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Google v. Facebook: Defining groups for social networks July 11, 2011

Posted by David Card in Uncategorized.
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At last week’s product announcement, CEO Mark Zuckerberg contrasted Facebook’s approach to creating “groups” with that of Google, saying, “The definition of groups is . . . everyone inside the group knows who else is in the group.” Pretty clearly, he was responding to the Circles feature in Google+ that’s been attracting rave reviews from early adopters. Groups are critical for unified communications, content sharing and filtering, application interaction and distribution and identity management. In time, they may become important for advertising and marketing.

Facebook and Google handle group management quite differently. Understanding their strategies will help competitors and partners gauge one another’s chances for success and identify opportunities for complementary products and services.

Differing approaches

Facebook refined Groups last October; its previous Lists approach suffered from a low 5 percent adoption. Facebook wanted Groups to facilitate focused sharing and communications, while Lists would remain as a news-feed filter for power users. Facebook made Groups a two-way membership dependent on invitations. Besides assuring common membership, that tactic was geared to jump-start adoption by harnessing behavior similar to photo tagging, where a minority of participants does all the work.

Google’s Circles is easier to use and better integrated than Facebook’s options, and it functions as both filters and focused sharing/messaging. Since Google is starting from scratch, it has the advantage of practically forcing users into setting up Circles upon sign-in. But Circles is not reciprocal: While a user can follow contacts à la Twitter without requiring a two-way relationship, there’s no easy mechanism for creating single groups with common membership.

Outlook for success, opportunities

In a survey of 451 GigaOM users, many respondents explicitly called out Circles as having a competitive advantage over Facebook, praising its real-world affinity and its granular control over content and privacy. Early adopters see high rates of sharing. Meanwhile, since October, over 50 percent of Facebook users have become members of Groups, according to the company, lending some validity to the “power-inviter” concept. But there’s no telling how representative those Groups are of real-life connections.

In the end, organizing the masses on social networks into relevant groups will probably take big-data analysis that produces auto-suggestions that users can apply. That kind of approach may be coming soon. Similar types of sorting for relevance are well under way, with Google an early innovator.

Google makes its living analyzing relevance and has proven its capabilities with search results. It’s starting to demonstrate expertise in social relevance via its Gmail priority inbox, though its social search efforts may be stymied by the expiration of its Twitter data licensing. And Facebook applies its own EdgeRank algorithm to sort users’ news feeds by relevance. Users’ results may vary. I’d bet on Google getting group relevance right, but then again, Facebook has a lot of social graph data and plenty of money to hire scientists.

I’m surprised Google+ doesn’t pre-populate Circles already, although perhaps Google fears that that would creep people out. It could test reactions by offering the feature to existing priority inbox users. Likewise, Facebook automatically suggests adding members to Lists, but, oddly, not to Groups.

What kind of opportunities does that leave for third parties? Consider the following:

As noted, Google has advantages in defining groups, due to its existing expertise and the fact that it doesn’t have to retrofit a solution. But there’s already a hack to “Circle-ize” Facebook Groups. If either approach gains momentum, the other will no doubt copy it. Let the games begin.

Question of the week

Who will win in social network groups?
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How to Reach Social Media Critical Mass November 8, 2010

Posted by David Card in Uncategorized.
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When it comes to consumer technologies, how big is big enough? When do they really start to gain momentum, and what happens when they do? These are questions of critical mass — the magical tipping point when user adoption starts producing that old cliche, hockey-stick growth that fosters sustainable businesses.

Last week, a new consumer survey by the Pew Research Center inspired many to ask those questions about location-based services, which, to-date have achieved only single-digit penetration of the online population. And while we have a little ways to go in considering how location can achieve critical mass, it’s worth considering just what defines it and how companies can achieve it.

Critical Mass Means Two Things

When a new consumer medium or technology reaches critical mass, two things happen: Adoption accelerates and new businesses or markets emerge. Historically, critical mass tends to occur when about 15 percent of households or users adopt the new technology.

VCRs illustrate the classic example of critical mass. In the early 1980s, U.S. household adoption of VCRs hit 15 to 20 percent. When that happened, a whole new business around home video rental was created. Blockbuster was born. Adoption accelerated and rental revenues flowed.

Social network usage showed a similar pattern. In 2005, social and professional networks like Friendster, MySpace and LinkedIn were used by fewer than 15 percent of the online population. Two years later, MySpace was generating more page views than Yahoo, and cutting billion-dollar ad deals with Google.

VCRs also illustrate another characteristic of products or services that reach critical mass: sometimes their core value proposition changes. While the original base of VCRs was sold for the purpose of time-shifting programming, their ultimate success came from a completely different utility. Time-shifting was attractive enough for the first 15 percent of households, but the ever-present blinking clock shows that home video rental was the VCR’s real killer app.

Social Media Technologies at Critical Mass

Location-based services have not reached consumer critical mass. However, other social media technologies that are reaching that point right now include:

  • Social gaming. Using Facebook as a launchpad, games like Zynga’s FarmVille and Mafia Wars have reached critical mass in the U.S. Unsurprisingly, they’ve become advertising and promotional vehicles for brand-name marketers like McDonald’s, and may finally prove the value of micro-transactions and virtual currency.
  • Micro-blogging. We’re really talking about Twitter here. Adoption is near or at critical mass. Some question whether Twitter will ever be truly mainstream, but it’s already gone from being tech- and social media news-only to celebrity-watching. Twitter’s just figuring out monetization, but feed-based user interfaces and news dissemination are two areas that micro-blogging has driven.
  • Social commerce. Groupon told me they have 15 million subscribers in North America, and that’s getting pretty close to 10 percent of the U.S. adult population. The daily deal aspect of social commerce is close to critical mass; cheap, effective customer acquisition by local couponing is about to arrive.

Things to Remember

A few other aspects of the critical mass concept bear noting:

  • Although it shares some characteristics, like rapid growth, critical mass is not the same as the network effect. Network-effect markets increase in value exponentially with adoption, and lend themselves to winner-take-all outcomes.
  • That seemingly magic 15 percent figure is based on the target market. Technologies can achieve critical mass and “in-market scale” within particular audiences based on things like geography, common interests and lifestyle.
  • That said, there are many markets that depend on absolute numbers of users. For example, major brand advertisers have little interest in audiences under 1 million, no matter how targeted they might seem.

Question of the week

What other tech markets are reaching critical mass, and which ones won’t?