How Facebook Became a Powerhouse Through Network Effects
https://www.wired.com/2012/05/network-effects-and-global-domination-the-facebook-strategy/
A network effect is any situation where every new user that joins a platform provides benefit to all users that already are a part of that platform. The network therefore gains more value for users as more people use it. In the social media industry, Facebook takes a lead by targeting people’s innate drive to project their identity and network to other users. As the user-base expanded, this network effect compounded into a bandwagon effect – nobody wanted to be left out from this platform.
This positive feedback loop of new users made Facebook a monopoly in the social media industry. As it had more opportunities for connections than its competitors, new users chose it over other platforms. “I think that network effects should not be underestimated with what we do,” explained Facebook CEO, Mark Zuckerberg, whose platform now has over 2.6 billion users, due to the clever play on innate human tendencies to not want to be left out (Vogelstein). This idea is further compounded by a professor at the University of Halle, who stated that “once a social network effect-based company gains a clear leading position compared to competitors, it becomes so clearly more attractive than its competitors that a winner-takes-all trend sets in. ”
This directly relates to the idea of a global friend network – it is unlikely that there will be any single person that is completely isolated and unconnected. Humans are social creatures, and huge network effects can have large impacts on how the world works. The above article further emphasizes this idea by highlighting that network effects play such a huge role in Facebook’s power that the company could perhaps overtake Google’s Search engine. As so many people are present on Facebook, Google feels threatened by the fact that there may be enough information on Facebook itself when it comes to searching for answers online.