Facebook, the future operating system of the Internet ?

By | 05/09/2010

Facebook is, apparently, a social network. Let us point out that a social network is not a directory of persons, but a directory of links. The underlying principle is the Six Degrees Of Separation theory, which says that between any two people on earth, there are no more than five intermediaries. Take a bushman, for example:  you know someone who knows someone who, etc. who knows the bushman. All online social network are the same, in that they are not that much interested in people, but rather in relations. The proof is simple: if someone quits Facebook definitively (which is not that easy), what disappears is more than one entry in the directory, it is all links and all interactions with one’s 130 friends (the average number in mid 2010).

We shall not dwell on the amazing Facebook statistics; 500 million members, whose half connect every day, thus contradicting a sentence I hear quite often: “I am fed up with Facebook, and I quit” (sentence putting Facebook equal to the television). Actually, the celebrity on Facebook who lasted the shortest time was a charming English Lady, Ivy Bean, who joined Facebook in 2008 at the age of 102, and died in July 2010 with 5,000 friends, and also 56,000 followers on twitter.

Facebook is fundamentally different from other social networks, by at least one aspect: its open APIs. Most social networks, including professional ones, have very poor semantics in respect to the links. Linkedin, for example, allows two main definitions for the link : “we know each other“, with a few parameters (we are colleagues/one is the boss of the other/we have contracted work between one another , etc.), and “we are part of a same group“.

In Facebook, the semantic of the link is open through a set of programming interfaces, thus enriching the relation between two or more persons. Users can then calibrate their interaction, for instance they may poke each other, send flowers, play together, invite one another to an aperitif, or even share a kitty to buy a common gift. This opening of the APIs is what attracts brands, with the hope to make low cost viral marketing.

Facebook was, from the outset, designed to be an applications platform, something much more sophisticated than a simple social network. And so, little by little, Facebook overflowed out of it’s platform, and, as a cuckoo, positioned itself on sites beyond its own, each time bringing with it, a very interesting function, albeit a little intrusive.

The first one was Facebook Connect . The principle here, is quite straight forward: when someone develops a web site which requires authentication, why bother developing this feature, when Facebook offers it for free, and at low integration cost. The interesting side effect is that the end user is no longer obliged to enter one more time their own identification. It is a real win-win-win deal : the user avoids burden, the web site owner avoids development, and Facebook gains not only more users, but also more knowledge about usage. One should remark that, on Facebook, one has usually a single identity, which is contrary to the basic usage of the Internet: why should one be the same in a professional bulletin board, a forum of enthusiasts, on dating site, or as an avatar in Second Life? Facebook is always chasing for people taking another identity than his own; Facebook is anything but anonymous.

Then came the like button, which was also free to put on any other web site. If someone browses a site, and likes it, they can very easily share it, by making a single click and have it then appear on their Facebook wall. It is the same win-win logic, the web site developer sees his own viral promotion done for free. The same logic applies for other plugins : recommendations, videos, and so on. They are all offered by Facebook, under the obvious term “Social Plugin“, with the intention to be the viral marketing enablers; not only on Facebook site, but on any other site. This is a big shift from other social networks, and is in the same spirit as the Amazon set of widgets which were invented 5 years ago.

The very last one, still under test, is the button subscribe to, which allows users to follow someone else’s messages; a service directly competing with Twitter.

Facebook is forging its expansion in creative ways. In what is perhaps the strongest signal yet, it made a significant shift in its relationship to virtual goods. Those little virtual objects, which are to be found on social platforms, and hugely in 3D immersive platforms, represented, only in the US, a 3 billion US dollars market in 2009. Facebook started selling them in 2008, but the revenue was low, a few ten million dollars, almost nothing. Facebook therefore decided, earlier this year, to totally change its strategy, stop selling virtual goods, offering instead, a virtual currency, Facebook Credits, which allows 3rd party virtual goods to be brought and sold inside the platform. If the same logic applies, this virtual money could, one day, be used on other platforms. Will Facebook become the apps store of virtual goods? Will Facebook also be interested in the market of real goods, trying to do better than Google Checkout, an attempt to be a front-end, unique payment system, which never really took off?

Then, very recently, came Facebook Places

The market of local information is the biggest battlefield of the Internet nowadays. Being straightforward: I can quite easily, owing to twitter or blogs, know what happens in the street of Tehran. But it is 5 to 8pm on Sunday in Paris, there are three boulangeries which close at 8, I have not enough time to visit all of them, and I don’t know which one has remaining bread…

Many actors are in this market of local information. Google with Google maps, Yellow Pages, Craig’s list, Tripadvisor, Aroundme, and the last one, Foursquare. Facebook is now clearly entering this arena, and wishes to position itself on geo-localized data . Mobile Facebook apps already offer this function, albeit in the US only, at the time of this writing.

The difference between Facebook and Google is striking. We must not forget that the power of the Web is in peer to peer relations. Google, counter-intuitively perhaps, has never been 2.0. Google groups, is a revamping of the Usenet hierarchy, through the acquisition of dejanews. It is the only Google service where users are interconnected. On the other hand, Facebook Places, like Foursquare or Aroundme, allows users to exchange information on a wall. Google Maps does not.

If Google is still heavily controlling search, and advertisements on the Internet, Facebook is positioning itself more and more in crucial places: authentication, virtual goods and why not one day real goods payment, exchange of information, local information; and all this not only on its own platform, but everywhere, through its plugins. For Google, the search engine is free, and makes its income by leveraging other products, such as AdSense or AdWords. Facebook is now doing what Google has done so well, giving away its core service, to allow side businesses to come in. The difference is that it is doing it where Google is not that present: peer to peer.

Facebook is clearly taking control of some crucial applicative layers of the internet, specially the viral ones, with a probable desire to be, one day, the operating system of the Internet.

 

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