Shortly after my post complaining about Facebook, Cory Doctorow posted an entry on BoingBoing about why he feels Facebook is going to fail.

I have been saying for some time now that there is indeed a new bubble, but that bubble isn't industry wide. It is going to be a social network (and I feel, after attending CTIA, possibly mobile) bubble burst.

That being said, I must note that I have many friends working at social network companies and I nearly took a job at one. I feel that there will be a popping of bubble soon, but I think that if these companies play their cards right (i.e., don't let the fame get to their heads and keep their sights within a realistic horizon) most of them will come out OK. I say "most" because there are far too many small time players in the market that definitely won't survive a sudden vacuum of cash and a sudden realization of the necessity for real world good business practices. 

There is too much money being flung around in the market like poo from the hand of a monkey that snorted an eight ball of cocaine cut down to 50% laxatives. Nothing worse than a monkey hopped up on blow with the shits; talk about flinging!

In response to the BoingBoing entry, I posted this very long diatribe that I include here for your reading pleasure. I summarized most of my feelings on the matter:

I have been saying for a while that there is a bubble and the bubble will burst, but it won't be industry wide like last time. The Social Network Craze™ we are seeing today is going to die, albeit a slightly less fiery death than I would like.

Part of the reason is what Cory goes into here. Another part, which is slightly specific to Facebook, are the apps. I blogged my feelings about the Facebook apps:

blog.kraquehaus.com/240977.html

(We'll see if I can imbed a link into my comments...)

Another reason why I think the craze will die is because social networking sites are much more about fashion than about technology. This is a very important point. The users are fickle. If it isn't cool anymore, then they will trash it and move along. I think that this is much more of a reason as to why people have moved from one service to the next. It has much more to do with following the Cool Kid Migration™ than it has to do with social morals and etiquette. A service becomes SO popular that the Cool Kids™ have to find a new way to set themselves apart. Once MySpace has gotten too popular, then they must relocate in order to retain their "bleeding edge" social stature.

Part of what drives the Cool Factor™ is indeed technology, but that is merely a footnote.

Right now the cool thing to do is to leave MySpace. "MySpace is SO last season! OMG!" Soon Facebook will no longer be the "new black".

Once this trend starts to pick up momentum and is seen by the people holding onto the dollar bills, things will change. Social networks will only be useful as leased user bases rather than these current ridiculous purchase evaluations we are seeing. ($15 billion for Facebook?!?)

Social network sites, if they "succeed", will see a huge spike for a good amount of time, then they will plummet back down to real world numbers once people have moved on. I think the key for long term sustainability and value for these companies would be best delivered via niche marketing rather than global appeal.

Take Linkedin for example. They are a social network, but one that delivers a very specific need without a lot of fluff. They might not end up being the huge behemoths that others try to be, but they will have a much more realistic and steady incline with much more user retention in the long term.

As a graphic designer who is also a member of multiple bands, I will be near the top of the list of people who will be ecstatic when MySpace dies down enough to where I no longer must touch it for promotions.

Another problem: Banner Ads

Here is another problem I stumbled upon while thinking about this comment: The business model of ad based revenue is driving these online applications (these social networks are applications, after all) towards bad user experiences.

The "user experience" I am referring to is purely with regard to the UI of the sites. The companies are delivering UIs based on heightening page reloads and page views in order to ramp up profits. This reward system does not feed a positive return for good UI.

What I would like to see is this: Take the ads out of the system and use a subscription based model.

I realize this most likely won't happen since there is just SO much money in advertising, but it would be a model geared towards obtaining better user experiences which would in turn obtain healthier long term revenue.

This is how LiveJournal operates and I gladly pay every year for a subscription. (Now if LJ would only update their system with better functionality.......but I digress!)

This has nothing to do with my disdain for banner ads. I have no problem with a site showing me advertising. Actually, if a site employs very good advertising such that they are showing me ads for products I actually want, then we both win. My point is entirely about modifying the reward system within the business models.


In summation, The Social Network is Will Soon Be Dead, Long Live the Social Network!

Tags: social networks