Networks

In class, we have learned a lot about information cascade and the adoption of new technologies by the public. We discussed the way that a new technology can hit one of 2 stable equilibrium. Additionally, we learned about the role that clusters play in the adoption of any new technology. Using this knowledge, we can analyze Google Plus’s attempt to infiltrate the market of social networking.

In this situation I consider two technologies, Google Plus and Facebook. As we learned in class, with two technologies like these there are two possible Nash equilibrium with regards to the adoption of the technology. The equilibrium are attained when people use the same technology. The scenario turns into a game that looks like this:

Google Plus entered the market of social networking sites over the summer. At the time it first began accepting members from the general public, it was very difficult to get an account. Google claimed that it was not ready to be released to the public and thus was not allowing just anyone to sign up. Instead, getting an account meant having to put in a fair amount of effort. This may have been an attempt by Google to build hype around their new product. Unfortunately for Google, this tactic did not work as within a couple months it became clear that Google Plus was not going to overtake the stronghold that Facebook has on social networking.

We learned in class that in order for a new technology to be adopted, it must be the case that given the percentage of users of the new product p, the payoff of using the new product g, and the payoff of using the old product f, p>(f/(f+g)). In the case of Google Plus, it is clear that either the payoff of using the product was not great enough or the percentage of people using the product was not high enough. Since the product was being released for the first time, there was no percentage of the population using the product yet. It is possible that in order to help spark the original burst of population growth, Google made membership somewhat exclusive. I think this strategy worked at least somewhat because I remember a lot of hype around getting a Google Plus account. However, whether or not this campaign was successful, it is clear that the payoff of using Google Plus was not high enough as it never caught on the way it could have.

At this point, Google Plus no longer has the “fresh” “new” appeal. Thus, in order for the product to be successful it either needs an incredibly awesome marketing campaign, or some highly original functionality that would push its payoff far and beyond that of Facebook.