16 ms·

Why Facebook Keeps Beating Every Rival: It’s the Network

196 points by mgav 9y ago

pcmaffey 9y ago
Facebook isn't beating its biggest rival (yet). Google owns 54% of the digital ad market in the US, to Facebook's 20%. Social networking (just as Search for Google) is just data collection and distribution for its real product, ads. I wouldn't be surprised to see Comcast take a big bite of this market in the near future too (since they can now compete via data collection and distribution).
aub3bhat 9y ago
Snapchat's app is atrocious, and they have essentially ignored the "poor" customers. Why FB should not be allowed to provide a better user experience? I think we should be lauding Facebook/Instagram for providing their users a better more private user experience.
- mr_spothawk 9y ago
  > more private wat?
sekou 9y ago
Instagram was on the path to becoming a true rival to Facebook, that's why Mark Zuckerberg bought it. They had very savvy engineers working on a fantastic product; that's still true it's just happening under different ownership. Facebook didn't beat Snapchat with Facebook, it beat them with Instagram. They tried copying features directly to Facebook from Snapchat and that fell flat.
paradite 9y ago
Not sure about Facebook because I am no longer a user of Facebook. To me Facebook just felt no longer necessary once I understand that it is just trying to trick me to stay on the page by showing me things that are addictive to see or watch. Interestingly the same network vs feature idea can be said about LinkedIn. Recently they rolled out messaging feature on the main UI like what Facebook had, pretty good move to increase user engagement.
jdpedrie 9y ago
I was talking with a friend about this recently. I am not old enough to remember the days when Microsoft totally dominated and Bill Gates was literally Darth Vader, so in my eyes Facebook's position seems uniquely powerful and unstoppable. I'm not sure whether it's really so, or whether I'm just falling victim to a present-day bias.
- rublev 9y ago
  When they offer centralization, you go decentralized. Mastodon is neat and growing quickly.
- philipov 9y ago
  I remember the days of Microsoft's monopoly, and I feel that Fakebook's position is stronger than Microsoft's, but it's not unique. I feel that Google's position is stronger still. Between them and Amazon, there is more of an oligopoly than a monopoly now. They will compete amongst each other following whatever compromises they come up with, but any one of them is in a position to squash upstarts, for the good of the group.
  - guelo 9y ago
    If the government had not stepped in Microsoft would have owned the entire internet. They could have killed Firefox and Chrome by not allowing them to be installed. They were already building proprietary features into IE that only their products could use. The open web would be dead and become a proprietary web owned by Microsoft.
    - scholia 9y ago
      That was never going to happen. The value proposition for DOS and Windows was that they were open to running anything and everything. Microsoft was the ocean, not the shark. As for adding features to browsers, they all did that. Netscape tried to build its business on "looks better in Netscape", and Microsoft simply implemented support for Netscape features (much like it had implemented support for 1-2-3 and WordPerfect features in Office). There was never any prospect of "a proprietary web owned by Microsoft". In the mid-90s, Microsoft did have plans for a web-like network as a sort of distributed OLE (Blackbird), but quickly went "all in" on the web. The closest was the use of ActiveX controls on the web, but other browser makers could have supported ActiveX if they had wanted to. (Firefox decided against.) Otherwise, neither Firefox nor Chrome existed when the anti-trust case ended, and there has never been any prospect of Microsoft killing either. It was Netscape that featured in the anti-trust case, and Microsoft won the browser case 2-1 on appeal.
exelius 9y ago
It's hard to build a customer base when Facebook can just come in, copy you, and corner 95% of the market on the day they release. This is the exact same advantage that Microsoft had in the enterprise market. Sure, competitors could release enterprise products and have some success, but if Microsoft decided to copy you, they had an army of enterprise sales agreements already in place and would eat 50% of the available market in the first year. The network effects of their enterprise sales channel -- which existed at nearly every company in the world thanks to the ubiquity of Office documents -- made it very, very difficult to compete with them for a long time. Network effects are much stronger in the consumer space (mostly because the consumers are poorly educated about their choices, and often have little incentive to become informed). Which is why we're seeing Facebook eat the world when it comes to consumer communication platforms.
- Alex3917 9y ago
  > It's hard to build a customer base when Facebook can just come in, copy you, and corner 95% of the market on the day they release. Not really. Snapchat is getting copied because its functionality enhances the strategic value of Facebook's core assets. There are plenty of other businesses that would be easy for Facebook to copy technologically, but doing so would undermine the value of Facebook's core assets. Basically Snapchat brought a knife to a gunfight, with the expected results.
  - accountyaccount 9y ago
    Which is why Facebook can just leverage their login system to see when another site has a viable userbase and then just add the feature to Facebook. They're doing it with GoFundMe right now.
- chrischen 9y ago
  With Snapchat facebook isn't attacking with its network. It's cloning their features, but failing to actually get the very young demographic network.
  - cannotsay2017 9y ago
Spooky23 9y ago
The elephant in the room is... are people "switching" to Snapchat a thing? Is Facebook winning a war that wasn't fought? This sounds like somebody planted a seed of FUD about snapchat that ignores what's a bigger question in my mind -- are the users who typically choose Snapchat now choosing Facebook? I don't believe alot of Facebook narratives. Most of the people in my social circle count as part of their 1B messenger users, but all of their substantive communication is happening on iMessage. When you have billions of users, it's hard to make definitive statements about network effect, as even small variations are big. Facebook's network effect doesn't seem to have as much mojo as Microsoft or AOL did in the old days. Hell, AOL had millions of people paying $20/mo for a decade for nothing. Per Google, they have 1.86B monthly users. Per this article, Only 60% of Facebook users use messenger, Only 1/3 of Facebook users use instagram, Only 1/3 of Instagram users use stories. That's pretty telling to me, especially considering all of the ways they trick you to click on things and gin up the numbers.
- a_imho 9y ago
  I completely agree, and see this narrative gaining traction, at least in my social bubble. When enough will point the emperor is naked, the same network effect will make facebook into the next myspace.
- strangecyan 9y ago
  As I mentioned in another comment, joining Facebook is something that just isn't a good idea for young people. The network that is praised as the primary reason Facebook is successful in the article, does more damage to someone's future than gives them benefit in the present. Schools and Colleges running checks on Facebook for anything negative about them, finding one student and following the network for other, has affected some of my friends. As has employers and work experience checking Facebook. 'The Network' also means that family are suggested to friend you almost immediately; I don't need to explain the problems with that. Snapchat is a safe haven for creative, throw away content that isn't indexable, searchable, doesn't have a social graph or a permissions model.
  - hocuspocus 9y ago
shmerl 9y ago
Facebook has one thing it can't do - offer privacy respectful network. Competitors should use that to their advantage.
- foglerek 9y ago
  The vast majority (outside HN) would still choose the network where their friends are conveniently already located over privacy concerns. Especially when those concerns involve pictures of their cats or other trivial personal information. And so the network effects remain.
  - frandroid 9y ago
    > The vast majority (outside HN) I think one could build a strong userbase in countries where people want privacy from their governments, on top of the "HN crowd".
  - tajen 9y ago
    - I have many non-techy friends in their 20ies who don't post pictures or personal stuff to Facebook because "someone told them it's dangerous". They can't articulate the logic around this danger, that is the most surprising. - None of my sister's wedding pictures are on Facebook because of this reason – It was said loud on the mic during the ceremony. - My mother is very afraid of having her credit card stolen by a virus in Windows, that's why she always... refuses to install upgrades. It's not so bad: Better an old Windows than clicking on every Update button their find. - I don't watch people using their phones much, but when I do, I often ask them why they use one workaround instead of going straight to some place. "I was told it's better for privacy" is a frequent answer. I'm illustrating that non-tech-savvy people aren't ignoring the "privacy" signals. They may be doing the wrong thing in the moment, but they are severely frightened and they do look for ways to protect their privacy.
    - smelendez 9y ago
      I have my Facebook settings configured so I have to approve tags, and honestly I'd prefer people not post photos of me or comments like "had a great time with Steve!" without asking. Most of the time it's fine, but sometimes the fact that someone's in a certain place with certain people, or not in another place with other people, is a sensitive issue. Sometimes it can even become a sensitive issue later on (imagine being tagged in a wedding reception five years ago, standing next to a then-unknown Martin Shkreli).
101km 9y ago
A leaky bucket, no matter how large, will eventually drain.
- simias 9y ago
  Not if you fill it up faster than it drains.
  - 101km 9y ago
    The pool of users is finite.
    - Qub3d 9y ago
      For more on this subject, see this relevant What-if? post: https://what-if.xkcd.com/69/ https://what-if.xkcd.com/69/
WikipediasBad 9y ago
This might not be a popular opinion here (so please reply too if you intend to downvote me), and I might be biased because I just came back from F8 Dev Conference yesterday, but I don't think the reason Facebook beats a lot of rivals is network effects, it's because of Zuckerberg. He runs a very tight but organized ship. Let's be real, before facebook and all this stuff, mySpace had incredible amount of network effect and market share for those days, as did friendster (for that era of technology). Twitter had a network effect (albeit, an interest graph not a direct network of friends) and it is not doing well at all, even in areas where interest graph network effects should come in and dominate. You get my idea. I might be biased here because I got a small few minutes to converse with Zuckerberg at F8, but I think calling things simply "the network effect" and being done with it as to why facebook is so successful is a bit disingenuous, it's network effect + right leadership (aka Zuckerberg and to a lesser extent Sheryl). A lot of companies had network effects before facebook and didn't manage their advantage properly. Mark seems to be the overseer of all decisions at facebook and so far almost everything (except for crushing Snap) has worked flawlessly. It remains to be seen what happens with Snapchat.
- a_imho 9y ago
  Facebook Work was marketed as the best thing since sliced bread but I yet to see it making any waves for example.
  - WikipediasBad 9y ago
    Actually you're right. I can see this being one of facebook's bigger high profile flops. After talking to the "Facebook at Work" team at F8 (very very nice people), I thought that they might be in for a rougher time getting their corporate product to compete. According to what I understood, the project is a satellite product being developed in the UK offsite from facebook's HQ in Menlo (and as a result absent from the real leadership's radar). It seems like it will be difficult for them to really penetrate into the non-consumer space without direct line of leadership from upper management like Zuckerberg. This product seems more of an experimental "throw at the wall" and see if it could potentially stick. I am going to agree with you here and say likely no.
strangecyan 9y ago
The idea that Facebook has beaten Snapchat just because they've cloned features is such a weird proposition to me. Facebook's problem is not that they don't have features, it IS the network that is stopping kids from signing up. Snapchat is a safe haven for creative, throw away content that isn't indexable, searchable, doesn't have a social graph or a permissions model.
- dpeck 9y ago
  I don't know how anyone could think of content on facebook as being indexable or searchable. Search is still aweful
  - tumblen 9y ago
    Search for users is bad, but the data is indexed and that index is being used and sold behind the scenes all the time.
    - jat850 9y ago
      I don't know anything about it, but how is it known that this is not the case with Snapchat as well? (I realize you're not the OP in this comment chain, but still.)
      - strangecyan 9y ago
        I assume it is the case with Snapchat, I don't think you can build a service at that scale without collecting some kind of data. The difference, I think is two-fold. We know that Facebook collects, analyses and keeps data and when you use Facebook it feels like it. The other difference is that Snapchat doesn't use that data to make a people or thing recommendation engine, which is what turns people off about Facebook.
        jat850 9y ago
        Fair answer! I don't use either myself so your perspective on it sheds a lot of light. Thank you.
joshjkim 9y ago
This a good start, but I think there could be a lot more thought given to how we should think about monopolies in the context of markets where networks effects are crucial to the business value (aka. Facebook and Google most obviously, arguably Amazon, Apple), because one logical conclusion is that in a market where network effects are a major factor, the biggest network should be best positioned to provide the most value and therefore (assuming it doesn't actively eff things up on other fronts) should continue to grow until it dominates the market...which seems to pretty much be what happened, and it makes pretty good sense for the most part. in these cases, it actually seems BAD to break these networks apart, since their scale is arguably one of its primary values to the customer - this doesn't mean of course that they can't abuse their monopoly powers (I think they probably do to some degree and will continue to), but interesting to think that the traditional "break up monopolies" impulse doesn't make as much sense. this leads me to think it will just be more consumer-protection-related regulation (under the banner of consumer privacy, or maybe even public health, given all the "social media addiction" thought pieces out there these days ha). (repurposed a prior discussion but arguably more relevant here!) One thing I've found super interesting/impressive about Snap is that it didn't try to outcompete FB in terms of sheer network size for its usage stickiness, and instead turned smaller, tighter and more private networks into a differentiator, while at the same time providing advertisers/brands with a competitively massive audience - not an easy thing to identify, much less execute on. TBD if that differentiator is enough to keep them alive vs. FB's more traditional network-effect-driven advantage, which will be hard to beat on its own terms. I think Snap's success will depend a lot on its ability to avoid being tempted to play that game (see: Twitter!). random other thought: this all also reminds me that Mark Zuckerberg has not made a peep about wanting FB to be thought of as a "utility" in a long time (or maybe he has and I just missed it...but couldn't find any recent mentions, see this talk from 2013: https://techcrunch.com/2013/09/18/facebook-doesnt-want-to-be... https://techcrunch.com/2013/09/18/facebook-doesnt-want-to-be...), probably in part because they are now a lot more at risk than ever before of being regulated like one. Also kind of funny to hear him talk about "we don't want FB to be cool" too, because now it seems like FB very much wants to be cool again now that Snap has become cool and has threatening user counts.
martinald 9y ago
I feel there is something shady missing between all these crazy headline stats. For example, Facebook messenger stats seem gamed to me. I never really use it, but every time i accept a friend request it pops up a fake messenger notification telling me that i can message that contact (opening messenger of course). Furthermore the quality of news feed has dropped of a cliff for me. It's really just posts from pages and sponsored posts now. Very few people actually post.
bluetwo 9y ago
If you look at the concept of disruption (not what most people think disruption is, but the actual definition from the guy who coined the term in The Innovator's Dilemma), it is a small competitor that arises that better serves a need that only a small part of the market cares about that goes on top create a true competitor. They don't have to do everything the biggie does, they just have to do one important thing better. For instance, Instagram might have been a Facebook killer, which is why they bought them early. Oculus Rift might also have been (but that's a stretch I think). Just to play it safe they also bought them. So what are the features that a minority of the market cares about at this point that might spawn a competitor that would challenge FB? Someone dedicated to privacy, perhaps. Someone with a model that eliminates advertising, maybe, even if you have to pay a membership fee. Perhaps someone who does a better job of incorporating articles from third party sources without all the spam/fake news that clogs feeds. Maybe someone who does a better job of using the camera, or mobile-first/only technology, like pure audio instead of text/pictures. Other ideas?
- joe_the_user 9y ago
  I would say that a lot of Facebook competitors aim for the kind of advantage you are describing. And inherently fail because of the combination of Facebook being able roll-out a similar feature, Facebook having network effect and Facebook not being especially demanding/abusive towards its customer base - on the later point, Facebook has banned posts or people registering false names but back-tracked and/or not been especially aggressive about it. They began as the tool of the early adopter but now are the tool of your grandmother with the stickiness of that. Consider that when Google decided to invest in Google+, they dove immediately into demanding more from customers than Facebook did with their real names policy. With all its success, Facebook's profitability still comes into doubt from time to time because they aren't squeezing their customers as they could. Which is altogether is to say that all Facebook's rivals have scheme to extract more from the customers than Facebook and thus it's similar to, but as extreme as Craiglist rivals - they can never be as good they because they're constrained to come with a model they expect will eventually make more money.
  - bluetwo 9y ago
xj9 9y ago
do we really need a bunch of rich fucks staring at us while we're talking to our friends? how do you even make friends in that kind of environment? shouldn't social networks be, you know, personal? we haven't won yet, but we will. https://www.bbnet.io/ https://www.bbnet.io/ http://www.fediverse.org/ http://www.fediverse.org/ https://mastodon.social/ https://mastodon.social/ https://gnu.io/social/ https://gnu.io/social/
- tajen 9y ago
  This is awesome, they're just Twitter lookalikes! but better, with federation, this is just what we needed, awesome! ...but as a company, I can't do advertising, should I complain?
  - Neliquat 9y ago
    Are you telling me most tweets arent promotional already?!
- mr_spothawk 9y ago
  && https://GitHub.com/ssbc/patchwork https://GitHub.com/ssbc/patchwork got a lot of traction a few weeks ago. super cool group of folks there, and very interesting technology in SSBCs repos.
- guelo 9y ago
  Those are all twitter-style default-public networks, not really good for friends.
  - xj9 9y ago
    tell that to all of the friends i've made here. it is very different from twitter somehow. you really do connect with people.
quotemstr 9y ago
It's also culture: Facebook is data-driven and experiment-happy in a way I haven't seen at any other tech company. Everyone at the company wants to minimize red tape and heavyweight process, and it really shows in how quickly Facebook can develop software and in how few developers they need to do it. I've worked at Facebook; I've worked elsewhere. There are real lessons everyone else should be taking from FB's engineering culture. Managers at other companies give lip service to developer velocity, but in the end, they still end up creating the same kind of bureaucratic slowdowns that have hobbled the industry for decades, mostly because they can't let go and delegate real decision-making power to ICs. It's "Yes, we care, but bullshit, so we need process" over and over, stomping on the face of human ingenuity forever. Facebook means it when they say they care about developer productivity and code velocity, and that should terrify everyone else.
- SadWebDeveloper 9y ago
  what the f... does "culture" have to do with FB vs Snapchat. I get it, they copied the functionality fast but only because it was a twist of what FB already does not because FB-engies were the best in town but because it was too easy.
  - askafriend 9y ago
    If you think it's easy then you haven't developed consumer applications at that scale and quality before. It shows in how you dismiss the process. There's copying and then there's copying well and fast. Copying isn't bad in and of itself - not at all.
    - SadWebDeveloper 9y ago
      I always cringe when a developer uses "scale" as intimidation tactic for why "my code is better than your code" and if you believe that only a handful of "facebook engineers" are the gods of scalability then you should probably switch careers.
      - 9y ago
jaredcwhite 9y ago
I really find it troubling that commentators insist on seeing this as a zero-sum game: that in order for Facebook to win, others need to lose, or visa-versa. Why can there only be one social network? What is wrong with competition? Let Snapchat be Snapchat, Twitter be Twitter, etc. The constant media frenzy over how fast everyone's growing and if they stop growing (aka Twitter) it's the end, just seems bonkers to me. The only reason for this rationale is Wall Street and public stock offerings. Twitter's stock price will sink if they don't continue a hyperbolic growth path. Never mind if the product is good, or if the existing users are happy. I would actually argue that Twitter's product has been floundering and its existing users feeling the blues BECAUSE of Twitter's need to drive growth. If Twitter had decided a couple of years ago to focus on making its existing userbase happy as well as third-party developers contributing to the capability of the network, Twitter would be in a stronger position today. So I don't agree at all with the premise of this article. Facebook isn't "beating" anybody. If everyone suddenly leaves Snapchat and goes back to using only Facebook, that's not because Facebook is evil, it's because Snapchat looses its ability to develop products people want. If everyone suddenly leaves Twitter and goes back to only Facebook, that's Twitter's own fault, plain and simple.
- marinman 9y ago
  It does become zero sum when you consider they're all vying for similar ad dollars. For years, Twitter didn't mind being compared to Facebook because it meant higher valuations for potential growth and ad revenue. But playing that game meant it actually had to deliver on the growth and ad performance. Snapchat is interesting in that it appears to be going after more traditional brand/TV dollars, which is still evading the performant-oriented ad dollars on Facebook. And both Twitter and Snapchat knew the game they were playing by raising so much venture capital at such high valuations. They could have stayed private longer, raised less at lower valuations and laser-focused on product and making nominal returns. But they chose to go the other route and that means they have to deliver on outsized profits eventually.
- dsjoerg 9y ago
  There's a zero-sum game in the war for attention. Each person only has 16-17 hours a day of attention to give. There is also a zero-sum game in the war for how I choose to stay in touch with my friends. For each person, they are going to choose one or maybe two ways to do group updates.
atishay811 9y ago
I don't think Facebook is beating snapchat. When you start to follow you always stay a step behind. Doing that with a bloated behemoth of a product is very difficult. Camera effects were successfully copied as they were a new concept, innovative but not disruptive. But the real challenge would come if snapchat or someone else comes out with something that is already there in Facebook. If Snapchat released a better version of the like button or the wall, will Facebook be willing to risk changing the like button or the wall to match snapchat? Will it risk losing the lovers of the wall for the lovers of the new thing that replaces the wall.
somid3 9y ago
Yes, this is typically called network externalities, or network effects. It is an ingredient that increases defend-ability by locking a critical mass.
ccvannorman 9y ago
The dominance of monopoly players will not be challenged * until * it's normal for majority of consumers to have an AI / middleware that can choose the best option without the consumer needing to know it's a monopoly player or not (brand) Example: I want to create an event with my friends at a local pub. In 2017, I create a facebook event and invite my friends. I use Google maps or Yelp to find an appropriate pub. In 2040, I tell my Mantle / AI by voice, "make an event for me and friends at local pub, moderate price, close to downtown." Without me ever knowing what services are used, I'm told to meet my friends at some location, and they are told as well. I never have to interface with Facebook, Google, Yelp, or anything but my Mantle. I cannot wait for this, as I am completely sick of Facebook and Google fucking up basic functionality and eating competitors. I also don't want to do the work of constantly knowing what is the best competitor to use for simple services.
- oblio 9y ago
  Who's going to produce your AI and why won't they be biased? ;)
kensai 9y ago
Question for all: would it work for a social network startup go the opposite way? copy the best of Facebook functionality, without the bloat, the overhead, and the ads? (but then how would they make money... hmm)
partycoder 9y ago
While there were communities with large and working social graphs like ICQ, AIM, Myspace, etc., Facebook had a more committed approach emphasizing real identities rather than pseudonyms. Being first to market with an accurate social graph consisting of real-life identities is what gave Facebook its advantage.
- kornakiewicz 9y ago
  And that's biggest disadvantage for most young people. Also, Linkedin was earlier, but real-life identities was first, because of understandable purposes.
rbur0425 9y ago
i swear these media outlets read hacker news/medium/any other popular blog site and just regurgitate information
adventured 9y ago
I keep wondering if Snapchat is going to end up being Facebook's Microsoft-Netscape situation. If Snapchat goes down (almost guaranteed at this point), it's going to be universally blamed on Facebook. That blame - along with the likely howls from Snapchat and its backers - will intensify anti-trust attention. The bundling premise that got anti-trust attention with Microsoft's Windows monopoly, will draw the exact same attention to Facebook leveraging its network to smash competitors while it has a monopoly or near-monopoly in social (Instagram is dramatically reinforced by Facebook).
coleifer 9y ago
We're talking about FB's decision to add mustaches to your face while posing for a selfie. It's couched as a debate about business ethics / innovation, but remember: we're talking about dog ears and mustaches.
thr0waway1239 9y ago
If you feel, like I do, that if WhatsApp were not acquired by Facebook a) their growth rate would not have been much smaller b) they would probably have just as much or greater user engagement than what FB has today then the actual question should be: "What is actually going on which allows such acquisitions to bypass the antitrust laws?"
- tim333 9y ago
  I was thinking it could be a good thing to use antitrust laws to prevent Facebook dominating by buying its competitors. I mean winning by having the best product is fair play but not by buying anyone who may be a threat. I'm not up on antitrust law - I'm guessing they don't apply to social networks currently?
- thesagan 9y ago
  Regarding Google and Facebook, I'm hearing antitrust muttered in the office where I work, lately. (A digital publisher) I'm ready for some more noise on this issue, publicly.
malikNF 9y ago
I finally used snap chat a few months ago, and the experience was just annoying. Don't get me wrong, the whole take a snap of your face, make your voice sound funny is really fun and all, but the UI was just annoying, there were emoticons appearing next to my friends names, I had to google it to find out what it meant. There was some number next to my name, next to my friends names, god knows why its there, i'm assuming something to do with how many snaps you send. The navigation.. just really unintuitive. So as a user it makes me not want to explore the app, hye i got a snap from a friend, okay watch send a "haha nice" message and forget about the app. While it's kinna scary to watch how much power FB has, I can't help but think its snaps own damn fault for making something that does one thing, and for not taking any measures to make it do more, to get me to stay with the app, to get me to use it more.
malikNF 9y ago
I finally used snap chat a few months ago, and the experience was just annoying. Don't get me wrong, the whole take a snap of your face, make your voice sound funny is really fun and all, but the UI was just annoying, there were emoticons appearing next to my friends names, I had to google it to find out what it meant. There was some number next to my name, next to my friends names, god knows why its there, i'm assuming something to do with how many snaps you send. The navigation.. just really unintuitive. So as a user it makes me not want to explore the app, hye i got a snap from a friend, okay watch send a "haha nice" message and forget about the app. While it's kinna scary to watch how much power FB has, I can't help but think its snaps own damn fault for making something that does one thing, and for not taking any measures to make it do more, to get me to stay with the app, to get me to use it more.

196 points by mgav 9y ago

Facebook isn't beating its biggest rival (yet). Google owns 54% of the digital ad market in the US, to Facebook's 20%. Social networking (just as Search for Google) is just data collection and distribution for its real product, ads. I wouldn't be surprised to see Comcast take a big bite of this market in the near future too (since they can now compete via data collection and distribution).

aub3bhat 9y ago

Snapchat's app is atrocious, and they have essentially ignored the "poor" customers. Why FB should not be allowed to provide a better user experience? I think we should be lauding Facebook/Instagram for providing their users a better more private user experience.

mr_spothawk 9y ago
> more private wat?

sekou 9y ago

Instagram was on the path to becoming a true rival to Facebook, that's why Mark Zuckerberg bought it. They had very savvy engineers working on a fantastic product; that's still true it's just happening under different ownership. Facebook didn't beat Snapchat with Facebook, it beat them with Instagram. They tried copying features directly to Facebook from Snapchat and that fell flat.

paradite 9y ago

Not sure about Facebook because I am no longer a user of Facebook. To me Facebook just felt no longer necessary once I understand that it is just trying to trick me to stay on the page by showing me things that are addictive to see or watch. Interestingly the same network vs feature idea can be said about LinkedIn. Recently they rolled out messaging feature on the main UI like what Facebook had, pretty good move to increase user engagement.

jdpedrie 9y ago

I was talking with a friend about this recently. I am not old enough to remember the days when Microsoft totally dominated and Bill Gates was literally Darth Vader, so in my eyes Facebook's position seems uniquely powerful and unstoppable. I'm not sure whether it's really so, or whether I'm just falling victim to a present-day bias.

rublev 9y ago
When they offer centralization, you go decentralized. Mastodon is neat and growing quickly.
philipov 9y ago
I remember the days of Microsoft's monopoly, and I feel that Fakebook's position is stronger than Microsoft's, but it's not unique. I feel that Google's position is stronger still. Between them and Amazon, there is more of an oligopoly than a monopoly now. They will compete amongst each other following whatever compromises they come up with, but any one of them is in a position to squash upstarts, for the good of the group.
- guelo 9y ago
  If the government had not stepped in Microsoft would have owned the entire internet. They could have killed Firefox and Chrome by not allowing them to be installed. They were already building proprietary features into IE that only their products could use. The open web would be dead and become a proprietary web owned by Microsoft.
  - scholia 9y ago
    That was never going to happen. The value proposition for DOS and Windows was that they were open to running anything and everything. Microsoft was the ocean, not the shark. As for adding features to browsers, they all did that. Netscape tried to build its business on "looks better in Netscape", and Microsoft simply implemented support for Netscape features (much like it had implemented support for 1-2-3 and WordPerfect features in Office). There was never any prospect of "a proprietary web owned by Microsoft". In the mid-90s, Microsoft did have plans for a web-like network as a sort of distributed OLE (Blackbird), but quickly went "all in" on the web. The closest was the use of ActiveX controls on the web, but other browser makers could have supported ActiveX if they had wanted to. (Firefox decided against.) Otherwise, neither Firefox nor Chrome existed when the anti-trust case ended, and there has never been any prospect of Microsoft killing either. It was Netscape that featured in the anti-trust case, and Microsoft won the browser case 2-1 on appeal.

exelius 9y ago

It's hard to build a customer base when Facebook can just come in, copy you, and corner 95% of the market on the day they release. This is the exact same advantage that Microsoft had in the enterprise market. Sure, competitors could release enterprise products and have some success, but if Microsoft decided to copy you, they had an army of enterprise sales agreements already in place and would eat 50% of the available market in the first year. The network effects of their enterprise sales channel -- which existed at nearly every company in the world thanks to the ubiquity of Office documents -- made it very, very difficult to compete with them for a long time. Network effects are much stronger in the consumer space (mostly because the consumers are poorly educated about their choices, and often have little incentive to become informed). Which is why we're seeing Facebook eat the world when it comes to consumer communication platforms.

Alex3917 9y ago
> It's hard to build a customer base when Facebook can just come in, copy you, and corner 95% of the market on the day they release. Not really. Snapchat is getting copied because its functionality enhances the strategic value of Facebook's core assets. There are plenty of other businesses that would be easy for Facebook to copy technologically, but doing so would undermine the value of Facebook's core assets. Basically Snapchat brought a knife to a gunfight, with the expected results.
- accountyaccount 9y ago
  Which is why Facebook can just leverage their login system to see when another site has a viable userbase and then just add the feature to Facebook. They're doing it with GoFundMe right now.
chrischen 9y ago
With Snapchat facebook isn't attacking with its network. It's cloning their features, but failing to actually get the very young demographic network.
- cannotsay2017 9y ago

Spooky23 9y ago

The elephant in the room is... are people "switching" to Snapchat a thing? Is Facebook winning a war that wasn't fought? This sounds like somebody planted a seed of FUD about snapchat that ignores what's a bigger question in my mind -- are the users who typically choose Snapchat now choosing Facebook? I don't believe alot of Facebook narratives. Most of the people in my social circle count as part of their 1B messenger users, but all of their substantive communication is happening on iMessage. When you have billions of users, it's hard to make definitive statements about network effect, as even small variations are big. Facebook's network effect doesn't seem to have as much mojo as Microsoft or AOL did in the old days. Hell, AOL had millions of people paying $20/mo for a decade for nothing. Per Google, they have 1.86B monthly users. Per this article, Only 60% of Facebook users use messenger, Only 1/3 of Facebook users use instagram, Only 1/3 of Instagram users use stories. That's pretty telling to me, especially considering all of the ways they trick you to click on things and gin up the numbers.

a_imho 9y ago
I completely agree, and see this narrative gaining traction, at least in my social bubble. When enough will point the emperor is naked, the same network effect will make facebook into the next myspace.
strangecyan 9y ago
As I mentioned in another comment, joining Facebook is something that just isn't a good idea for young people. The network that is praised as the primary reason Facebook is successful in the article, does more damage to someone's future than gives them benefit in the present. Schools and Colleges running checks on Facebook for anything negative about them, finding one student and following the network for other, has affected some of my friends. As has employers and work experience checking Facebook. 'The Network' also means that family are suggested to friend you almost immediately; I don't need to explain the problems with that. Snapchat is a safe haven for creative, throw away content that isn't indexable, searchable, doesn't have a social graph or a permissions model.
- hocuspocus 9y ago

shmerl 9y ago

Facebook has one thing it can't do - offer privacy respectful network. Competitors should use that to their advantage.

foglerek 9y ago
The vast majority (outside HN) would still choose the network where their friends are conveniently already located over privacy concerns. Especially when those concerns involve pictures of their cats or other trivial personal information. And so the network effects remain.
- frandroid 9y ago
  > The vast majority (outside HN) I think one could build a strong userbase in countries where people want privacy from their governments, on top of the "HN crowd".
- tajen 9y ago
  - I have many non-techy friends in their 20ies who don't post pictures or personal stuff to Facebook because "someone told them it's dangerous". They can't articulate the logic around this danger, that is the most surprising. - None of my sister's wedding pictures are on Facebook because of this reason – It was said loud on the mic during the ceremony. - My mother is very afraid of having her credit card stolen by a virus in Windows, that's why she always... refuses to install upgrades. It's not so bad: Better an old Windows than clicking on every Update button their find. - I don't watch people using their phones much, but when I do, I often ask them why they use one workaround instead of going straight to some place. "I was told it's better for privacy" is a frequent answer. I'm illustrating that non-tech-savvy people aren't ignoring the "privacy" signals. They may be doing the wrong thing in the moment, but they are severely frightened and they do look for ways to protect their privacy.
  - smelendez 9y ago
    I have my Facebook settings configured so I have to approve tags, and honestly I'd prefer people not post photos of me or comments like "had a great time with Steve!" without asking. Most of the time it's fine, but sometimes the fact that someone's in a certain place with certain people, or not in another place with other people, is a sensitive issue. Sometimes it can even become a sensitive issue later on (imagine being tagged in a wedding reception five years ago, standing next to a then-unknown Martin Shkreli).

101km 9y ago

A leaky bucket, no matter how large, will eventually drain.

simias 9y ago
Not if you fill it up faster than it drains.
- 101km 9y ago
  The pool of users is finite.
  - Qub3d 9y ago
    For more on this subject, see this relevant What-if? post: https://what-if.xkcd.com/69/ https://what-if.xkcd.com/69/

WikipediasBad 9y ago

This might not be a popular opinion here (so please reply too if you intend to downvote me), and I might be biased because I just came back from F8 Dev Conference yesterday, but I don't think the reason Facebook beats a lot of rivals is network effects, it's because of Zuckerberg. He runs a very tight but organized ship. Let's be real, before facebook and all this stuff, mySpace had incredible amount of network effect and market share for those days, as did friendster (for that era of technology). Twitter had a network effect (albeit, an interest graph not a direct network of friends) and it is not doing well at all, even in areas where interest graph network effects should come in and dominate. You get my idea. I might be biased here because I got a small few minutes to converse with Zuckerberg at F8, but I think calling things simply "the network effect" and being done with it as to why facebook is so successful is a bit disingenuous, it's network effect + right leadership (aka Zuckerberg and to a lesser extent Sheryl). A lot of companies had network effects before facebook and didn't manage their advantage properly. Mark seems to be the overseer of all decisions at facebook and so far almost everything (except for crushing Snap) has worked flawlessly. It remains to be seen what happens with Snapchat.

a_imho 9y ago
Facebook Work was marketed as the best thing since sliced bread but I yet to see it making any waves for example.
- WikipediasBad 9y ago
  Actually you're right. I can see this being one of facebook's bigger high profile flops. After talking to the "Facebook at Work" team at F8 (very very nice people), I thought that they might be in for a rougher time getting their corporate product to compete. According to what I understood, the project is a satellite product being developed in the UK offsite from facebook's HQ in Menlo (and as a result absent from the real leadership's radar). It seems like it will be difficult for them to really penetrate into the non-consumer space without direct line of leadership from upper management like Zuckerberg. This product seems more of an experimental "throw at the wall" and see if it could potentially stick. I am going to agree with you here and say likely no.

strangecyan 9y ago

The idea that Facebook has beaten Snapchat just because they've cloned features is such a weird proposition to me. Facebook's problem is not that they don't have features, it IS the network that is stopping kids from signing up. Snapchat is a safe haven for creative, throw away content that isn't indexable, searchable, doesn't have a social graph or a permissions model.

dpeck 9y ago
I don't know how anyone could think of content on facebook as being indexable or searchable. Search is still aweful
- tumblen 9y ago
  Search for users is bad, but the data is indexed and that index is being used and sold behind the scenes all the time.
  - jat850 9y ago
    I don't know anything about it, but how is it known that this is not the case with Snapchat as well? (I realize you're not the OP in this comment chain, but still.)
    - strangecyan 9y ago
      I assume it is the case with Snapchat, I don't think you can build a service at that scale without collecting some kind of data. The difference, I think is two-fold. We know that Facebook collects, analyses and keeps data and when you use Facebook it feels like it. The other difference is that Snapchat doesn't use that data to make a people or thing recommendation engine, which is what turns people off about Facebook.
      - jat850 9y ago
        Fair answer! I don't use either myself so your perspective on it sheds a lot of light. Thank you.

joshjkim 9y ago

This a good start, but I think there could be a lot more thought given to how we should think about monopolies in the context of markets where networks effects are crucial to the business value (aka. Facebook and Google most obviously, arguably Amazon, Apple), because one logical conclusion is that in a market where network effects are a major factor, the biggest network should be best positioned to provide the most value and therefore (assuming it doesn't actively eff things up on other fronts) should continue to grow until it dominates the market...which seems to pretty much be what happened, and it makes pretty good sense for the most part. in these cases, it actually seems BAD to break these networks apart, since their scale is arguably one of its primary values to the customer - this doesn't mean of course that they can't abuse their monopoly powers (I think they probably do to some degree and will continue to), but interesting to think that the traditional "break up monopolies" impulse doesn't make as much sense. this leads me to think it will just be more consumer-protection-related regulation (under the banner of consumer privacy, or maybe even public health, given all the "social media addiction" thought pieces out there these days ha). (repurposed a prior discussion but arguably more relevant here!) One thing I've found super interesting/impressive about Snap is that it didn't try to outcompete FB in terms of sheer network size for its usage stickiness, and instead turned smaller, tighter and more private networks into a differentiator, while at the same time providing advertisers/brands with a competitively massive audience - not an easy thing to identify, much less execute on. TBD if that differentiator is enough to keep them alive vs. FB's more traditional network-effect-driven advantage, which will be hard to beat on its own terms. I think Snap's success will depend a lot on its ability to avoid being tempted to play that game (see: Twitter!). random other thought: this all also reminds me that Mark Zuckerberg has not made a peep about wanting FB to be thought of as a "utility" in a long time (or maybe he has and I just missed it...but couldn't find any recent mentions, see this talk from 2013: https://techcrunch.com/2013/09/18/facebook-doesnt-want-to-be... https://techcrunch.com/2013/09/18/facebook-doesnt-want-to-be...), probably in part because they are now a lot more at risk than ever before of being regulated like one. Also kind of funny to hear him talk about "we don't want FB to be cool" too, because now it seems like FB very much wants to be cool again now that Snap has become cool and has threatening user counts.

martinald 9y ago

I feel there is something shady missing between all these crazy headline stats. For example, Facebook messenger stats seem gamed to me. I never really use it, but every time i accept a friend request it pops up a fake messenger notification telling me that i can message that contact (opening messenger of course). Furthermore the quality of news feed has dropped of a cliff for me. It's really just posts from pages and sponsored posts now. Very few people actually post.

bluetwo 9y ago

If you look at the concept of disruption (not what most people think disruption is, but the actual definition from the guy who coined the term in The Innovator's Dilemma), it is a small competitor that arises that better serves a need that only a small part of the market cares about that goes on top create a true competitor. They don't have to do everything the biggie does, they just have to do one important thing better. For instance, Instagram might have been a Facebook killer, which is why they bought them early. Oculus Rift might also have been (but that's a stretch I think). Just to play it safe they also bought them. So what are the features that a minority of the market cares about at this point that might spawn a competitor that would challenge FB? Someone dedicated to privacy, perhaps. Someone with a model that eliminates advertising, maybe, even if you have to pay a membership fee. Perhaps someone who does a better job of incorporating articles from third party sources without all the spam/fake news that clogs feeds. Maybe someone who does a better job of using the camera, or mobile-first/only technology, like pure audio instead of text/pictures. Other ideas?

joe_the_user 9y ago
I would say that a lot of Facebook competitors aim for the kind of advantage you are describing. And inherently fail because of the combination of Facebook being able roll-out a similar feature, Facebook having network effect and Facebook not being especially demanding/abusive towards its customer base - on the later point, Facebook has banned posts or people registering false names but back-tracked and/or not been especially aggressive about it. They began as the tool of the early adopter but now are the tool of your grandmother with the stickiness of that. Consider that when Google decided to invest in Google+, they dove immediately into demanding more from customers than Facebook did with their real names policy. With all its success, Facebook's profitability still comes into doubt from time to time because they aren't squeezing their customers as they could. Which is altogether is to say that all Facebook's rivals have scheme to extract more from the customers than Facebook and thus it's similar to, but as extreme as Craiglist rivals - they can never be as good they because they're constrained to come with a model they expect will eventually make more money.
- bluetwo 9y ago

xj9 9y ago

do we really need a bunch of rich fucks staring at us while we're talking to our friends? how do you even make friends in that kind of environment? shouldn't social networks be, you know, personal? we haven't won yet, but we will. https://www.bbnet.io/ https://www.bbnet.io/ http://www.fediverse.org/ http://www.fediverse.org/ https://mastodon.social/ https://mastodon.social/ https://gnu.io/social/ https://gnu.io/social/

tajen 9y ago
This is awesome, they're just Twitter lookalikes! but better, with federation, this is just what we needed, awesome! ...but as a company, I can't do advertising, should I complain?
- Neliquat 9y ago
  Are you telling me most tweets arent promotional already?!
mr_spothawk 9y ago
&& https://GitHub.com/ssbc/patchwork https://GitHub.com/ssbc/patchwork got a lot of traction a few weeks ago. super cool group of folks there, and very interesting technology in SSBCs repos.
guelo 9y ago
Those are all twitter-style default-public networks, not really good for friends.
- xj9 9y ago
  tell that to all of the friends i've made here. it is very different from twitter somehow. you really do connect with people.

quotemstr 9y ago

It's also culture: Facebook is data-driven and experiment-happy in a way I haven't seen at any other tech company. Everyone at the company wants to minimize red tape and heavyweight process, and it really shows in how quickly Facebook can develop software and in how few developers they need to do it. I've worked at Facebook; I've worked elsewhere. There are real lessons everyone else should be taking from FB's engineering culture. Managers at other companies give lip service to developer velocity, but in the end, they still end up creating the same kind of bureaucratic slowdowns that have hobbled the industry for decades, mostly because they can't let go and delegate real decision-making power to ICs. It's "Yes, we care, but bullshit, so we need process" over and over, stomping on the face of human ingenuity forever. Facebook means it when they say they care about developer productivity and code velocity, and that should terrify everyone else.

SadWebDeveloper 9y ago
what the f... does "culture" have to do with FB vs Snapchat. I get it, they copied the functionality fast but only because it was a twist of what FB already does not because FB-engies were the best in town but because it was too easy.
- askafriend 9y ago
  If you think it's easy then you haven't developed consumer applications at that scale and quality before. It shows in how you dismiss the process. There's copying and then there's copying well and fast. Copying isn't bad in and of itself - not at all.
  - SadWebDeveloper 9y ago
    I always cringe when a developer uses "scale" as intimidation tactic for why "my code is better than your code" and if you believe that only a handful of "facebook engineers" are the gods of scalability then you should probably switch careers.
    - 9y ago

jaredcwhite 9y ago

I really find it troubling that commentators insist on seeing this as a zero-sum game: that in order for Facebook to win, others need to lose, or visa-versa. Why can there only be one social network? What is wrong with competition? Let Snapchat be Snapchat, Twitter be Twitter, etc. The constant media frenzy over how fast everyone's growing and if they stop growing (aka Twitter) it's the end, just seems bonkers to me. The only reason for this rationale is Wall Street and public stock offerings. Twitter's stock price will sink if they don't continue a hyperbolic growth path. Never mind if the product is good, or if the existing users are happy. I would actually argue that Twitter's product has been floundering and its existing users feeling the blues BECAUSE of Twitter's need to drive growth. If Twitter had decided a couple of years ago to focus on making its existing userbase happy as well as third-party developers contributing to the capability of the network, Twitter would be in a stronger position today. So I don't agree at all with the premise of this article. Facebook isn't "beating" anybody. If everyone suddenly leaves Snapchat and goes back to using only Facebook, that's not because Facebook is evil, it's because Snapchat looses its ability to develop products people want. If everyone suddenly leaves Twitter and goes back to only Facebook, that's Twitter's own fault, plain and simple.

marinman 9y ago
It does become zero sum when you consider they're all vying for similar ad dollars. For years, Twitter didn't mind being compared to Facebook because it meant higher valuations for potential growth and ad revenue. But playing that game meant it actually had to deliver on the growth and ad performance. Snapchat is interesting in that it appears to be going after more traditional brand/TV dollars, which is still evading the performant-oriented ad dollars on Facebook. And both Twitter and Snapchat knew the game they were playing by raising so much venture capital at such high valuations. They could have stayed private longer, raised less at lower valuations and laser-focused on product and making nominal returns. But they chose to go the other route and that means they have to deliver on outsized profits eventually.
dsjoerg 9y ago
There's a zero-sum game in the war for attention. Each person only has 16-17 hours a day of attention to give. There is also a zero-sum game in the war for how I choose to stay in touch with my friends. For each person, they are going to choose one or maybe two ways to do group updates.

atishay811 9y ago

I don't think Facebook is beating snapchat. When you start to follow you always stay a step behind. Doing that with a bloated behemoth of a product is very difficult. Camera effects were successfully copied as they were a new concept, innovative but not disruptive. But the real challenge would come if snapchat or someone else comes out with something that is already there in Facebook. If Snapchat released a better version of the like button or the wall, will Facebook be willing to risk changing the like button or the wall to match snapchat? Will it risk losing the lovers of the wall for the lovers of the new thing that replaces the wall.

somid3 9y ago

Yes, this is typically called network externalities, or network effects. It is an ingredient that increases defend-ability by locking a critical mass.

ccvannorman 9y ago

The dominance of monopoly players will not be challenged * until * it's normal for majority of consumers to have an AI / middleware that can choose the best option without the consumer needing to know it's a monopoly player or not (brand) Example: I want to create an event with my friends at a local pub. In 2017, I create a facebook event and invite my friends. I use Google maps or Yelp to find an appropriate pub. In 2040, I tell my Mantle / AI by voice, "make an event for me and friends at local pub, moderate price, close to downtown." Without me ever knowing what services are used, I'm told to meet my friends at some location, and they are told as well. I never have to interface with Facebook, Google, Yelp, or anything but my Mantle. I cannot wait for this, as I am completely sick of Facebook and Google fucking up basic functionality and eating competitors. I also don't want to do the work of constantly knowing what is the best competitor to use for simple services.

oblio 9y ago
Who's going to produce your AI and why won't they be biased? ;)

kensai 9y ago

Question for all: would it work for a social network startup go the opposite way? copy the best of Facebook functionality, without the bloat, the overhead, and the ads? (but then how would they make money... hmm)

partycoder 9y ago

While there were communities with large and working social graphs like ICQ, AIM, Myspace, etc., Facebook had a more committed approach emphasizing real identities rather than pseudonyms. Being first to market with an accurate social graph consisting of real-life identities is what gave Facebook its advantage.

kornakiewicz 9y ago
And that's biggest disadvantage for most young people. Also, Linkedin was earlier, but real-life identities was first, because of understandable purposes.

rbur0425 9y ago

i swear these media outlets read hacker news/medium/any other popular blog site and just regurgitate information

adventured 9y ago

I keep wondering if Snapchat is going to end up being Facebook's Microsoft-Netscape situation. If Snapchat goes down (almost guaranteed at this point), it's going to be universally blamed on Facebook. That blame - along with the likely howls from Snapchat and its backers - will intensify anti-trust attention. The bundling premise that got anti-trust attention with Microsoft's Windows monopoly, will draw the exact same attention to Facebook leveraging its network to smash competitors while it has a monopoly or near-monopoly in social (Instagram is dramatically reinforced by Facebook).

coleifer 9y ago

We're talking about FB's decision to add mustaches to your face while posing for a selfie. It's couched as a debate about business ethics / innovation, but remember: we're talking about dog ears and mustaches.

thr0waway1239 9y ago

If you feel, like I do, that if WhatsApp were not acquired by Facebook a) their growth rate would not have been much smaller b) they would probably have just as much or greater user engagement than what FB has today then the actual question should be: "What is actually going on which allows such acquisitions to bypass the antitrust laws?"

tim333 9y ago
I was thinking it could be a good thing to use antitrust laws to prevent Facebook dominating by buying its competitors. I mean winning by having the best product is fair play but not by buying anyone who may be a threat. I'm not up on antitrust law - I'm guessing they don't apply to social networks currently?
thesagan 9y ago
Regarding Google and Facebook, I'm hearing antitrust muttered in the office where I work, lately. (A digital publisher) I'm ready for some more noise on this issue, publicly.

malikNF 9y ago

I finally used snap chat a few months ago, and the experience was just annoying. Don't get me wrong, the whole take a snap of your face, make your voice sound funny is really fun and all, but the UI was just annoying, there were emoticons appearing next to my friends names, I had to google it to find out what it meant. There was some number next to my name, next to my friends names, god knows why its there, i'm assuming something to do with how many snaps you send. The navigation.. just really unintuitive. So as a user it makes me not want to explore the app, hye i got a snap from a friend, okay watch send a "haha nice" message and forget about the app. While it's kinna scary to watch how much power FB has, I can't help but think its snaps own damn fault for making something that does one thing, and for not taking any measures to make it do more, to get me to stay with the app, to get me to use it more.

malikNF 9y ago