The inevitable disutility of networks (or why Facebook will fade)

It’s hard to believe, but the day will come when you stop using Facebook. Here’s why.

So imagine you’re on the phone with your boss and beeep a new call comes in from your spicy Argentinian lover who’s in town and then beeeeep yet another call arrives from your Aunt Mildred who used to nag you about flossing your teeth and you have to decide — quick! — whether to keep talking to your boss, or find an excuse to pick up your lover’s voice, or get reacquainted with Auntie.

And you get it. Like those calls, not all network connections are created equal. The inequality of network links is the basic flaw in Metcalfe’s law, a hypothesis by the founder of 3Com and inventor of the ethernet that as networks grow, they rise exponentially in value. Metcalfe’s math, you see, showed that the connections inside networks grow more rapidly than the number of users do — two phones make one connection, but five phones make 10 links, and 12 phones make 66. Because every additional node, or user, links to all the users before her, each addition creates waves of new linkages — and if value comes from links, then networks must scale in value. Metcalfe’s law was famously behind much of the hyperbole of Internet Bubble 1.0 in the 1990s, pushing sky-high valuations for any networked business regardless of whether it was profitable.

Humpty Dumpty sits on the wall
Of course, March 13, 2000 was not kind to pet food companies heavy in e-commerce. After the Nasdaq crash, economists pointed out that Metcalfe’s law has several gaping flaws; for instance, if larger networks are always exponentially more valuable, any firm in the world with a network of users should immediately merge with a similar business. Why would Facebook and Twitter compete, if by joining their numbers 2x they make 200x more value? In 2006 Bob Briscoe, Andrew Odlyzko and Benjamin Tilly pointed out the most famous flaw of all … if we follow Metcalfe’s law to its logical exponential-value conclusion, eventually the addition of one final user would equal all the wealth on the planet, an impossible outcome.

Briscoe and team, pondering why networks may have less value than supposed, pointed to linguist George Kingsley Zipf, who created, yes, Zipf’s law. Zipf noticed that words in the English language are used in descending order of magnitude, with “the,” the most popular expression, making up about 7% of all word uses, followed by “of” with 3.5%, “and” at 2.8%, with all other words trailing in a slow fall-off. Zipf’s law resembles the Pareto Principle that states in any collection a few resources hold the most value, and Chris Anderson spun off of Zipf’s concept with his “long tail” discussion of Internet commerce’s ability to meet diminishing niche consumer needs. Zipf’s finding means that not all network connections have the same value; your boss, lover, and aunt all are connected to you, but like the English words you use daily, you value each connection in different ways.

Humpty Dumpty took a great fall

So if networks have less value than supposed when they grow — when, conversely, does network value fade? Every network, as old as the roads of the Roman Empire, eventually falls into disrepair, replaced by something else. This disutility happens before users bail; at some point, there is a sense that the thing which made a network hot has faded, building an impetus to flee. See: AOL, Friendster, Myspace, Second Life.

Intuitively this makes sense: you can feel the itch today with your land-line telephone and the postal service, the desire to give up on these once-useful services. Other networks you still use are growing painful, too; email is cresting, a slow slog every morning over coffee, and one might suggest Twitter with its elegant 140-character tweets is a new email with less commitment. Facebook and Twitter are growing cumbersome too, one filled with silly games and the other adding complexity to its once elegant system; hipsters are moving past both to Instagram, an app that requires sharing only photographs. (Don’t think the brains behind Facebook and Twitter aren’t worried about such risks; this explains the near-constant innovation and entanglement strategies, such as Like buttons, being spread by both to stave off your boredom.)

Networks have more than a utility based on connections; they also have a shelf life. Our fundamental insight is all those connections can grow or diminish in value at once — based on the context of the network vs. its competitors. Yes, networks rise in value and build gravity to draw masses to their center. But like a planet teeming with life that begins to pollute its own atmosphere, eventually all users long for a fresh start.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

Image: Neal Fowler

15 thoughts on “The inevitable disutility of networks (or why Facebook will fade)

  1. Ben,

    This whole conundrum – when do network-effect businesses seem the most ripe for disruption – has been on my mind lately. I think you’d enjoy Joseph Tainter’s book, the Collapse of Complex Societies. In it, he demonstrated that all societies reached a point where their investment in complexity (which is a measure of connectedness) eventually netted zero return for the individuals of that society. And once this happened, individual people had no incentive to support the complexity of their civilization (so people living on the fringe of the roman empire eventually said ‘why not’ to invading forces when they were being taxed at record-levels). Along those lines, you could argue that as Facebook continues to rise in complexity, with more connections and also more rules/processes/products/etc. people will eventually stop supporting that burdensome environment. Simplicity is sexy, especially when cast against the din of complexity.

  2. Failure happens due to lack of innovation. AOL, Friendster, Myspace & Second Life all died from lack of innovation.

    When the companies founders become comfortable and view their product as “good enough” this is where disaster strikes.

  3. Agree, but for slightly different reasons. Facebook has gotten boring, and not necessarily because a competitor has emerged. FB, like MySpace before it, has become spamville. Twitter (and IG) are interesting because there is less commitment to your “friends” and more chances for serendipity and random relevance, which is more stimulating and exciting than the same pics and mundane updates from my boring friends. (ok, they’re not that boring but still)

    Wait…I think I just proved your point. Damn, you’re good. Thx!

  4. I think these things have just increasingly become more personal. Email is behind the curtains; you have to be invited into a conversation. Facebook had, for a while, primarily tiny pieces of trivia: you like this movie, these are your favorite quotes, etc. Status updates brought Twitter to the party, where someone (or anyone) could get a quick snapshot of how you were feeling right now. Now, Instagram lets you easily and wordlessly show the world things you’ve created that you judge to be interesting and beautiful. Piece by piece, you are shedding your protection. You are standing naked in front of millions of people, so to speak. I think that’s interesting, and it makes me intrigued by what the future brings.

  5. Thanks, all. This is not to say that one network can’t survive … but a collapse toward a single platform seems inevitable. Or if we learn to lift our own social graphs, perhaps the network becomes detached from the ownership portals such as Facebook and Twitter who would like so much to lock us in.

    Bud, I will check out that book, sounds provocative.

  6. As always, thoughtful and provocative. A few things could happen. One, we could all migrate from one platform to the new flavor of the month constantly. But is that because we lose interest in the value of one? Or because there is always an appeal in what’s new. A second option is that we use these platforms, FB, Twitter, in modfied ways. For example, I’ve recently found Twitter a better search engine than even Google for certain topics, or when I need validation from a person, not an algorithm. Has been incredibly handy in that regard. In addition, if you use it beyond the echo chamber that it’s become, it’s still a great way to connect with people in other parts of the world (physically or intellectually) that is hard to achieve elsewhere. Finally, it’s also possible that the platforms themselves evolve. They could get into the content business, serve as added ingredients in a host of other kinds of content creators (starting now) and essentially become something other than what they started out as. As Amara’s law points out, we get both the short term and long term wrong. One thing we do know won’t change is that people want ways to connect to other people (unfortunately more often than not to like minded to simply mirror their own thinking, unlike the great editors and dare I say “curators” who served us up content filtered by quality and importance), and two, we want to participate, either by interacting or by creating ourselves. Great post as always. Sorry I missed you in person today.

  7. Interesting, but could FB not be that single platform? It is proprietary and opt-in, but then so was the yellow pages. Having an inclusive network is very beneficial, so long as FB remains a (largely) benevolent dictator

    I see the potential for FB to be the generalist social network that has, to varying degrees, the majority of people. On the edges, we then have the specialist networks (whether in terms of age, genre, form, content) that burn and fade.

    Everything dies eventually, but I reckon FB could have a long life

  8. Simon, that is a potential outcome. AT&T spent decades as the major phone system in the United States. And of course, then Ma Bell was broken up due to anti-monopoly concerns.

    Facebook has done a brilliant job of embedding brands within it (every FB landing page, er, fan page, is a further entanglement and advertisement for FB). And its Like button has disseminated its entry points across the web universe. It really is become a foundational platform. We’ll see.

    But still, if people can port their social graphs anywhere eventually, such stickiness will fade.

  9. It is late. I have so much to say and can’t wait to tweet this post Ben tomorrow. Facebook is dying. I have written about it many many times. today I blogged about it using Compete’s numbers. It is much smaller a group of active users than the media and vcs and gurus think it is and Facebook claims to be. I come up with maybe 25mil US users active each day.

    When people say they are too big I just say: netscape owned browsing. Yahoo owned search. Myspace owned social. Blockbuster owned movie rentals. AOL owned the internet. The list goes on and on. Really great post!

  10. I’m going to try to be brief because in typing from my iPhone. We have nothing but speculation that Facebook is “dying” verses reaching a critical mass plateau of sorts. 500, 600, 700 million users equates to a churn that we can assume leads to profile abandonment, “hyper sensitives” who restrict their profiles from public viewing (like me), and emerging market users who find limited use for it based on lack of personal network growth.

    Facebook has made a number of efforts to delay what we believe is the inevitable: ultimate decline in usage. They’ve addressed our patterns of digital nomadic behavior through pervasively distributing like buttons, carrying the Facebook experience outside Facebook itself assuring they exist where we consume.

    I read a statistic that one outbid every eight minutes is on the internet is spent on Facebook. At this point is it even fair to characterize then as a company that can succumb to the same downfall as MySpace or are they now worthy enough to be looked at with Google tinted lenses?

  11. Facebook is now the default social network. It is the first network to become default. It is the Microsoft of social networks. And hey look, Microsoft is still here. I think you assume that nothing evolves to meet user demand, and instead things evolve to piss people off eventually, as if that is inevitable somehow based on a long-enough timeline?

    People use instagram to take and share photos with cool preset filters. That isn’t an alternative to Facebook/Twitter. It is just another popular service.

    Nothing fades unless left to fade. If it fails to stay current, if it fails to meet user demand, then it fades. Case in point being why Facebook removed apps from newsfeed. They were spamming up the network and pissing people off. Good move Facebook. That is an example of how they didn’t fade, they reinvented the product.

    They test things to the fucking end of the Earth. They subtly test with small groups, analyse success, ask users what they thought etc.

    I don’t get why people seem to think brands try and tell people what to think? It’s really the opposite. There is so much research upfront to meet demand rather than create demand and then meet it….

    Most importantly though, Facebook was successful because it was exactly what people wanted. It had ZERO marketing. It spread by word of mouth and because people liked it. Still true today, and as it is now the default, people won’t leave it to go somewhere else just like that. They NEED it now to stay social and stay interactive with friends/communities, etc. If they use something else, it will be in addition to Facebook. However as the new secret sharing photos app by Facebook shows, Facebook is already developing its service and products to meet the user demands, and to do it better than say Instagram, etc. And they will do as they can tap into a massive existing network.

  12. What a great post Ben. It almost feels heterodox, or even illicit, to say the big F might not be around for ever. This is a great conversation to have. I can’t tell you if it will or not – but when I try and think about what people will say in 50 years time, in the sentence that will sum Facebook (or this period of FB) up in the year 2061 I have a feeling that people will say FB was a training camp, that it normalised social networking, that it paved the way for a whole bunch of still-evolving behaviours. Maybe some will make the point that none of this behaviour was actually ‘new’ – that all of it was deeply and innately human, ancient behaviour that, for many, Facebook was successful in ‘selling’ (re-introducing) to the world.

    I think people go through a curve with Facebook, especially if it is their first social networking experience. At first, it’s amazing. Then it becomes normal, and inevitably starts seeming basic compared to the richer and more nuanced types of networking experience that you stumble across/discover. Eventually, you realise it is merely an interactive address book – a fairly dull experience. Perhaps it’s greatest legacy will be to provide hundreds of millions of people with a login/access to a stack of new and more evolved experiences. I think the smartphone and app change everything for FB – suddenly it is just another icon – one of many experiences – on our screens, not the website behemoth it feels like on a desktop, and not at all like the one social graph and experience to rule them all.

    Facebook in a way is like an old media model of social networking. It exists to broadcast stuff at us. I think we’ll outgrow it – unless it can reinvent itself as fast as we all do.

  13. I read until,
    “The inequality of network links is the basic flaw in Metcalfe’s law, a hypothesis by the founder of 3Com”

    A law is fundamentally not a hypothesis.

    Unintelligent writing = lack of credibility.

  14. Jason, thanks. I promise I’ll tri hurder. Metcalfe’s “law” is actually a loose term applied by others to his hypothesis, but see your point.

    Tim, I love your description of our changing perceptions of social network tools. That more than anything could explain eventual fall-off curves.

Leave a Reply to Simon Cancel reply

Your email address will not be published. Required fields are marked *

* Copy This Password *

* Type Or Paste Password Here *