Tuesday, September 25, 2007
Research Note: Facebook Perestroika vs Microsoftian Evil
So, despite huge amounts of pushback via email and comments, I have been pointing out for a while now that Facebook is evil - and it's pseudo-platform strategy is so yesterday.
But if you needed any more confirmation of my hypothesis, it came out in spades today: apparently Facebook and MS are cozying up towards a(nother, much bigger) deal.
Oh, the irony.
Look. We can either be seduced by the fact that Mark Z listen to his users, keeps his design clean, be dazzled by the coolness of being able to code stuff for Facebook - yes, all that stuff is cool, from a geeky and economic point of view: it's good.
Or we can also choose to see the evil: traction on someone else's terms doesn't make things cool, more open/free/transparent, strategic, create long-run value, etc.
More to the point, we can face up to the fact that Facebook is evil; that Microsoft is interested in Facebook not just because, well, it's Facebook - but also because it is the prime mover of strategy as evil. And Mephistopheles has a glint in his eye; Microsoft sees a next-gen platform which will let it keep playing the same cheezy, lame, value-crippling games for another decade.
Ultimately, that's why MS is interested in Facebook - not just because of traction, etc: but because the strategic similarities between the two players are now becoming increasingly - disturbingly - clear.
In other words, this is a game - closure, lock-in, etc - that MS knows how to play.
But strategy is a function of economics. And today's economics are radically different from those that let Microsoft rise to power: so, unfortunately, this is also a game with decaying payoffs.
Today, I think, even geeks (especially geeks) should be the ones clamoring for Facebook to bring down the iron curtains.
For example, Phil made an interesting comment about Facebook/closed nets and security. Good point. But it's a false dichotomy: we can have open nets and plenty of security. All that requires is (uh oh) giving connected consumers control over who/when/where/how can utilize their graph data,
In the bigger picture, we have to think strategically. Do we gain more by opening up than by staying closed? I think the answer is inevitable - yes.
But in the real world, this choice will largely be driven by geeks. If geeks see the bigger strategic picture, Facebook perestroika will happen fast. If they don't, it will still happen - just more slowly.
Just imagine a future where Facebook = Microsoft.
Could there be any deeper validation of what we've been arguing - that Facebook's evil, and that it's strategy is obsolete?
Could there be any clearer signal that Facebook stands for...well...
everything that the real visionaries in the Valley don't, than the fact that it's dancing with - and being seduced by - the devil?
Lolz - nope.
Final note - does the deal math make sense? Well, if you're drinking the kool-aid, perhaps. But if you've been following the argument, I don't think Facebook, in terms of long-run value creation, is gonna be the next Google...
Bingo.. Facebook is the new Passport/Live ID. I knew Facebook was evil the day I tried to sign up and couldn't because I no longer had a school issued email address. Who the hell would want to join a social network of a school you never attended anyways?
I agree with a lot of what you're saying here. Certainly MS + FB are a good match precisely because a closed Facebook is the kind of platform that MS can understand and love.
I can even see how that parses as "evil". But if you take "evil" to mean "destroying value" then I'm not so sure.
I think the important point to drill-down into is : "what sort of application do you build on a social-network-as-platform?"
Now, if you think of a YASN as a certain kind of media or communication network, then everything you say about the value of, and inevitable triumph of, openness is valid. And if you think of applications like video players or give virtual gifts to your friends, then the walledness of the garden is a problem. Certainly for your way of looking at value as being branding.
But here's the realization I had when I saw Facebook's pitch to application developers : the YASN-as-platform answers a problem which has long plagued "web 2.0" developers. The infamous accusation that focussed web 2.0 companies are building "features" rather than full businesses.
How can a mere "feature" survive as a business? It can't, hence web 2.0 companies look to get bought by Google or Yahoo and incorporated into their portals because they have no business model on their own.
But what I saw in the Facebook ecology was a place where "features" were potentially able to survive as independent elements. No way can A.N.Other calendaring / meeting planner survive out there on the web on its own. Who's going to sign-up, remember to go back and use it, manage to encourage their friends to join etc. in order to make it worth-while?
But on Facebook, with the social network already there, with one-click sign-up and invite your friends, AND MOST CRUCIALLY, the ability for the application to talk to people who aren't already signed-up to it, via the news feed, you can imagine a clever, single task "feature" being able to make it on it's own. Even to find a business model.
It's worth emphasizing that point about the news-feed. *This* is the service that a platform like Facebook can provide to a developer which the web-as-platform can't. Not even OpenID can provide the equivalent of the news-feed. I don't mean technically but *culturally* - what Facebook has is a particular club where people have signed up to be tied together by other communication conventions that don't exist outside it. And Facebook app. developers can take advantage of this convention as a platform resource.
Notice that FB can't just disolve back into the web via opening its protocols, without throwing away these extra conventions. It's not technical, it's social. FB users have already decided to allow themselves to be part of new social practices that non-members haven't. I believe this is going to become more and more explicit as YASN-platforms offer richer tools for defining social conventions, and give users finer grained control. It's their big opportunity : to give *appliciation developers* access to the new social contracts that not only don't exist out on the wild-web, but couldn't exist out on the wild-web.
This *is* potentially evil. People don't necessarily know that they are signing up for these extra conventions. It *is* certainly a way to lock people in. Perhaps Ray Ozzie's web-clipboard will turn out to be a similar convention on MS's web-platform. But it is also adding value that the web with it's open microformats and feeds can't.
from j allen [msft]:
To the contrary, I think this scenario is rather different from traditional MSFT platform play. You might not have noticed MSFT was on stage with Facebook at their platform launch, so it's not as if the MSFT interest in platform aspects is new. I responded to Marc A's post about "three platforms" in part rebutting the notion that this model is a traditional PC platform play.
(OTOH, being a long-time loyal reader, I know you have something to say about my "data is the platform" comments.)
I think your value creation observations are the most compelling out there. Your main point seems fairly similar to Hagel and Singers 'Infomediary' concept, which is a similarity that I think you'd like.
Here's a key quote from the WSJ article you linked to that seems to get it all wrong:
"Some industry executives believe the Internet today is facing the sort of turning point that the computer-operating-system sector confronted two decades ago: Whoever controls the technology platform for buying and selling online ads could hold tremendous power over the Internet Industry for years to come -- much as Microsoft was able to use its Windows operating system to shape the personal computer."
So that being said, I think the Infomediary role is more limited and targeted to verticals, than a wholesale expunging of the Advertising industry. I'm not even seeing the infomediary role really coming into play direclty, just indirectly through Google's model. Am I missing something here? Is the Infomediary similarity wrong?
Sure things will change in decades....or are you supposing dramatic changes within a few years?
Umair, you sound even more defensive than Tom Andersen did in the recent Fortune interview. ;-) FB getting to you?
FB is not closed, it's private. There's a significant difference. private != evil. That's ridiculous.
FB was pure genius in teasing out the essential use cases for "private" at the same time that all the fan-boys started clamoring all over themselves to be open. It's a blue ocean and they're kicking butt.
Now as for an MS partnership, I agree that it's cause for skepticism but it's a total stretch to point to this as proof of FB's lack of value.
Myspace starting to look a lot like facebook ...
David G -
Facebook is both private AND closed. They're private in that they let users control how much of their information is accessible by others. You could even argue the fact that they prevent certain people from joining certain groups being "private". But Facebook is also closed in how restrictive they are in outside access to their architecture and how restrictive they are in how a user can customize their own page. That has nothing to do with being private, it has to do with being overly controlling of information that really doesn't belong to them in the first place.