Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.


 
Wednesday, December 12, 2007

How to Crash and Burn in the Edgeconomy, Bebo Mini Case Study


Here we go again...

I'm sure everyone will spend lots of time discussing this. So let me cut to the chase, and just discuss the endgame.

1) None of this really matters, because the marginal value of "apps" is almost zero, and will continue to stay zero, until we have social nets where connections are economically meaningful. That's why OpenSocial isn't a big deal to Google.

2) This game is competition for openness. The most open platform will win.

Let me try and put it another way

Facebook opens up - to a competitor. Lolz.

See the problem here yet?

It's simple: only a player as strategically inept as Bebo would seriously consider signing onto Facebook's (pseudo) platform a good thing.

Why? The marginal benefits for Bebo (joining Facebook) are tiny - and not durable. Short-run, and negligible, gains to usage, perhaps. But the opportunity cost is huge: Bebo fails to press for greater openness, and so Facebook will always and everywhere be able to exert market power against Bebo.

Anyone with the slightest inclination towards thinking strategically might note that it would be far wiser to sign up with a more neutral party (ie, Google), or, better yet, launch your own (open) platform, and essentially amplify the selection pressure on weaker players.

It's a strong signal that Bebo is about to get Friendstered, in fact. That's really the only interesting thing bit of this non-event.

Or, of course, you could just keep basically...ummm...drinking the kool-aid:

"...There is no word on whether or not the other social networks will be able to leverage the power of the Facebook social graph but if Facebook opens up the social graph, this will be the biggest thing ever and Facebook will indeed become the dominant player in social networking."

The biggest thing evar!!11!

Awesome. Last time I checked, there was this minor problem of the the global financial system melting down...

-- umair // 9:54 PM // 2 comments


Comments:

Bebo just got bitch slapped. Hard. Ouch.

Umair, in a year's time, what do you think the social networking industry will look like?
// Anonymous Anonymous // 1:25 PM
 

Is Google really a more neutral party on this, since the Open Social development is coming out of the Orkut team?
// Anonymous Anonymous // 8:35 PM
 
 

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