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Can Facebook Be Stopped? Network Effects and Social Networking

Article from [http://mashable.com/2011/08/31/google-growth-peak/]

When Google+ launched in late June, many of the more tech-savvy individuals declared the end of Facebook was imminent. Hailed as the next “it” thing, people on the internet fought desperately for an invite; eager to join the elite pioneers blazing the way to social networking 2.0. I personally was one of those people. Circles, better privacy settings, and hangouts were immensely hyped and I was actually excited to be part of something so revolutionary and new.

When I finally got there, I was greeted by basically more of the same: you still had your basic friends lists and circles were cool but nothing revolutionary. However, one thing was missing: people. And then I realized why Facebook is so popular: everyone was already on it. What is the point of uploading all those pictures from your vacation to Italy if only a couple of your friends are around to see it?

Facebook has over 700 million users who spend more than 12% of all their internet time on that one site. Although people may grumble about Facebook’s gathering of personal information in order to sell ads to them, people keep coming back because Facebook is big enough to exert a network effect over the entire social networking experience. This means that people will keep coming back to Facebook because their friends use Facebook, creating a positive reinforcement loop that allows Facebook to continue to experience growth despite having a population more than twice the size of the United States. Essentially, it becomes too much of a hassle to use an alternative when so much of the population uses Facebook. Unlike sites that rely on writers or new features to attract users, social networks rely on users to attract users, making it an ideal place for a monopoly, which the engineers over at Facebook have taken advantage of. Facebook has become so prevalent in our society that it becomes socially “odd” to not have one, even though it didn’t even exist until eight years ago. In essence, it does make sense. Why do people upload their pictures on Facebook? So their friends can see them. If Facebook wasn’t big enough to support your actual social network of real life friends, relatives, and co-workers, it would be useless.

And that is where Google+ is right now. Although registrations continue to rise, growth has become stagnant and total views to the website are down from their peak in mid-July. Google+ does not have the benefit of network effects. People do not want to take the time to slowly build up their friends list or slowly re-upload their thousands of pictures online. It is a perfectly functional social networking site, and it may technically be a better site than Facebook, but ask the majority of the 700 million Facebook users if they care. Odds are, they’re probably busy playing Farmville.

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