fade.

Some stay relevant as leaders in their niches — YouTube, for example — and others drop into a second tier, or worse. Friendster, MySpace and AOL exist in some form to this day, but none of them enjoys the leadership positions and mindshare of their heyday.

One of the secrets to Facebook’s longevity is its replication of the McDonald’s business model. McDonald’s offers a cheap menu of foods and beverages that contemporary society demands. If a customer wants a latte, they can go to McDonald’s. Ice cream? McDonald’s offers soft serve. Salad? No problem! And McDonald’s still offers the now classic Big Mac, just in case someone wants a burger.

Facebook does the same with its social network functionality. It literally watches competitors create new features, and then it incorporates those functionalities into its network, competing head-to-head in that functional space. Facebook relies on its incredibly large user base to accept and use the new features. We saw this with Facebook Places and the competition it offers Foursquare. Other examples include:

Facebook Pictures competes with Flickr
Facebook Video competes with YouTube (this feature does as well as a McRib sandwich on market share)
Facebook Chat competes with AOL’s AIM
Facebook Questions and Groups compete with LinkedIn Questions and Groups

One could argue that the strength of this business model is also Facebook’s weakness. As we have seen over time, Facebook constantly updates its interface to incorporate these changes. This is relatively easy because of its text-based, three-column layout. While text allows Facebook to offer all of these features, the user interface has become clunky and cumbersome. In essence, being the McDonald’s of social networks has forced it into an over-reliance on text.

If a competing technology arose that provided a new interface, an almost completely visual tactile (touch) input to a social application, then Facebook would be challenged to completely redesign its web site. Several new apps on iPad have shown a new way to interact. Early signs show these applications are becoming immensely popular.

One iPad application, Flipboard, allows users to create their own magazines based on preferences and socially recommended content. ABC’s popular iPad app features a visual globe of news stories. Both application interfaces rely heavily on pictures with very few words, and why shouldn’t they, given that a picture is worth a thousand words?

It’s only a question of time—maybe even within the next two years—before a primarily visual-interface-based social network launches. Processing time, software development and bandwidth inevitably will increase to enable it. How will Facebook upgrade its interface to compete with this kind of innovation?

It would take an almost complete gutting of its social networking code. Facebook’s system has become so clunky that Facebook CEO Marc Zuckerberg can’t make changes that he wants to in order to open the network.Plus Facebook’s original feature of private, closed social networking was its big differentiator. The privacy tension caused by the movement toward openness continues to haunt Facebook.

Such a network upgrade likely would force Facebook to abandon users who are still text-based. It would be very hard for McDonald’s to keep serving Big Macs while offering a tastier Filet Mignon sandwich that holds market share (Angus Wraps aside). If you think Facebook cannot unseated,or it will not be by a tactile-input-based network, what about a video- based network? Bandwidth and technology permitting, how about Third Life, a better version of Second Life’s would-be virtual-avatar-based world, where interaction would occur in a computer-generated 3-D environment? Or a video-based network like, but more nimble than, the original Seesmic?

Isn’t it just a question of time before Facebook meets a competitor with a better, next-generation interface that it can’t match? Yes given the context of Internet history and technology development.

If a better, easier choice becomes available, you can expect people to spend more time on it than on Facebook. The Fifth Estate moves with what’s hot, and without thinking about the historical value of today’s technology platform of choice.

Business leaders and strategists cannot afford to become too entrenched on a mega social network like Facebook or Twitter. If an organization cannot move with its community because of an over-investment in one network, it loses the opportunity to serve stakeholders effectively.

# # #

The source material for this section of the Fifth Estate was originally published on this blog under the same title.

May 18, 2011May 18, 2011

Facebook Growth Ending

Inside Facebook posted some statistics from their Gold service showing Facebook’s growth hovering just above the 0% mark in five of its most mature markets — the United States, Canada, the United Kingdom, Turkey, and Australia. As the post notes, now that Facebook is used by roughly half the population in most of these countries, the inevitable end of adoption is occurring. Now Facebook needs to keep its users actively engaged to continue driving page views.

Part of retaining its active user base lies in Facebook’s feature approach. Two popular recent additions — Places and the new Groups — demonstrate how Facebook adopts features that are popular on other social networks, and incorporates them into its larger user base. By adapting new popular features, Facebook continues to remain as a relevant social network of the times.

In many ways, this strategy is reminiscent of McDonalds‘ approach to adopting popular items from fast food competitors. As this approach has paid off for “the Golden Arches” with longevity, the copy and incorporate strategy works for Facebook. Consider the success that Places is currently enjoying against mainstays like Foursquare and Gowalla.

Also consider that in spite of a text heavy user interface on its desktop/laptop web interface, Facebook appears to have successfully transitioned to mobile. According to research from Dan Zarella, roughly one third of all Facebook posts are occurring on mobile platforms. Of those mobile postings, a majority of those come from Facebook’s mobile web interface with the iPhone, Android and Blackberry apps roughly even for a distant second place.

The ability to successfully adapt new features and transition to the access method of the immediate future indicates Facebook’s market leadership will likely last for the foreseeable future. Even given its current plateau, the social network is still owns 50% of market share visits with its nearest competitor YouTube taking 20%.

What do you think of Facebook’s recent plateau?

August 27, 2010August 27, 2010

The Death of Facebook

The following is draft material for my next book, Welcome to the Fifth Estate (the follow up to Now Is Gone, which is almost out of print). Comments may be used in the final edition. You can download the first drafted chapter of the new edition — Welcome to the Fifth Estate — for free.

Who in their right mind would predict the death of Facebook given its ever increasing dominance? But this is a question everyone asks, “What’s next?”

One thing long term Internet citizens have seen over the past 25 years, communities and social networks get huge, even as dominant as Facebook is currently, and then they fade. Some continue to stay relevant as the leader in their niche — YouTube, for example — and others completely fade away into a second tier or worse — a la Friendster and AOL.

In my opinion, one of the secrets to Facebook’s longevity is its replication of McDonalds’ business model. That’s right, McDonalds.

A good part of McDonalds relevancy lies in its ability to offer a cheap menu of foods and beverages that are popular in contemporary society. You want a latte? Go to McDonalds. Ice cream? We got soft serve! Salad? No problem! And, oh yes, we still have your favorite Big Mac, just in case you want a burger.

Facebook does the same with its social network functionality. It literally watches competitors create new features, and then incorporates that functionality into its network, competing head to head with the leading social network in that functional space. Facebook relies on its incredibly large user base to accept and use the new features.

Most recently, we saw this with Facebook Places and the competition it offers Foursquare. Other examples:

Get to the Funeral, Will You?

This strength is also Facebook’s weakness. As we have seen over time, Facebook constantly updates its interface to incorporate these changes. This is relatively easy because of its text-based, three column layout.

Frankly, while text allows Facebook to offer all of these features, the user interface has become cumbersome. In essence, being the McDonalds of social networks, the user interface or menu has so much junk on it, the social network has been forced into an over-reliance on text.

Enter a new interface, the almost completely visual tactile (touch) input to a social application. A couple new apps on iPad have shown a new way to interact. Early signs show these applications are becoming immensely popular.

Flipboard allows users to create their own magazine based on preferences and socially recommended content. And ABC’s iPad app (300,000 downloads) features a visual globe of news stories. Both application interfaces rely heavily on pictures with very few words, and why shouldn’t they given that a picture is worth a thousand words?

To me, it’s only a question of time — maybe even within the next two years — before an almost completely visual social network launches. Processing time, software development and bandwidth will inevitably increase to enable it. How will Facebook possibly upgrade its interface to compete with this kind of competitor?

It would take an almost complete gutting of its social networking code. Frankly, this system has become so clunky that Facebook CEO Marc Zuckerberg can’t make changes that he wants to in order to open it (Plus Facebook’s original feature of private, closed social networking was its big differentiator. The privacy tension caused by the movement towards openness continues to haunt Facebook).

No, such a network upgrade would likely force Facebook to abandon users that are still text based. It would be very hard for McDonalds to keep serving Big Macs while offering a tastier Filet Mignon sandwich that holds market share (Angus Wraps aside).

Think it won’t be a tactile input-based network? Bandwidth and technology permitting, how about Third Life, a better would-be virtual avatar based world where interaction occurred in a computer generated 3-D world? Or a video-based network like but more nimble than the original Seesmic?

Isn’t it just a question of time before Facebook meets a competitor with a better, next generation interface that it can’t match? To me, given the context of Internet history and technology development, it’s not an if, but a when. The Fifth Estate moves with what’s hot, and without thinking about

As communicators and strategists, we cannot afford to become too entrenched on a mega social network like Facebook (or Twitter). If we cannot move with our community because of an over investment in one network, we lose our opportunity to serve our stakeholders effectively.

What do you think?