Facebook according to Sacks: It's the Social Graph, Stupid!

My ex-boss David Sacks (former COO of PayPal, occasional movie mogul, now Founder/CEO at Geni.com) has a pretty interesting take over on TechCrunch about the importance of the "social graph", and the momentum shift from search engines (Google, Yahoo) to social networks (MySpace, Facebook). 

Last week I ran into David when he was in town for the Facebook Platform launch, and i got to chat briefly with him about Facebook, Geni, and a few other notable social networks. So it was no surprise to see him editorialize his thoughts on TC: "The New Portals: It's the Bread, not the Peanut Butter".

Now I don't believe everything David says is correct, but he's a pretty brilliant guy and someone i'd never want to face across the table at either a poker game or a chess match.  Anybody who can get a $100M valuation on their second round of funding certainly deserves, as Ali G sez, my re-SPECK.  And David has proven twice before that he definitely knows how to make money. 

Much of his article focuses on how social networks use trust & relationships to produce higher-quality information, and why Facebook is becoming an incredibly valuable property not so much because of the content (aka "the Peanut Butter"), but because of the infrastructure built around the social graph (aka "the Bread").  No wonder Yahoo was interested to the tune of $1.5B; but as David notes... also no wonder either Facebook wasn't.  Unfortunately for Yahoo, they just don't have that kind of bread. (heh)

Bread & circuses aside, Mr. Sacks is likely correct that Facebook is quickly becoming THE dominant social network, and he even goes so far as to say Web 2.0 will be rebuilt in the image of Facebook:

The potential for Facebook to layer on any feature whose value increases with the participation of friends is an incredibly broad canvas for a portal. Moreover, as each new application gains acceptance, it enriches the overall value of the network and makes it incrementally more likely that the next application will be tried. Much of what we know as “Web 2.0″ will eventually be rebuilt on top of Facebook.

Pretty strong words, and a pretty big endorsement for Facebook Platform (other folks think so too).  While i don't believe Facebook will kill all other social networks, it isn't too hard to imagine them becoming the de facto "social" social network, and a very powerful platform for developing social applications.  Dave Morin and team over at Facebook have certainly created a great new opportunity for developers looking for a big pool to wade into.

Still, call me skeptical that Facebook will completely replace my "business" social network (LinkedIn), or my "family" social network (Geni), or my "photos" social network (Flickr), or my "porn" social network… er, ahem… ok, let’s just stop right there.  Anyway my point is I won’t always share all of my info in the same social network -- even if Facebook is the biggest one -- and there will likely be a "long tail of social networks" that provide niche content & context, in addition to the more popular ones like MySpace & Facebook & LinkedIn.  And altho i'm biased, I might suggest a service like Spock.com could be a useful way to track & manage all the different social networks in which people participate.

But i do think there is some truth to what David says about social networks providing a trust-based way to communicate higher-quality information:

Not only Digg, but virtually all Web 2.0 applications which are based on the wisdom of crowds can be reconceived as Facebook apps based on the wisdom (or trust) of friends. To the extent that these services cater to publishers who seek a mass audience, such as YouTube or Flickr, the social graph will not threaten their business. But to the extent they publish content intended for friends, or if the value of their service increases with the participation of friends, these applications face only two choices: get each user to recreate his or her friendship network on their own site or migrate their service to the Facebook platform lest someone else does it first.

While i might quibble about the interpretation of Surowiecki's Wisdom of Crowds in this context, i'd agree there is likely a method of combining social networks & prediction markets that enables powerful new ways to derive information from "vertical communities". 

In fact, I wrote an article on this topic last month for O'Reilly in Release 2.0 called "Channeling Crowds" (excerpt linked).  Whether or not this type of community occurs on Facebook or on other niche-focused social networks, there are whole new classes of websites & applications which can be created by using the community's social context as infrastructure.  And if i'm a betting man, my prediction is one of the more successful of these will be Geni.com.  (Best of luck, Mr. Sacks :)

Comments

[myspace design]

awesome information. Dave has some interesting ideas. The channeling crowds article is great.

[jeremy liew]

Facebook is really commoditizing the social map and that has ikmplications for all social media companies. I blogged some thoughts on this recently - click on my name in this comment if you're interested

[Doug Strickland]

Don't you think that by even attempting to establish itself as the platform for social networks that Facebook has in affect already jumped the shark? The backlash from counter-social behaviors (e.g. Diggs pay-per-digg scams) is likely to lower the signal to noise ratio to a point where a new evaluative approach is necessary. The next evolutionary cycle for how group think benefits the individual is already underway, and while the Facebook platform may indeed inspire, it will no doubt be thought of as the precursor to the next big thing. Keep in mind that at one time, portals were the end all. Metasearch like Altavista made sense of the mayhem, then came Yahoo and Google, building powerful natural language search. Now we see the rapid growth of vertical search, seeming to bring us full circle. Will the next cycle metasearch the verticals?!?

20 years ago when I wanted to find a new restaurant I asked friends and read the critics reviews. Now when I'm looking for a new restaurant I read what strangers in my community say and see who they voted for and for some reason I believe them. How has my life been made simpler, or my experience become better?

[Frank Ruscica]

Re: combining social networks & prediction markets, see OpportuniTV.com.

Best,

[Damon Billian]

Hi Dave,

An interesting take from both you and David. I also think a lot of the existing social networks really need to pay attention to what Facebook is doing (I am not a member of Facebook right now).

[JoAnne Rockower]

Hey Dave...nice article about David, his thoughts and your own. Thanks for mentioning Geni too. Come visit us when you find yourself in our area--haven't seen you for a long time.

[Robert Dewey]

How can people say that Facebook will likely become the "standard" when there are much bigger opportunities? There are [estimated] 1.5 billion e-mail users around the world. A company like Google could analyze incoming/outgoing messages and draw a simple relationship map... It's an opt-out social network.

Hell, even a cell phone company could do it...

I think the mistake with existing social networks is that in order to have a connection, that connection must also be an active member on the social network. Then again, that's no different than real-life - if I want to be friends with someone, they have to exist in the same universe :)

The most widely used feature on social networking sites is messaging and bulletins. A short poll indicates that people check their MySpace multiple times a day to check messages and see new bulletins. Why not base a service solely around those features, while being more like Geni? The good thing about Geni is that a person doesn't need to be at the service to be a connection, and the "adding family" aspect is just downright fun.

Facebook is the winner for now, but we'll have to see how the game is changed over the next couple of years.