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Why Facebook Keeps Beating Every Rival: It’s the Network (nytimes.com)
196 points by mgav 185 days ago | hide | past | web | 199 comments | favorite



It's hard to build a customer base when Facebook can just come in, copy you, and corner 95% of the market on the day they release.

This is the exact same advantage that Microsoft had in the enterprise market. Sure, competitors could release enterprise products and have some success, but if Microsoft decided to copy you, they had an army of enterprise sales agreements already in place and would eat 50% of the available market in the first year. The network effects of their enterprise sales channel -- which existed at nearly every company in the world thanks to the ubiquity of Office documents -- made it very, very difficult to compete with them for a long time.

Network effects are much stronger in the consumer space (mostly because the consumers are poorly educated about their choices, and often have little incentive to become informed). Which is why we're seeing Facebook eat the world when it comes to consumer communication platforms.


Your use of the term "network effects" is a touch loose. Network effects refer to a situation where the product becomes more valuable with more users. This is not the same as simply having a large customer base. Probably the better way to say it: "Microsoft and Facebook both gained advantages because their customers had high switching costs."

FB users have high switching costs in terms of opportunity costs (by leaving FB they forego value) and those opportunities costs are large mostly because of network effects.

In the case of Microsoft, you say "network effects of their enterprise sales channel," when you really mean Microsoft had a large customer base to which they could quickly and easily deploy new products. The fact that one business had a sales agreement with Microsoft didn't necessarily increase the value of a sales agreement with Microsoft for a different business. (Maybe there are some network effects there, but they aren't obvious and I'm fairly sure you aren't talking about them.)

I think Microsoft did (and still does) benefit from network effects in a different way, related to collaboration: the more people who can open and use an excel spreadsheet, the more valuable it is to learn and use excel.


Worth noting that there's two axes here as well:

- Positive vs. Negative

- Same-side vs. cross-side

Network effects can be negative: if more people dine at your favourite restaurant you have to wait longer for a table. That's a negative same-side network effect. The reverse is true for facebook: more people signing up means more people to socialise with.

When you add in app developers, then cross-side effects come in to play. More people using facebook is a positive cross-side network effect, because more users == bigger market for developer apps. It's mutually positive too: more developers means more apps, more choice etc. For advertisers, the cross-side network externality is only positive from their perspective: they like having a larger audience to advertise to, whereas users generally don't like ads.

All of these combine to make facebook one hell of a sticky, and lucrative platform.


I don't think anything you're saying is untrue, but I do think you're ignoring how shady and unethical Facebook is when they feel like it.

For example, they downgrade YouTube videos in people's feeds. There's no reason for that if they have a better product.


> Network effects refer to a situation where the product becomes more valuable with more users.

Which is the case with windows. Because the product has more users it becomes more valuable to developers/business, which then becomes more valuable to users.


Well, that's the thing... Microsoft wasn't selling directly to these companies. They had a network of resellers and system integrators. And basically, outside of a few niche industries, businesses basically had to use Microsoft by default. Once these system integrators were in, they would use those relationships to push new products -- because Microsoft. The more customers, the more product categories they own, and the more system integrators using Microsoft. It feels a lot like network effects to me -- but I think I was using a broader view of their non-consumer sales strategy (Ballmer was a freaking genius in this right -- just not so much as a product guy).


The thing about Microsoft is that even in death they still rule the roost.

95% of the office workers in the developed world are still sitting in front of a Windows PC, logging into an AD, doing stuff with Office, etc. Every significant business has an EA or Select Agreement.


Microsoft is far from dead, and under Satya they've actually found their feet again :)


Why are you smiling about that?


I'm just a happy person ¯\_(ツ)_/¯


In death? The company is a major presence with billions of users across the world. They are not dying.


Yes. Tech entrepreneurs need to be very wary of platform vendors. You can and will be NetScaped. Why give away a web browser for free? Because it gives Microsoft instant dominance over the web. Platform providers work very hard to maintain their platform because it allows them to control consumer attention.

Big tech companies will only acquire companies that bring something to the table that they can't get by locking 4 of their own engineers in a closet for a year. That means a brand or patents. Any software-based tech can be copied for around a million bucks without much issue.

The other thing here is that in cyberspace, the effects of the network are enforced only by artificial legal barriers like the CFAA that make it a felony for users to contact web sites in a manner that the operator dislikes. The CFAA essentially takes the ToS (and sometimes even less; just an operator's expression that he no longer wants you to access the site can suffice the CFAA's standard of "exceeding authorized access") and evals it as part of the criminal code. This is the law under which Aaron Swartz was prosecuted.

Facebook has invoked this power repeatedly, most notably against Power Ventures, which was destroyed in court for allowing users to export their own data only, the data in which they have an exclusive copyright interest. Power infringed Facebook's copyright because it downloaded a page into RAM (RAM copies that exist for milliseconds are eligible for copyright protection per MAI v. Peak) that contained Facebook's IP in order to extract the user's information.

It's why you never see third-party exporters and have to rely on the crappy ones that Facebook/Google offer and bury so they can avoid flak.

Things would look much different if our law wasn't so thoroughly committed to entrenching the extant digital players. There's no reason that another application should be legally restrained from multiplexing/multicasting one's Facebook feed.

IANAL.


With Snapchat facebook isn't attacking with its network. It's cloning their features, but failing to actually get the very young demographic network.


Yeah, it's interesting. On the one hand, they're slaughtering the market value of of SNAP because that's based on them becoming the next Facebook-sized behemoth.

However, they're ALSO preventing a bunch of old farts like myself from signing up for Snapchat accounts so I can put mustaches on every car that drives by, and preserving it as a "cool" haven for "kids these days," thereby increasing Snapchat's value to its existing userbase.


(Anecdotally) That is correct, they are avoiding Facebook at all costs because it is for "old people"


Young people avoid the timeline because it is for old people and mostly public. Facebook knows how young people use Facebook. It is in ways you don't see. It's Messenger and private groups


Facebook also aggressively acquires competing brands that target a different/younger demographic, like Instagram.


Also anecdotal, but this past Thanksgiving I got into a chat with two nieces and a couple of their friends, all in the late-teen range.

They're really concerned about the amount of information these big data stores have on them.

They're worried even more that there is a government snoop checking in on them or another unknown.

Personally, I have gotten more and more leery of putting data online. I deleted my Facebook 7 years ago. Twitter is strictly read-only for me. I share kid pics directly with family via private storage I control.

Really needs to be a peer-2-peer suite of "social" tools that cut out middlemen as much as possible.


My daughter, who's 7, has asked me if she can have snapchat. I've never mentioned it to her or even used snapchat, so she must have picked it up at school. I don't even know if she knows what Facebook is.


Likely. My nieces (ages 5 and 8) LOVE the filters on Snapchat. We call them "funny faces". Snapchat really captivates young people.


Yep, I said what I said in the OP because my sister (11) asked me if I had snapchat (to which I replied no, but then grudgingly signed up).

Had she not been using it I would have written it off as confusing UI and "what's the point."


I suppose I'm a "young person". I prefer Snapchat because you can be yourself. It's private by default. There's no pressure to post amazing things. I often just post almost-spam crap that my friends and I find amusing - like doodles, bad selfies, a picture of a cool carpet. It's easier to avoid showing off - which I really don't want to seem like I am. The filters and drawing features make it easy to add info to a picture (location, temperature, pointing out things, etc).

I avoid Facebook for many reasons. You have to be careful about who your posts are seen by. It's public by default. I have colleagues, family, and people I've met just once or twice on there. Any posts I make need to be inoffensive and anodyne. Scrolling down a Facebook feed fills me with FOMO, jealousy, rage, or other negative emotions. It's obvious they don't actually want to improve the core product. I feel used.


If Facebook has an Achilles heel, it may well be privacy. Just as Security was first sign that the tide was turning against MS, so might privacy become for FB.


They aren't avoiding Instagram and Messenger though - which is also Facebook.


They are defending with their network, to prevent people from leaving for SnapChat.


Not really true, pretty sure Instagram is catching up fast on that sub-set of the market.


As with all things, this advantage will wither. I heard Milton Friedman once say something along the lines "There has never once been a natural [not the result of government action] monopoly that stayed a monopoly for very long." People just need patience and faith in the free market.


Friedman simply made that assertion. I basically believe it, but like so many things in Economics it's true in theory yet of limited value in practice.

First of all, on human timescales (i.e. lifetimes) monopolies can be very long lived. The Standard Oil Trust was very destructive for decades, and though it might have collapsed due to natural causes, that destruction could have lasted for decades more. Which leads to the second problem: those long periods of stagnation are multiply destructive: not only do the victims pay a premium (which they could have spent on other goods), the monopoly's existence retards innovation.

The final irony in the case of Standard Oil is that is was worth more to John D Rockefeller after being broken up than it was when integrated. The government did everyone a service by breaking it up.


https://en.wikipedia.org/wiki/Standard_Oil

"In 1904, Standard controlled 91 percent of production and 85 percent of final sales. Most of its output was kerosene, of which 55 percent was exported around the world. After 1900 it did not try to force competitors out of business by underpricing them... Due to competition from other firms, their market share had gradually eroded to 70 percent by 1906 which was the year when the antitrust case was filed against Standard, and down to 64 percent by 1911 when Standard was ordered broken up"

sounds like if you stop trying to compete other companies will


What do supposed compelled Mr. Rockefeller to choose to cease his practice of driving competing companies out of business? Some sort of personal awakening?


No. They were fully conscious of their position, in terms of economic power and monopoly. The Sherman Anti-trust Act was passed in 1890. They no doubt believed they had accumulated enough of the market to sustain dominance, while the overall pie continued to expand.

Rockefeller paid ransom sums for decades to buy out competitors (most of which were junk operators at best) to keep them from tanking the price of oil by dumping new strikes onto the market (a very frequent occurrence). His entire goal was oriented at market share + stability. The history of oil prices back then, was truly horrific, it was a constant boom and bust cycle that tortured most companies in the oil sector. Once Standard Oil accumulated enough of the market, including distribution (not as often talked about, they overwhelmingly controlled distribution), it could heavily control market pricing without having to own all the market. Their dominance in distribution is arguably the single most important thing they accomplished after the refining consolidation. With that gatekeeper status, they were able to demand other firms they didn't own adhere to their pricing levels, or have their distribution access cut off. In that way, they figured out how to stabilize the market pricing, without having to continue to own ~90% of the refining market.


I never get the impression that people who think government intervention is good have done much research on the topic.


This will be a relatively quick and dirty skim over history, but I hope it does something to dispel this belief. The comment you're replying to ignores a number of salient factors. It assumes that natural market activity resulted in Standard Oil's declining market share. It certainly was a relevant factor, but the overarching history of Standard Oil will hopefully lead you to recognize that it did not act alone.

The Sherman Antitrust Act was passed in 1890 but it was a toothless tiger until Roosevelt assumed the office of president in 1901. Prior to then, the main case involving the act was successful in using it against labor unions. Following 1901, litigation broke up a number of companies. This is important.

Investigation at the time indicated that Standard Oil employed predatory pricing up until 1900. Following 1900, they resorted to a shell-game to obfuscate what was going on.

Amongst the first wave of anti-trust litigation targets were J.P. Morgan's holdings. He was cornering the railroad and steel industries successfully, the biggest coup being the formation of US Steel in 1901. The other crown jewel in the strategy was oil, namely Standard Oil, which operated synergistically with J.P. Morgan's holdings in rail and steel. During this time, we had characters like Elbert H. Gary, CEO of US Steel, who held cross-industry dinners aimed at setting uniform pricing for steel and providing management across businesses with consolidated positions against labour organization. While it had been growing at a steady clip beforehand, Standard Oil's value began to skyrocket as of 1901 with no real change in its core business practices.

The SCOTUS' exposition of the issue does a great job showing how Oil's monopoly was mediated in large part through Rail (the case also indicates that practices wrt pipelines were analogous to rail):

"the bill alleged that the combination and its members obtained large preferential rates and rebates in many and devious ways over their competitors from various railroad companies, and that by means of the advantage thus obtained many, if not virtually all, competitors were forced either to become members of the combination or were driven out of business"

Can't transport oil if you don't have rail cars. Can't build rail cars or rail if you can't make steel, and you can't run your trains or your steel plants without oil.

In 1902, the Roosevelt directed the AG to commence litigation to break-up of the J.P. Morgan headed railroad trust - Northern Securities Company. This matter was such a high priority that the case was resolved and reported through all levels of appeal in 1904. As a side note, this is mind-bendingly fast for competition litigation, even today.

With the threat of anti-trust litigation preventing outright predatory pricing and "competitive" rail back on the table steel and oil began to lose their moats. But "competitive" rail wasn't very competitive, and continued a legacy of providing obfuscated sweetheart deals to Standard. They got broken up 7 years later as a result. By the time steel's litigation hit in 1920, it had proper competition and did not get broken up.


Or in the words of John Maynard Keynes: "In the long run, we're all dead". Which means that fixing things "in the long run" is not ideal.


I dont want to go look it up to verify and properly link a citation etc, but I think Schumpeter argued that monopolies are actually good for innovation, at least of the (what's the term?) big bang, fundamental kind, because in a highly competitive marked you can't afford to set aside a significant % of budget for fundamental r&d that's only going to pay off in the very long term and not get outcompeted in the meantime.


"People just need to have patience" for how many generations?

Standard Oil was a monopoly for over 20 years. There are countless monopolies that have gone on that long or longer, only to be broken up by government eventually.

I love the free market, but between regulatory capture, legal costs, and aggressive pricing structures, monopolies can be absolutely unbeatable within the career lifetime of any person.


Yea, its certainly still al ong time, but I wonder why anyone feels the need to try and beat a monmopoly when they are at their best? I don't think the wider consequences of eagerly busting monopolies will be positive.


Government intervention definitely creates monopolies, like in the case of telecom companies or pharmaceuticals.

But it seems many aspects of capitalism lend themselves to winner take all mechanics, resulting in large companies (airliners and telecoms and entertainment companies) constantly merging and reducing competition. So without the FTC, we might have even more monopolies. Without these laws, Microsoft would be the only PC company (MS bailed apple out to keep some "competition" around) and Intel would be the only manufacturer of CPUs (likewise for Intel and AMD).


Well yeah. This is the "natural" monopoly that Friedman referred to (and dismissed). From the Mother of All Wikis:

"Natural monopolies arise where the largest supplier in an industry, often the first supplier in a market, has an overwhelming cost advantage over other actual or potential competitors; this tends to be the case in industries where fixed costs predominate, creating economies of scale that are large in relation to the size of the market, as is the case in water and electricity services. The fixed cost of constructing a competing transmission network is so high, and the marginal cost of transmission for the incumbent so low, that it effectively bars potential competitors from the monopolist's market, acting as an early insurmountable barrier to entry into the market place."

There's a good argument to be made here they all software sub-markets are natural monopolies.


Who can say what would have happenned long term? My assumption is that a true monopoly is not sustainable, but I could be wrong. I don't think the evidence is there that microsoft would remain king for long.


Facebook may be at their best, but I can still imagine the possibility of a better social networking experience. At the very least, a for-pay service where users (rather than advertisers) are the customers could result in a better product.

But we'll never know, since nobody else can reasonably enter the market.


In this case, it's hard to see the problem with facebook being broken up. Who, exactly, loses?


> In this case, it's hard to see the problem with facebook being broken up. Who, exactly, loses?

No one except Zuckerberg, I'd think.

However, it raises an interesting question: how exactly would you break up an entity like facebook? It doesn't seem like a business that would lend itself to subdivision.


Just as Microsoft was required to open up its Win32 APIs, one possible remedy here would be for Facebook to be forced to allow users to receive/make posts from/to their Facebook friends on any competing site, and allow people to log into those competing sites using their Facebook accounts (using a single sign-on system like OpenID Connect / OAuth 2.0).

That way each competitor could offer its own interface and algorithm for filtering people's feeds, and show their own ads (or offer a competing business model). If users opted to have their posts on the competing site automatically sent to Facebook (so their Facebook-only friends could still see them) then Facebook would be free to data-mine those posts still.

The next question is, could someone code a browser extension or other tool which makes this possible without needing any changes from Facebook's side? If it would break the Facebook terms of service, would someone crowd-fund the anti-trust lawsuit to override those terms?


People have tried to just "code around" these centralization issues, but Facebook/Google have a lot of developers that can put a lot of time into identifying/rate-limiting/blocking unauthorized use of their API's. Nothing has been able to get past the "but does it work almost all the time" barrier that those engineering efforts put in the way to technically circumventing centralizaiton.


Geographically, like a phone network.

Then mandate interoperability with an open standard, like a phone network.


> Geographically, like a phone network.

I don't think that makes much sense for breaking up something like Facebook.

Unlike a phone network, Facebook's service is not rooted in geography. Yes, it's users have homes and geographic locations, but those are just arbitrary account attributes, just like their name or if they like the Denver Broncos. You might as well have one post-breakup company start out with all the A-M accounts and the other the N-Z accounts.

If you had to divide up the users between N successor companies, I'd probably be best to do it based on friend-graph connectivity, with mandated interoperability between them. That might make the successors sticky enough to survive.


There's a high correlation between geography and social graph, while the part of the social graph that gets "cut" will give an incentive to make interoperability work, as people will care about it.

So your premise is true(ish), but the conclusion can't be drawn from it (and your comparison falls apart) because we don't need strict dependency on geography, only a (relatively strong) correlation.


Why not make an open soure alternative? How much do you hear about blogger.com and livejournal after Wordpress came out? How much do you hear about AOL after the Web came out?


They've already tried. But the biggest thing about social networks is that they really only work if the people you want to be connected to are there. Diaspora was an open source social network, and it went nowhere. Ello was supposed to be a social network that didn't sell your data, and they ended up not being able to make it as a social network. They're still around, but they've pivoted a little.


Because there are open source alternatives. Nobody uses them. Nobody used google plus, and that was a realistic replacement.


Oh yeah? Please list the top 3 alternatives which are open source.


GNU Social, Diaspora, and Friendica


The consumers, no? They get inferior products. Who wins? Seems like its just people who want a piece of the pie, and do they deserve it? Doesn't seem like it.


I'd argue Facebook's purchase and integration of other products is what made them inferior.... How exactly does facebook owning instagram and facebook help the consumer? They didn't need to buy it to integrate it into feeds, and that's not how most people consumed instagram anyway.

Hell, the main benefit I see to instagram is that their geotagging improved immensely.


How is it worse for the consumer, though? I don't see how, under capitalism, its even possible for an abusive company to maintain a strong position.


> I don't see how, under capitalism, its even possible for an abusive company to maintain a strong position.

Network effects. Together everyone hates it; individually, there is nowhere else for people to go without losing the majority of your social network. Facebook has people; its software is utterly irrelevant to why people use it.


There's nothing about that action which would imply that consumers would get inferior products.


"But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again. "

John Maynard Keynes


You are correct, but when somebody quotes Milton Friedman and says things like "have faith in the free market", you're probably not going to change their mind with a quote from Keynes.


The point is not to change their minds, it's to change the mind of anyone who may happen to read both quotes.


Whys that? Is that an offensive thing to say? You seem to think I'm incapable of changing my mind, why? You don't know me, and you think you do. Unbecoming behavior.

EDIT: And downvotes, too? I've been insulted, and I don't take kindly too it, yet I deserve to be downvoted? Thats ridiculous.


Keynes: "the market can stay irrational longer than you can stay solvent" which I think speaks to the frustrations of the current line of entrepreneurs.


I like the free market and I think letting the free market do its thing is a good default solution to a wide range of problems.

I don't have faith that the free market will solve any problem well if we just wait long enough though. Nor do I believe that it's wise to just sit around and refuse to fight injustice because the problem might solve itself out in 50 years.

In this specific case, I think the network effect of social networks (ie it only makes sense to use a given social network if the people you want to communicate with use it as well) is so strong that the unregulated free market is not a good model to solve that problem.


it is government action that keeps Facebook monopoly!!! Facebook, Inc. v. Power Ventures, Inc. https://en.wikipedia.org/wiki/Facebook,_Inc._v._Power_Ventur....


FYI, HN seems to be mangling the link by excluding the final period from the link href.

en.wikipedia.org/wiki/Facebook,_Inc._v._Power_Ventures,_Inc.


Isn't Patience the problem? It will give enough time for these monopolies to rack up money and establish dominance and driveaway several upstarts.


That's about as qualified a statement as you can get, that is no doubt true in the alternate universe where no government exists.


Is there really a free market? Electric vehicles were squashed for a long time because oil wanted it to be that way.


The smart phone is what made electric vehicles practical. That solved the chicken or the egg problem as it pertained to batteries cost & battery manufacturing scale.

There was no scenario under which the electric car was going to take off until lithium batteries were radically cheaper and available at truly massive scale. Mass market consumers do not want to drive EVs that get 50 or 80 mpg equivalent and cost $50,000.

Tesla came along only when it was finally becoming possible to do a nice EV thanks to falling lithium battery prices, at a low enough price point that well off consumers could afford them. The rest is history.


> Electric vehicles were squashed for a long time because oil wanted it to be that way.

Could you explain a little more? I have not heard any credible evidence to support this theory.


Also, I don't see why a monopoly is inherently bad. If consumers actually benefit from it then what's the rationale in breaking it up? Moreover, sectors like social networking naturally favor monopolies; it's no good if your friends are scattered around 10 different sites.

The current understanding of US antitrust laws is similar. The Justice Department pursues antitrust actions only if the end consumer is being hurt.


Monopolies maximize profit by setting a price greater than the market clearing price, causing a lot of unmet demand.


Except that price must be below what competitors will offer.


No. This is the problem with monopolies. They use other advantages to win markets without competing on price, features, or innovation. It's harmful to consumers.


A monopoly by definition has no competitors.


Yes it does! It has all the competitors that could and would be started if prices rose.


You're counting hypothetical competitors? So how do you propose measuring how many competitors there are in a particular market? With that definition, there are an infinite number even if I can currently purchase from only one vendor.


> It's hard to build a customer base when Facebook can just come in, copy you, and corner 95% of the market on the day they release.

Not really. Snapchat is getting copied because its functionality enhances the strategic value of Facebook's core assets. There are plenty of other businesses that would be easy for Facebook to copy technologically, but doing so would undermine the value of Facebook's core assets. Basically Snapchat brought a knife to a gunfight, with the expected results.


Which is why Facebook can just leverage their login system to see when another site has a viable userbase and then just add the feature to Facebook. They're doing it with GoFundMe right now.


The nature of Facebook makes it also far more easier to release and distribute new products. People come to your service every hour -- on the other side none (should have) wanted to visit Microsoft's homepage, which makes the enterprise agreements a necessity, that doesn't scale (by any means) as well, although MS managed to scale pretty well.


Almost makes you wonder if there isn't a very strong anti-trust case here.


On what grounds? Simply being a monopoly isn't grounds for anti-trust action. It requires some sort of anti-competitive behavior.

Now, one could posit an argument to the effect that monopolies in areas that are highly subject to network effects are inherently anti-competitive. But AFAIK that would be a rather novel argument and it's hard to say what the remedy would even be.


It seems to me they are leveraging their monopoly position in one area to dominate competitors in other areas. IANAL, but isn't that the very reason antitrust exists?


Anti-trust is tricky and depends on defining the markets, defining what constitutes a monopoly, the barriers to entry, etc. Is Facebook in a different market from Snapchat or are they all part of a general "social media" space?


"news feed social media" vs "pictures social media" vs "augmented reality social media" vs "virtual reality social media". Facebook should want competitors tbh. Even if Peter Thiel manages to convince Trump to tell the Justice Dept. to back off, I doubt the European Commission will agree.


Facebook also has the data. They see at first glance any uptake of a new social network of any kind. They automatically prevent sending invite-links or even just invite text messages via FB posts, FB chat, WhatsApp. So if you try to reach all your friends and try to invite them, you can assume only a few will even see the post in their newsfeed, get the chat post - it's like shadow banning posts. They create a filter bubble for you.


Yea, in order to compete with FB in the social network space you basically need a service that would somehow break Facebook's entire model to copy. It's one thing to add a feature but entirely different to break your entire mode of operation.


You should checkout how Tencent build its empire in china from QQ. That's more like where facebook learned from.


Do you have any articles about this? I'd be interested in learning a bit more about the history of Tencent.


This is true. I'm curious if Microsoft Teams would/could do this to Slack.


This might not be a popular opinion here (so please reply too if you intend to downvote me), and I might be biased because I just came back from F8 Dev Conference yesterday, but I don't think the reason Facebook beats a lot of rivals is network effects, it's because of Zuckerberg. He runs a very tight but organized ship. Let's be real, before facebook and all this stuff, mySpace had incredible amount of network effect and market share for those days, as did friendster (for that era of technology). Twitter had a network effect (albeit, an interest graph not a direct network of friends) and it is not doing well at all, even in areas where interest graph network effects should come in and dominate. You get my idea. I might be biased here because I got a small few minutes to converse with Zuckerberg at F8, but I think calling things simply "the network effect" and being done with it as to why facebook is so successful is a bit disingenuous, it's network effect + right leadership (aka Zuckerberg and to a lesser extent Sheryl). A lot of companies had network effects before facebook and didn't manage their advantage properly. Mark seems to be the overseer of all decisions at facebook and so far almost everything (except for crushing Snap) has worked flawlessly. It remains to be seen what happens with Snapchat.


Facebook Work was marketed as the best thing since sliced bread but I yet to see it making any waves for example.


Actually you're right. I can see this being one of facebook's bigger high profile flops. After talking to the "Facebook at Work" team at F8 (very very nice people), I thought that they might be in for a rougher time getting their corporate product to compete. According to what I understood, the project is a satellite product being developed in the UK offsite from facebook's HQ in Menlo (and as a result absent from the real leadership's radar). It seems like it will be difficult for them to really penetrate into the non-consumer space without direct line of leadership from upper management like Zuckerberg. This product seems more of an experimental "throw at the wall" and see if it could potentially stick. I am going to agree with you here and say likely no.


What company only has successes? Seems pointless to try to extrapolate from a single failure.


Facebook has tried a lot to copy snapchat, even released atleast couple of apps that i'm aware of but failed. Eventually they started to copy features of snapchat in Instagram, Whatsapp, messenger and facebook app. Heck now you can send snaps in Instagram. Not stories, snaps. that is fucked


Wasn't Facebook paper the failure?


A few large companies are moving to it, but don't forget how long the corporate sales cycle is for this type of thing. We'll only know if it's a flop in 3-4 years.


It's currently free for early sign-ups (like my company), and then they've moved the payment timeline to now October

> Billing will start on October 1, 2017, with the first bill issued on November 1, 2017.

We probably won't continue even at $2/user/mo, only about ~10 people use it and mostly just to post industry stories and/or press writings about our company.

For it to be viable (for us), they need to add in meetings a-la Google Hangouts, clone Slack, encourage employees to "Go Live" at events we do.


The elephant in the room is... are people "switching" to Snapchat a thing? Is Facebook winning a war that wasn't fought?

This sounds like somebody planted a seed of FUD about snapchat that ignores what's a bigger question in my mind -- are the users who typically choose Snapchat now choosing Facebook?

I don't believe alot of Facebook narratives. Most of the people in my social circle count as part of their 1B messenger users, but all of their substantive communication is happening on iMessage. When you have billions of users, it's hard to make definitive statements about network effect, as even small variations are big. Facebook's network effect doesn't seem to have as much mojo as Microsoft or AOL did in the old days. Hell, AOL had millions of people paying $20/mo for a decade for nothing.

Per Google, they have 1.86B monthly users. Per this article, Only 60% of Facebook users use messenger, Only 1/3 of Facebook users use instagram, Only 1/3 of Instagram users use stories. That's pretty telling to me, especially considering all of the ways they trick you to click on things and gin up the numbers.


As I mentioned in another comment, joining Facebook is something that just isn't a good idea for young people. The network that is praised as the primary reason Facebook is successful in the article, does more damage to someone's future than gives them benefit in the present. Schools and Colleges running checks on Facebook for anything negative about them, finding one student and following the network for other, has affected some of my friends. As has employers and work experience checking Facebook. 'The Network' also means that family are suggested to friend you almost immediately; I don't need to explain the problems with that. Snapchat is a safe haven for creative, throw away content that isn't indexable, searchable, doesn't have a social graph or a permissions model.


First, the idea of a school running checks on Facebook sounds pretty comical to me. Your schools are definitely over-funded if they have the time and resources for that. I went to a school that is the topic of several public groups on Facebook, including a satirical web-comic that was run by a student for many years.

But more importantly, do you realize nobody forces you to post or share anything? And even if you do, it's very easy to restrict permissions to a few selected circles. Your family members send friend requests? Fine, add them to the "restricted" list. A lot of people (me included) have stopped using the main newsfeed, and I notice that most of the picture sharing is done on Instagram nowadays, but it's still a convenient tool, especially when you have friends on every continent. And it's really not that hard to keep things private.


I completely agree, and see this narrative gaining traction, at least in my social bubble. When enough will point the emperor is naked, the same network effect will make facebook into the next myspace.


The idea that Facebook has beaten Snapchat just because they've cloned features is such a weird proposition to me.

Facebook's problem is not that they don't have features, it IS the network that is stopping kids from signing up. Snapchat is a safe haven for creative, throw away content that isn't indexable, searchable, doesn't have a social graph or a permissions model.


Put differently, the truth is actually the opposite of what this article argues: the vast size of Facebook's network is the biggest threat to their existence. Many people I know are ditching facebook because its become too large a social graph- why would I post something edgy to a network that includes my parents?


I fully get that this feature just isn't surfaced very well ... But I don't understand why this isn't facebook's biggest priority, to make their extremely robust permissions system easier to use. As lame as it was in general, G+'s "Circle" feature was really well thought out. I should be able to put all my family in one group, my drinking buddies in another, and my coworkers in another ... and then I can freely share whatever I want with whomever I want.

I've also had plenty of people not trust the permissions. Like, posting pictures from a party, people will freak out when I tag them ... and even when I tell them that I've locked down the album permissions, they don't trust that some error down the line won't expose everything.


> I should be able to put all my family in one group, my drinking buddies in another, and my coworkers in another ... and then I can freely share whatever I want with whomever I want.

This is basically what people use private groups for. It feels more intuitive than posting everything as a standard post with restricted permissions.

> I've also had plenty of people not trust the permissions. Like, posting pictures from a party, people will freak out when I tag them ... and even when I tell them that I've locked down the album permissions, they don't trust that some error down the line won't expose everything.

No offense, but they may also not trust that you've configured the permissions correctly, or that your definition of "locked down" is one they think is appropriate for the photo or will be appropriate for the photo in a year or ten years.


> No offense, but they may also not trust that you've configured the permissions correctly, or that your definition of "locked down" is one they think is appropriate for the photo or will be appropriate for the photo in a year or ten years.

None taken, that's a good point ... upon reflection, I'd probably feel just as hesitant about someone else doing the same thing.


> This is basically what people use private groups for. It feels more intuitive than posting everything as a standard post with restricted permissions.

+1 for this. (My Anecdote as a 23 year old) Everyone posts/looks to/at snapchat. Most use instagram (but only post public stuff rarely as it is for "high quality stuff" which tends to follow the 20/80 rule (20% of the people post 80% of the content (I haven't posted in months))). Facebook groups/messenger are also used by most of my friends for casual group chats and planning events as you can find anyone and it is more private. Facebook news feed/Instagram stories/twitter are used by less than 10% of people I know.


The sad thing about G+ is that the team took an important feature -- different social contexts -- and ad-centric Google sabotaged it by trying to enforce official-name crap and one-identity-to-rule-them-all.

The reality is that humans want different sub-networks AND different identities to be within them.

I mean, just look at us here on HN: It's so separate from Facebook that it's an entirely different site, your comments here won't ever accidentally show up on Grandma's feed... yet most people here still prefer pseudonyms.


I used to use FB more but now I keep it just for censoring information about myself. I think there are quite a few people who are there just for that reason.


I really like the way Randall put it: "a company trying to become the Walmart of social interaction... eventually becomes the Walmart of social interaction"[0].

By having so many different people from different circles all ready to receive whatever you blast into the social space of Facebook, you either have to really water down your ideas or constantly put out fires.

As CodeCube said in this thread; despite all the problems with Google+, the circles idea of sharing different posts with different groups was something I really wanted as well. Too bad only tech enthusiasts picked it up...

[0]:https://xkcd.com/1320/


> why would I post something edgy to a network that includes my parents?

That question really answers itself.


I don't know how anyone could think of content on facebook as being indexable or searchable. Search is still aweful


Search for users is bad, but the data is indexed and that index is being used and sold behind the scenes all the time.


I don't know anything about it, but how is it known that this is not the case with Snapchat as well? (I realize you're not the OP in this comment chain, but still.)


I assume it is the case with Snapchat, I don't think you can build a service at that scale without collecting some kind of data. The difference, I think is two-fold. We know that Facebook collects, analyses and keeps data and when you use Facebook it feels like it. The other difference is that Snapchat doesn't use that data to make a people or thing recommendation engine, which is what turns people off about Facebook.


Fair answer! I don't use either myself so your perspective on it sheds a lot of light. Thank you.


It's more about that Facebook content is forever. Users know others can see their post years later, causing people to be less willing to use the network.


It's also culture: Facebook is data-driven and experiment-happy in a way I haven't seen at any other tech company. Everyone at the company wants to minimize red tape and heavyweight process, and it really shows in how quickly Facebook can develop software and in how few developers they need to do it. I've worked at Facebook; I've worked elsewhere. There are real lessons everyone else should be taking from FB's engineering culture.

Managers at other companies give lip service to developer velocity, but in the end, they still end up creating the same kind of bureaucratic slowdowns that have hobbled the industry for decades, mostly because they can't let go and delegate real decision-making power to ICs. It's "Yes, we care, but bullshit, so we need process" over and over, stomping on the face of human ingenuity forever. Facebook means it when they say they care about developer productivity and code velocity, and that should terrify everyone else.


what the f... does "culture" have to do with FB vs Snapchat. I get it, they copied the functionality fast but only because it was a twist of what FB already does not because FB-engies were the best in town but because it was too easy.


The point OP and a few other hapless souls in this thread are trying to make is that HN's all-consuming hatred for FB and Zuckerberg (irrespective for whether or not it's justified) blinds them and prevents them from giving credit where it's due.

There's rarely a single reason for the success of a big beast such as Facebook. Many older social networks had a 'network', Google Plus had good engineering and design... but HN's disdain for all things FB gravitates them towards choosing the least charitable reason so that they can minimize the credit that Zuck et al need to be given.


If you think it's easy then you haven't developed consumer applications at that scale and quality before. It shows in how you dismiss the process.

There's copying and then there's copying well and fast. Copying isn't bad in and of itself - not at all.


I always cringe when a developer uses "scale" as intimidation tactic for why "my code is better than your code" and if you believe that only a handful of "facebook engineers" are the gods of scalability then you should probably switch careers.


No one said any of those things. And if you don't understand why scale matters then you simply don't have experience with it. That's fine. I don't think there's anything useful here for either of us to gain by continuing this conversation though - you seem to have your mind made up and you're clearly angry for seemingly no reason.


> No one said any of those things

>> If you think it's easy then you haven't developed consumer applications at that scale and quality before >> And if you don't understand why scale matters then you simply don't have experience with it.

cringe


1. I didn't use scale as an intimidation tactic as you purport. Scale is one engineering requirement that makes tasks either harder or more work than if it weren't a requirement. Scale isn't only in terms of # of users or how much hardware you need to support those users. Scale also refers to complexity of product. When introducing a new feature, there are all of the considerations you need to make in order to integrate that feature into the existing product system. You seem to think both sides of scale are easy to execute flawlessly, and that sentiment can only come from someone who hasn't worked with these constraints before.

2. You said that I think only a handful of Facebook engineers are the gods of scalability. I never said this. I simply intended to give credit where credit is due. They executed extremely well (in my opinion) and they deserve credit (in my opinion). Also - engineers are not the only ones who help scale a product through infrastructure. As I mentioned before, there is also product architecture that needs to be considered when introducing a new feature. The larger question becomes How does this new feature work to provide value in the context of all of the other things that X does?. For something as complex as Facebook or Instagram, this is hard. A very simple example that illustrates this is user education. It's far different when you have a few users on a simple product that does 2 things and you introduce a 3rd than when you have millions of users on a product that does a thousand things and you introduce the 1,001st.

I don't understand why you're on a mission to discredit people's work or the challenges they face when building something. It's possible to not like something and still recognize that building that thing was an achievement in some way. It doesn't have to be either or.

If you have counter-arguments to what I'm saying and they're informed from your experiences or what you've learned, I'm genuinely interested in hearing them. I don't care much about being right as much as I do about pushing the conversation forward. But I think we can both agree that saying "cringe" doesn't really help anyone learn anything or push the conversation forward.


I really find it troubling that commentators insist on seeing this as a zero-sum game: that in order for Facebook to win, others need to lose, or visa-versa. Why can there only be one social network? What is wrong with competition?

Let Snapchat be Snapchat, Twitter be Twitter, etc. The constant media frenzy over how fast everyone's growing and if they stop growing (aka Twitter) it's the end, just seems bonkers to me. The only reason for this rationale is Wall Street and public stock offerings. Twitter's stock price will sink if they don't continue a hyperbolic growth path. Never mind if the product is good, or if the existing users are happy. I would actually argue that Twitter's product has been floundering and its existing users feeling the blues BECAUSE of Twitter's need to drive growth. If Twitter had decided a couple of years ago to focus on making its existing userbase happy as well as third-party developers contributing to the capability of the network, Twitter would be in a stronger position today.

So I don't agree at all with the premise of this article. Facebook isn't "beating" anybody. If everyone suddenly leaves Snapchat and goes back to using only Facebook, that's not because Facebook is evil, it's because Snapchat looses its ability to develop products people want. If everyone suddenly leaves Twitter and goes back to only Facebook, that's Twitter's own fault, plain and simple.


It does become zero sum when you consider they're all vying for similar ad dollars. For years, Twitter didn't mind being compared to Facebook because it meant higher valuations for potential growth and ad revenue. But playing that game meant it actually had to deliver on the growth and ad performance. Snapchat is interesting in that it appears to be going after more traditional brand/TV dollars, which is still evading the performant-oriented ad dollars on Facebook.

And both Twitter and Snapchat knew the game they were playing by raising so much venture capital at such high valuations. They could have stayed private longer, raised less at lower valuations and laser-focused on product and making nominal returns. But they chose to go the other route and that means they have to deliver on outsized profits eventually.


There's a zero-sum game in the war for attention. Each person only has 16-17 hours a day of attention to give.

There is also a zero-sum game in the war for how I choose to stay in touch with my friends. For each person, they are going to choose one or maybe two ways to do group updates.


The odd thing about this whole thing is that, in my opinion, SnapChat exists in a different realm than Facebook. Facebook is just this thing that almost everyone has and maintains for social reasons that allows you to connect, for whatever reason, to almost anyone you can think of.

SnapChat is this quirky interesting app for people you know and actively want to share things with. You all see each other's stories and have chats that disappear and don't mean anything, in fact a lot times the messages disappear by accident and that's the fun of it, it's an ongoing dumb chat for friends.

I actually find it interesting that SnapChat doesn't push you to connect with other people by e-mail or other oddball algos, it's mostly just through phone number- your uncle's friend can't "friend request" you. It's one of the few apps where if I want to connect with you, I gotta really want to connect with you and if I don't, good luck finding me!

Facebook is a phonebook. It serves a different market, the way LinkedIn serves a different market. The way Twitter serves a different market

Facebook can copy all the features of SnapChat, infact, great! I hope SnapChat can get some royalties for the idea, but I'll reckon a large subset of FB users don't have SnapChat, nor want to even bother messing around with its "confusing" UI. It's nice that this subset can have these new "toys".

SC users aren't going to abandon it for FB though, it's still just THAT vanilla social site where, literally, everyone and your mom is on.


"Twitter's stock price will sink if they don't continue a hyperbolic growth path."

That's correct because their valuation is currently based on future growth. If their growth just stops and let's say they barely add (and let's say they even keep) users, what would the value of the company then be? Certainly a lot less than the currently traded value.


> Why can there only be one social network? What is wrong with competition?

The second question isn't relevant at all. Essentially no one is saying there is something wrong with competition.

I have absolutely no interest in rebuilding or managing my social network across numerous sites or services. The value offered would have to be truly extraordinary to get me to invest the time and effort. I only barely care enough about Facebook as it is to maintain that.


If you look at the concept of disruption (not what most people think disruption is, but the actual definition from the guy who coined the term in The Innovator's Dilemma), it is a small competitor that arises that better serves a need that only a small part of the market cares about that goes on top create a true competitor. They don't have to do everything the biggie does, they just have to do one important thing better.

For instance, Instagram might have been a Facebook killer, which is why they bought them early. Oculus Rift might also have been (but that's a stretch I think). Just to play it safe they also bought them.

So what are the features that a minority of the market cares about at this point that might spawn a competitor that would challenge FB?

Someone dedicated to privacy, perhaps. Someone with a model that eliminates advertising, maybe, even if you have to pay a membership fee. Perhaps someone who does a better job of incorporating articles from third party sources without all the spam/fake news that clogs feeds. Maybe someone who does a better job of using the camera, or mobile-first/only technology, like pure audio instead of text/pictures.

Other ideas?


I would say that a lot of Facebook competitors aim for the kind of advantage you are describing. And inherently fail because of the combination of Facebook being able roll-out a similar feature, Facebook having network effect and Facebook not being especially demanding/abusive towards its customer base - on the later point, Facebook has banned posts or people registering false names but back-tracked and/or not been especially aggressive about it. They began as the tool of the early adopter but now are the tool of your grandmother with the stickiness of that.

Consider that when Google decided to invest in Google+, they dove immediately into demanding more from customers than Facebook did with their real names policy.

With all its success, Facebook's profitability still comes into doubt from time to time because they aren't squeezing their customers as they could. Which is altogether is to say that all Facebook's rivals have scheme to extract more from the customers than Facebook and thus it's similar to, but as extreme as Craiglist rivals - they can never be as good they because they're constrained to come with a model they expect will eventually make more money.


So in where is the market need where having too large of a network is a disadvantage? That's where you want to hit them.


To see what a Facebook disruptor might look like in social, we can look at Pinterest or Nextdoor which can overtake key aspects of the way people use Facebook.

Both Pinterest and Nextdoor go deep on an area of social that Facebook is too broad for and they do it better than Facebook arguably can.


I was talking with a friend about this recently. I am not old enough to remember the days when Microsoft totally dominated and Bill Gates was literally Darth Vader, so in my eyes Facebook's position seems uniquely powerful and unstoppable. I'm not sure whether it's really so, or whether I'm just falling victim to a present-day bias.


Microsoft was far, FAR stronger and more destructive. One can easily avoid Facebook today and still use the Internet if they so choose. In the 1990s it was exceedingly difficult to avoid using or paying Microsoft if you used or bought personal computers, either in your personal or business life. They also made it their business to thoroughly crush anything open or standardized that competed with their own technology. Facebook is not even close.


Really? I would argue they are even more active and effective at stifiling competing products.


See Embrace, Extend, Extinguish. While Facebook and Google are dabbling in this behavior, Microsoft was the master of it.

https://en.wikipedia.org/wiki/Embrace%2C_extend_and_extingui...

https://en.wikipedia.org/wiki/Halloween_documents


Is Facebook charging Apple and Samsung a fee to preinstall their app on every smartphone the vendors sell, and then refusing to do any business with them unless they do so on ALL devices?


Unstoppable Microsoft was disrupted mostly by the rise of mobile phones. As long as PCs were the main device, they were the unstoppable monopoly (with Apple capturing an extremely lucrative but rather small 10% or so Market segment and nothing else even registering).

They woke up one day and realized people now consume media through their phone; but they were already unseated at that point (their phone ecosystem, due to tie ins into the Windows system, could not compete in the brand new iOS/android/blackberry world of the time; and shortly after, neither could blackberry)

I believe zuckerberg is branching into anything he thinks might at some point be "the next thing", including VR, because of how Microsoft missed the train.

It seems Microsoft believed they can always throw enough money while playing the long game and get a dominant position (as happened with internet/ie, Xbox, etc) - but it seems this strategy has failed miserably with mobile, tablets and may eventually cost them a lot more dominance.


Yeah, in the 90s Microsoft was basically this unstoppable juggernaut that ruled the Desktop with an iron fist. The main cause of their decline was that a new market appeared which they failed to capture - namely, the mobile market (as well as the server market that became dominated by Linux). For Facebook to suffer a similar fate, I would think some new type of market would need to appear that Facebook fails to capitalize on - but it's hard to think of an analogous "new market" that could appear that would fundamentally displace a social network in the way that mobile displaced/disrupted Desktop. Maybe VR? (Although Facebook is trying to get into that as well...)

Still, from my perspective, Microsoft in the 90s seemed as unstoppable and ubiquitous as Facebook does today - actually, it seemed more unstoppable than Facebook, because back then we weren't yet used to the possibility of scrappy startups turning into billion dollar companies overnight.


I'm going to disagree with some of my fellow commenters and say Microsoft's position was stronger, and indeed, may still be stronger even now. Facebook lives by the social network and dies by the social network; it is both fueled by, and vulnerable to, more powerful network effects than Microsoft ever was. They have an opportunity to go MySpace in a way that Microsoft never did. Microsoft's monopoly wasn't broken from the outside by people muscling in on its turf, Microsoft was broken by failing to keep up with trends and missing out on mobile until it was way too late. Even now, Microsoft is a huge going concern making tons of money, and remains quite virile when it wants to be; witness how even after years of ignoring the "cloud office suite" space that Office 365 is pretty casually demolishing all the in-hindsight-feeble competition, which includes Google. I'd say Facebook has a much greater chance to be all but gone in five years. I am not predicting that will happen, just saying I'd say the chances are greater than Microsoft being all but gone in five years.

And I'd also suggest the behavior of Facebook shows this to be their own assessment as well. I'd suggest that the headline is wrong; Facebook beats every rival because anyone who becomes a rival they simply buy; this effect is more important than coopting features because it puts a ceiling on their competition. The feature cooption is more about minimizing the number of companies they may have to buy.


I remember the days of Microsoft's monopoly, and I feel that Fakebook's position is stronger than Microsoft's, but it's not unique. I feel that Google's position is stronger still. Between them and Amazon, there is more of an oligopoly than a monopoly now. They will compete amongst each other following whatever compromises they come up with, but any one of them is in a position to squash upstarts, for the good of the group.


My impression is that Microsoft was a lot stronger than Facebook or Google are now. Not having a Facebook account is annoying, but there is a very large world outside of Facebook. If you have a website that is not in Google's index, then you have a problem. But for just about anything else from Google there are plenty of alternatives.

When Microsoft was dominant, basically a PC implied that the operating system came from Microsoft. Very few people had the option of not running DOS or Windows. People would regularly send Word or Excel document and there were no reasonable alternatives to Office to deal with those.

And without the Internet, finding details on how to avoid Microsoft was also hard.


> People would regularly send Word or Excel document and there were no reasonable alternatives to Office to deal with those.

Corel, Word Perfect, Lotus... others.


My recollection of that period is that Microsoft kept changing the formats of Word and Excel files fast enough that trying edit those files with Word Perfect or Lotus was domed to fail. At some point even finding a common version among different versions of Word was almost impossible.


>I feel that Google's position is stronger still.

I'm not sure there's much in history to compare to Google. Their individual market share in search, browsers, ad networks, phones, and email is impressive. But more interesting is the synergy between them.

It scares me a bit how much we rely on them to not abuse that power. Not just in a consumer sense either. Think of some of the slimy things that were done over at Uber for example, like the "God View" app, tracking journalists, etc. If Google wanted to, there's any number of awful things they could do.


If the government had not stepped in Microsoft would have owned the entire internet. They could have killed Firefox and Chrome by not allowing them to be installed. They were already building proprietary features into IE that only their products could use. The open web would be dead and become a proprietary web owned by Microsoft.


That was never going to happen. The value proposition for DOS and Windows was that they were open to running anything and everything. Microsoft was the ocean, not the shark.

As for adding features to browsers, they all did that. Netscape tried to build its business on "looks better in Netscape", and Microsoft simply implemented support for Netscape features (much like it had implemented support for 1-2-3 and WordPerfect features in Office).

There was never any prospect of "a proprietary web owned by Microsoft". In the mid-90s, Microsoft did have plans for a web-like network as a sort of distributed OLE (Blackbird), but quickly went "all in" on the web. The closest was the use of ActiveX controls on the web, but other browser makers could have supported ActiveX if they had wanted to. (Firefox decided against.)

Otherwise, neither Firefox nor Chrome existed when the anti-trust case ended, and there has never been any prospect of Microsoft killing either. It was Netscape that featured in the anti-trust case, and Microsoft won the browser case 2-1 on appeal.


You're judging Microsoft's actions as if they kept their systems open out of the goodness of their hearts or something. The only reason Microsoft didn't get more aggressive with their lock-in attempts was because of antitrust fears. Apple blocks apps on iOS at their whim, no reason MS would not have done the same with their monopoly to devastating consequences.


Not at all. I'm just stating the facts. You're indulging in speculation.


>> Fakebook

Can we please not indulge in this RMS-esque infantile name calling?


I swear it was a typo. I'm not going to fix it.


Microsoft didn't lost their dominating position. They took a hill, made themselves strong there and never lost it.

It's just that the rest of us moved to other places and leave them defending their hill.


IMO Microsoft was way stronger, but the market was far smaller. Microsoft literally sucked the oxygen out of the entire industry. Facebook has a million niches.


When they offer centralization, you go decentralized. Mastodon is neat and growing quickly.


Instagram was on the path to becoming a true rival to Facebook, that's why Mark Zuckerberg bought it. They had very savvy engineers working on a fantastic product; that's still true it's just happening under different ownership. Facebook didn't beat Snapchat with Facebook, it beat them with Instagram. They tried copying features directly to Facebook from Snapchat and that fell flat.


Facebook has one thing it can't do - offer privacy respectful network. Competitors should use that to their advantage.


The vast majority (outside HN) would still choose the network where their friends are conveniently already located over privacy concerns. Especially when those concerns involve pictures of their cats or other trivial personal information.

And so the network effects remain.


- I have many non-techy friends in their 20ies who don't post pictures or personal stuff to Facebook because "someone told them it's dangerous". They can't articulate the logic around this danger, that is the most surprising.

- None of my sister's wedding pictures are on Facebook because of this reason – It was said loud on the mic during the ceremony.

- My mother is very afraid of having her credit card stolen by a virus in Windows, that's why she always... refuses to install upgrades. It's not so bad: Better an old Windows than clicking on every Update button their find.

- I don't watch people using their phones much, but when I do, I often ask them why they use one workaround instead of going straight to some place. "I was told it's better for privacy" is a frequent answer.

I'm illustrating that non-tech-savvy people aren't ignoring the "privacy" signals. They may be doing the wrong thing in the moment, but they are severely frightened and they do look for ways to protect their privacy.


I have my Facebook settings configured so I have to approve tags, and honestly I'd prefer people not post photos of me or comments like "had a great time with Steve!" without asking.

Most of the time it's fine, but sometimes the fact that someone's in a certain place with certain people, or not in another place with other people, is a sensitive issue. Sometimes it can even become a sensitive issue later on (imagine being tagged in a wedding reception five years ago, standing next to a then-unknown Martin Shkreli).


Another way to look at that is that people are sharing pictures of cats on Facebook because that all that it's good for.

Most people have to many 'friends' to share anything more personal.


> The vast majority (outside HN)

I think one could build a strong userbase in countries where people want privacy from their governments, on top of the "HN crowd".


Network effects remain, but it's still something that can be used as an advantage over Facebook. A lot of FB refugees choose other networks when they are starting to get fed up with lack of privacy on FB.


> outside hackernews

Isn't hackers congregating on a new agg site like Hackernews where other hackers are already hanging out the same network effect in action?


I'll do a shameless plug for a side project I'm hacking on which is a privacy-first noise-free social network: https://postbelt.com

It's not even intended to be a facebook competitor really though, it's obviously for an entirely different audience. It's text-only and intended to be for longer-form discussions than quick updates and the like. Please check it out!


do we really need a bunch of rich fucks staring at us while we're talking to our friends? how do you even make friends in that kind of environment? shouldn't social networks be, you know, personal?

we haven't won yet, but we will.

https://www.bbnet.io/ http://www.fediverse.org/ https://mastodon.social/ https://gnu.io/social/


&& https://GitHub.com/ssbc/patchwork got a lot of traction a few weeks ago. super cool group of folks there, and very interesting technology in SSBCs repos.


This is awesome, they're just Twitter lookalikes! but better, with federation, this is just what we needed, awesome! ...but as a company, I can't do advertising, should I complain?


Are you telling me most tweets arent promotional already?!


Those are all twitter-style default-public networks, not really good for friends.


tell that to all of the friends i've made here. it is very different from twitter somehow. you really do connect with people.


I keep wondering if Snapchat is going to end up being Facebook's Microsoft-Netscape situation.

If Snapchat goes down (almost guaranteed at this point), it's going to be universally blamed on Facebook. That blame - along with the likely howls from Snapchat and its backers - will intensify anti-trust attention. The bundling premise that got anti-trust attention with Microsoft's Windows monopoly, will draw the exact same attention to Facebook leveraging its network to smash competitors while it has a monopoly or near-monopoly in social (Instagram is dramatically reinforced by Facebook).


I feel there is something shady missing between all these crazy headline stats.

For example, Facebook messenger stats seem gamed to me. I never really use it, but every time i accept a friend request it pops up a fake messenger notification telling me that i can message that contact (opening messenger of course).

Furthermore the quality of news feed has dropped of a cliff for me. It's really just posts from pages and sponsored posts now. Very few people actually post.


Not sure about Facebook because I am no longer a user of Facebook. To me Facebook just felt no longer necessary once I understand that it is just trying to trick me to stay on the page by showing me things that are addictive to see or watch.

Interestingly the same network vs feature idea can be said about LinkedIn. Recently they rolled out messaging feature on the main UI like what Facebook had, pretty good move to increase user engagement.


Facebook isn't beating its biggest rival (yet). Google owns 54% of the digital ad market in the US, to Facebook's 20%.

Social networking (just as Search for Google) is just data collection and distribution for its real product, ads. I wouldn't be surprised to see Comcast take a big bite of this market in the near future too (since they can now compete via data collection and distribution).


I finally used snap chat a few months ago, and the experience was just annoying. Don't get me wrong, the whole take a snap of your face, make your voice sound funny is really fun and all, but the UI was just annoying, there were emoticons appearing next to my friends names, I had to google it to find out what it meant.

There was some number next to my name, next to my friends names, god knows why its there, i'm assuming something to do with how many snaps you send.

The navigation.. just really unintuitive. So as a user it makes me not want to explore the app, hye i got a snap from a friend, okay watch send a "haha nice" message and forget about the app.

While it's kinna scary to watch how much power FB has, I can't help but think its snaps own damn fault for making something that does one thing, and for not taking any measures to make it do more, to get me to stay with the app, to get me to use it more.


The dominance of monopoly players will not be challenged

* until *

it's normal for majority of consumers to have an AI / middleware that can choose the best option without the consumer needing to know it's a monopoly player or not (brand)

Example: I want to create an event with my friends at a local pub.

In 2017, I create a facebook event and invite my friends. I use Google maps or Yelp to find an appropriate pub.

In 2040, I tell my Mantle / AI by voice, "make an event for me and friends at local pub, moderate price, close to downtown." Without me ever knowing what services are used, I'm told to meet my friends at some location, and they are told as well. I never have to interface with Facebook, Google, Yelp, or anything but my Mantle.

I cannot wait for this, as I am completely sick of Facebook and Google fucking up basic functionality and eating competitors. I also don't want to do the work of constantly knowing what is the best competitor to use for simple services.


Who's going to produce your AI and why won't they be biased? ;)


If you feel, like I do, that if WhatsApp were not acquired by Facebook

a) their growth rate would not have been much smaller b) they would probably have just as much or greater user engagement than what FB has today

then the actual question should be:

"What is actually going on which allows such acquisitions to bypass the antitrust laws?"


I was thinking it could be a good thing to use antitrust laws to prevent Facebook dominating by buying its competitors. I mean winning by having the best product is fair play but not by buying anyone who may be a threat. I'm not up on antitrust law - I'm guessing they don't apply to social networks currently?


Regarding Google and Facebook, I'm hearing antitrust muttered in the office where I work, lately. (A digital publisher)

I'm ready for some more noise on this issue, publicly.


Snapchat's app is atrocious, and they have essentially ignored the "poor" customers. Why FB should not be allowed to provide a better user experience? I think we should be lauding Facebook/Instagram for providing their users a better more private user experience.


> more private

wat?


I don't think Facebook is beating snapchat. When you start to follow you always stay a step behind. Doing that with a bloated behemoth of a product is very difficult. Camera effects were successfully copied as they were a new concept, innovative but not disruptive. But the real challenge would come if snapchat or someone else comes out with something that is already there in Facebook. If Snapchat released a better version of the like button or the wall, will Facebook be willing to risk changing the like button or the wall to match snapchat? Will it risk losing the lovers of the wall for the lovers of the new thing that replaces the wall.


Question for all: would it work for a social network startup go the opposite way? copy the best of Facebook functionality, without the bloat, the overhead, and the ads?

(but then how would they make money... hmm)


Yes, this is typically called network externalities, or network effects. It is an ingredient that increases defend-ability by locking a critical mass.


This a good start, but I think there could be a lot more thought given to how we should think about monopolies in the context of markets where networks effects are crucial to the business value (aka. Facebook and Google most obviously, arguably Amazon, Apple), because one logical conclusion is that in a market where network effects are a major factor, the biggest network should be best positioned to provide the most value and therefore (assuming it doesn't actively eff things up on other fronts) should continue to grow until it dominates the market...which seems to pretty much be what happened, and it makes pretty good sense for the most part. in these cases, it actually seems BAD to break these networks apart, since their scale is arguably one of its primary values to the customer - this doesn't mean of course that they can't abuse their monopoly powers (I think they probably do to some degree and will continue to), but interesting to think that the traditional "break up monopolies" impulse doesn't make as much sense. this leads me to think it will just be more consumer-protection-related regulation (under the banner of consumer privacy, or maybe even public health, given all the "social media addiction" thought pieces out there these days ha).

(repurposed a prior discussion but arguably more relevant here!)

One thing I've found super interesting/impressive about Snap is that it didn't try to outcompete FB in terms of sheer network size for its usage stickiness, and instead turned smaller, tighter and more private networks into a differentiator, while at the same time providing advertisers/brands with a competitively massive audience - not an easy thing to identify, much less execute on. TBD if that differentiator is enough to keep them alive vs. FB's more traditional network-effect-driven advantage, which will be hard to beat on its own terms. I think Snap's success will depend a lot on its ability to avoid being tempted to play that game (see: Twitter!).

random other thought: this all also reminds me that Mark Zuckerberg has not made a peep about wanting FB to be thought of as a "utility" in a long time (or maybe he has and I just missed it...but couldn't find any recent mentions, see this talk from 2013: https://techcrunch.com/2013/09/18/facebook-doesnt-want-to-be...), probably in part because they are now a lot more at risk than ever before of being regulated like one. Also kind of funny to hear him talk about "we don't want FB to be cool" too, because now it seems like FB very much wants to be cool again now that Snap has become cool and has threatening user counts.


A leaky bucket, no matter how large, will eventually drain.


Not if you fill it up faster than it drains.


The pool of users is finite.


For more on this subject, see this relevant What-if? post:

https://what-if.xkcd.com/69/


While there were communities with large and working social graphs like ICQ, AIM, Myspace, etc., Facebook had a more committed approach emphasizing real identities rather than pseudonyms.

Being first to market with an accurate social graph consisting of real-life identities is what gave Facebook its advantage.


And that's biggest disadvantage for most young people.

Also, Linkedin was earlier, but real-life identities was first, because of understandable purposes.


We're talking about FB's decision to add mustaches to your face while posing for a selfie. It's couched as a debate about business ethics / innovation, but remember: we're talking about dog ears and mustaches.


i swear these media outlets read hacker news/medium/any other popular blog site and just regurgitate information




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