Posts Tagged ‘Social network’

Poor old Rupert Murdoch – his purchase of Myspace was not exactly one of his best moments and maybe he is still puzzling why. At least that may explain his tweet last week.

He tweeted: “Look out Facebook. Hours spent participating per member seriously dropped. It was the first really bad sign seen by MySpace years ago.”

Now Mr Murdoch has voiced doubts about Facebook, it may be worth asking: why and why not?

As for why, we have two reasons. Firstly, it kind of fits with the Myspace experience. After all, the social media site once seemed unbeatable. Is it not logical that Facebook, after flying too close to the sun will find the wax holding its feathers together will melt and it will crash, just like Myspace did? Secondly, data out last week revealed that Facebook is losing users.

As for why not, firstly, yes, it is true that Facebook is losing users from its website, but it is gaining them on its apps. Secondly, Facebook is not Myspace in a profound way. The Internet is all about cooperation, about different services dovetailing with others. Facebook is good at this dovetailing and Myspace wasn’t. Then again, Mr Murdoch’s media empire is not one for dovetailing either.

Mr Murdoch was late to embrace the Internet and when he did, he only half did. For example, the ‘Times’ isn’t really on Google. The ‘Financial Times’ charges for its content too, but at least it is fully immersed into search engines. It is perhaps a subtle point but one that seems at odds with the Murdoch ethos.

Facebook has locked its users in in a way that Myspace never did, meaning that it benefits from high barriers to exit. Oh, and one more thing, it is learning how to monetise its massive user base too.

© Investment & Business News 2013

Sometimes stories are too good not to tell, and little things like facts must never be allowed to stand in the way of their telling.
Take Facebook. The ‘Guardian’ broke the story yesterday, and the bandwagon got moving in its wake.

“In the last month, the world’s largest social network has lost 6m US visitors, a 4 per cent fall, according to analysis firm SocialBakers,” said the ‘Guardian’ and added: “In the UK, 1.4m fewer users checked in last month, a fall of 4.5 per cent. The declines are sustained. In the last six months, Facebook has lost nearly 9m monthly visitors in the US and 2m in the UK.”

The piece continued: “Users are also switching off in Canada, Spain, France, Germany and Japan, where Facebook has some of its biggest followings. A spokeswoman for Facebook declined to comment.”

It also quoted Ian Maude at Enders Analysis who said: “The problem is that, in the US and UK, most people who want to sign up for Facebook have already done it…There is a boredom factor where people like to try something new.” See: Facebook deserted by millions of users in biggest markets 

Is Facebook set to go the way of MySpace – from unbeatable to beaten in just a few months?

Many jumped on the ‘Guardian’ article and concluded that this was so. It was an easy sell. The world is full of social media cynics, who see bubble writ large. And to those who say: “But Facebook is so wonderful,” they laugh and say sarcastically: “This time it is different.”

It is just that SocialBakers, the very people who the ‘Guardian’ cited in its article, see it differently – very differently, in fact.

“Sometimes, journalists get stats wrong,” it said. “The Facebook stats found on our page are not primarily intended for journalists, but rather Ad estimates for marketers,” it stated in its web site,. And added: “We previously published a clarification to one of The Guardian’s articles three months ago (read more in Clarification to ‘Guardian’ on Facebook losing UK users). In this article, I explained the stats in question, revealed the source of the stats, and admonished journalists against jumping to conclusions about them going forward.”

Jan Rezab, CEO at SocialBakers, said: “The Guardian did not heed the advice, jumping to an even bigger conclusion this time.” He added: “We state, quite clearly, on our site that these figures are rough estimates and cannot be used to determine Facebook traffic. Again, we explained this to The Guardian when they published a similar story some months ago.”

He then pointed out that “around 50 per cent of the UK’s entire population is on Facebook.” This, he said, “is amazing!”

There are two stories here. Story one: how myths can grow when they tell a story that appeals to the imagination; how there is a deficit between facts and what you read in the newspaper, even venerable newspapers such as the ‘Guardian’ – let alone the more ‘all migrants are evil’ type of newspaper. The other story relates to Facebook.

This company now has a very subtle but important benefit. Its unique selling point relates not so much to the size of its user base, but the network that describes how its users interact with each other. Network theory is a burgeoning, poorly understood, but very important field of study. See: Network theory and science

One thing network theory does tell us is that networks are often very robust, and very hard indeed to destroy. To illustrate the point, the Internet itself was designed in the way it is to be impervious to nuclear war. Al-Qaeda survived the death of Osama bin Laden, and it is devilishly difficult to change someone’s mind, because the sets of arguments that create a belief can be represented by a network.

Disruptive technology, in which new technology changes the face of social media, may spell curtains for Facebook, but until something new comes along, it remains in a very strong position, and a position it is now learning how to make money from too.

© Investment & Business News 2013