Monday, December 6, 2010

The Limits of Facebook

Let me first start by saying I have a not-entirely-rational animus towards Facebook. It's mostly because I'm a contrarian: when all my basketball-loving friends were touting LeBron James as the greatest player of the 21st Century, I predicted he would fail because he was too immature to handle the fame and money. (In my defense, I underestimated his talent, but he clearly has some maturing to do, even now.) Basically, I get annoyed when someone or something is annointed 'transformative' before they've earned it. So when I read Mark Zuckerberg's recent comments that Facebook would 'reform' the world of entertainment within five years, I felt my teeth grinding.

Of course, that's hardly the most outrageous thing anyone has said about Facebook: one Russian tech investor with a stake in the company said it could help create artificial intelligence the next decade. All of these claims are based on one central contention: that the massive amount of data, and the underlying 'social graph', that Facebook controls will enable it to transform industry and technology in unprecedented ways. In the interests of brevity, here are three reasons why I don't think it will happen, at least not to the extent Zuckerberg and his investors would like:

1) Who owns the data?
Facebook has courted controversy multiple times when it has changed its privacy settings or let third parties access its data. So far, it hasn't seemed to lead to any mass exodus from Facebook. But the business needs of Facebook fundamentally clash with the desires of its users. Most poeople I know use Facebook to keep a virtual finger on the pulse of distant friends, and as a way of sharing lower-level personal news (photos of your vacation, where you went for dinner on Friday, the celebrity you saw at Saks Fifth Avenue) with a bunch of people easily and unobtrusively. Then there are the people who are on the site obsessively, curating their network and their social presence to some personally defined level of perfection. The former group likes the convenience of Facebook, but doesn't need it if push comes to shove. And the latter group is msotly showing off for each other and for the majority that fits into the first bucket. If Facebook starts monetizing its networks too aggressviely people will get turned off and leave. So the power of Facebook's data only exists so long as it can avoid too obviously using the data. When Zuckerberg talks about "changing standards of privacy," what he is saying is that his business ultimately depends on his users becoming comfortable with Facebook selling their data (aka the digital version of their personal lives) to marketers.

2) The Perils of Overexposure
Unsurprising news: many divorces, including celebrity divorces, are being abetted in part by discoveries on Facebook. This isn't a failing on the part of Facebook any more than it is Visa's fault if a wife finds charges for expensive 'massages' on her husband's bill. But it is the inherent nature of Facebook to expose the ragged edges of human life, and more and more people are going to get burned by it as time goes by. Soon everyone will have the story of a coworker who got fired because of an ill-conceived post, or family members who aren't talking because one sibling saw the other blew off her baby's christening to go to the movies. Once people start aggressively self-censoring, the site becomes less fun, and the data less valuable.

3) Our Network is not Our Brain
One of the fundamental assumptions of Facebook is that we'd rather learn things from our friends than from an algorythm. Zuckerberg and his boosters think we will soon be deciding what to buy, where to eat, and what to believe thanks to the power of our network. And to some degree, that will happen: there is a fairly compelling body of research that we are subtly influenced by the decisions and beliefs of the people around us. But where Facebook goes wrong is assuming the subtle interactions that drive so much human behavior are easily replicated online. If I see a friend wearing a really nice jacket, I might be envious and go get a similar one. But if I see a friend of five 'likes' Burberry on Facebook, that is not going to arouse my desire for Burberry coats: if anything, the display of sycophantic passion for a consumer brand is going to be a bit of a turnoff. I'll think less of my friend, and maybe a bit leas of the brand. The reason social effects drive so much real world behavior is because we aren't really aware they're happening. When we become conscious that someone is trying to influence us, we react very differently.

In the movie The Social Network, the Eduardo Savarin character wants to sell advertising on the site. Zuckerberg, under the influence of Sean Parker, is hostile to the notion, because "ads aren't cool." This is a basic insight into Facebook's enormous success: people like Facebook because it seems like a safe space to connect with people they know. But Facebook exists to make money, and the desires of its users and owners are in tension, if not conflict.

I am not predicting Facebook's demise: I learned better after talking down LeBron. But like LeBron, Facebook may not fulfill all of the lofty expectations people have for it, and when the hype has gotten this out of control, moderate success can feel an awful lot like failure.

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