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Social platform players reveal diverging roles August 6, 2012

Posted by David Card in Uncategorized.
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Last week, Facebook and Twitter generated consternation within their respective ecosystems. Disgruntled developer Dalton Caldwell whined that Facebook found his app so potentially competitive that it “threatened” to buy him out. Meanwhile, Twitter had to apologize for temporarily shutting down a reporter who was helping feed a ruckus within its all-important Olympics-coverage network. These unrelated uproars illustrate key differences in the two dominant social media platforms. Facebook APIs channel data and technology services, but Twitter’s all about the data.

Both companies make social technology platforms that enable third-party developers using public APIs to build apps and services. Both platforms have spawned successful business ecosystems generating utility and value for mass-market audiences, app developers and web sites, and the platform companies themselves. Facebook has irked developers with its policy changes: particularly by making changes to how application activity gets shared among users, which can have a big impact on app traffic and promotion. Usually, it’s Twitter that gets accused of competing with its developers.

What matters for Facebook’s ecosystem

Although Google seemed only too happy to try to take advantage of whatever bad vibe Caldwell’s missive might create, the incident is a classic teapot tempest. This piece I wrote assessing the position of some social tech platforms and their ecosystems is still valid. For a thriving ecosystem, in addition to core technologies and support, would-be platforms need to give developers access to large and/or valuable audiences, distribution or even out-of-network syndication, data, and a way to make money.

Google has its own history of API inconsistency, but more important, Google+ hasn’t really clicked with users as a destination or place to use apps. And although Google is making some progress attracting marketers who value the potential for Google+ technologies to permeate other Google apps and affect search rankings, Google hasn’t connected its powerful ad networks to Google+ for developer revenue.

I doubt many developers fear that Facebook will compete with or buy them out, and an Instagram-like exit is an incentive, not a deterrent. Rather, a more serious Facebook platform issue is that its original platform poster child, the social games giant Zynga, is struggling lately. Zynga’s wounds are self-inflicted or the natural ebb and flow of managing a portfolio of entertainment titles. Zynga is experiencing sequel-itis and the fact that not all hits are instant franchises. But many see Zynga as a symptom of the Facebook platform’s vulnerability to increasing mobile usage.

This is premature, but worth monitoring. Mobile-only usage is starting to be noteworthy for Facebook, but some of that may be occurring in emerging markets where neither Facebook nor its ecosystem have business models to be damaged. And Facebook’s “sponsored stories” advertising format is showing early promise and can accommodate mobile usage. However, while individual gaming on mobile handsets is common, social gaming is less so. Neither has Facebook established its role in mobile app distribution or content discovery.

Twitter plays different role

Meanwhile, Twitter’s dust-up reveals the relative importance of the company’s roles within its own ecosystem. My GigaOM colleague Mathew Ingram writes equally about Twitter as an information utility, a media company, and a technology supplier. Yes, Twitter is a true platform, but its APIs are arguably far more important as a data source than they are as tools for developers building application functionality. The journalists, celebrities, and consumers that generate the content that flows through the Twitter network are a bigger part of the ecosystem than are third-party app developers.

So what are the takeaways from last week’s events? Facebook partners should stick close to the company’s budding mobile efforts, and experiment early and often. Caldwell’s concerns about Facebook’s business practices are overwrought, but questions about Facebook’s longer-term mobile platform and its ecosystem remain unanswered. And while Twitter is evolving its technology, developers should notice how much that evolution is about content display. Twitter may have some ideas about apps running within its platform, but Twitter’s most critical role is as an information and content distribution mechanism.

Question of the week

Which social media platform is more vulnerable?
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