14 ms·

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 advan

• Alex3917 10y 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 10y 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 10y 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 10y ago
    (Anecdotally) That is correct, they are avoiding Facebook at all costs because it is for "old people"
    • dagw 10y ago
      My daughter, who's 7, has asked me if she can have snapchat. I've never mentioned it to her or even used snapchat, so she must have picked it up at school. I don't even know if she knows what Facebook is.
      • reducesuffering 10y ago
        Likely. My nieces (ages 5 and 8) LOVE the filters on Snapchat. We call them "funny faces". Snapchat really captivates young people.
      • chrischen 10y ago
        Yep, I said what I said in the OP because my sister (11) asked me if I had snapchat (to which I replied no, but then grudgingly signed up). Had she not been using it I would have written it off as confusing UI and "what's the point."
    • dp88sdf8 10y ago
      Also anecdotal, but this past Thanksgiving I got into a chat with two nieces and a couple of their friends, all in the late-teen range. They're really concerned about the amount of information these big data stores have on them. They're worried even more that there is a government snoop checking in on them or another unknown. Personally, I have gotten more and more leery of putting data online. I deleted my Facebook 7 years ago. Twitter is strictly read-only for me. I share kid pics directly with family via private storage I control. Really needs to be a peer-2-peer suite of "social" tools that cut out middlemen as much as possible.
    • glibgil 10y ago
      Young people avoid the timeline because it is for old people and mostly public. Facebook knows how young people use Facebook. It is in ways you don't see. It's Messenger and private groups
• Spooky23 10y ago
  The thing about Microsoft is that even in death they still rule the roost. 95% of the office workers in the developed world are still sitting in front of a Windows PC, logging into an AD, doing stuff with Office, etc. Every significant business has an EA or Select Agreement.
  • alexandersingh 10y ago
    Microsoft is far from dead, and under Satya they've actually found their feet again :)
    • quadrangle 10y ago
      Why are you smiling about that?
      • alexandersingh 10y ago
        I'm just a happy person ¯\_(ツ)_/¯
      • deleted 10y ago
        [deleted]
  • manigandham 10y ago
    In death? The company is a major presence with billions of users across the world. They are not dying.
• gman83 10y ago
  Almost makes you wonder if there isn't a very strong anti-trust case here.
  • ghaff 10y ago
    On what grounds? Simply being a monopoly isn't grounds for anti-trust action. It requires some sort of anti-competitive behavior. Now, one could posit an argument to the effect that monopolies in areas that are highly subject to network effects are inherently anti-competitive. But AFAIK that would be a rather novel argument and it's hard to say what the remedy would even be.
    • gman83 10y ago
      It seems to me they are leveraging their monopoly position in one area to dominate competitors in other areas. IANAL, but isn't that the very reason antitrust exists?
      • ghaff 10y ago
        Anti-trust is tricky and depends on defining the markets, defining what constitutes a monopoly, the barriers to entry, etc. Is Facebook in a different market from Snapchat or are they all part of a general "social media" space?
        • gman83 10y ago
          "news feed social media" vs "pictures social media" vs "augmented reality social media" vs "virtual reality social media". Facebook should want competitors tbh. Even if Peter Thiel manages to convince Trump to tell the Justice Dept. to back off, I doubt the European Commission will agree.
• ruleabidinguser 10y ago
  As with all things, this advantage will wither. I heard Milton Friedman once say something along the lines "There has never once been a natural [not the result of government action] monopoly that stayed a monopoly for very long." People just need patience and faith in the free market.
  • maverick_iceman 10y ago
    Also, I don't see why a monopoly is inherently bad. If consumers actually benefit from it then what's the rationale in breaking it up? Moreover, sectors like social networking naturally favor monopolies; it's no good if your friends are scattered around 10 different sites. The current understanding of US antitrust laws is similar. The Justice Department pursues antitrust actions only if the end consumer is being hurt.
    • xapata 10y ago
      Monopolies maximize profit by setting a price greater than the market clearing price, causing a lot of unmet demand.
      • wbl 10y ago
        Except that price must be below what competitors will offer.
        • chasing 10y ago
          No. This is the problem with monopolies. They use other advantages to win markets without competing on price, features, or innovation. It's harmful to consumers.
        • xapata 10y ago
          A monopoly by definition has no competitors.
          • wbl 10y ago
• cookiecaper 10y ago
  Yes. Tech entrepreneurs need to be very wary of platform vendors. You can and will be NetScaped. Why give away a web browser for free? Because it gives Microsoft instant dominance over the web. Platform providers work very hard to maintain their platform because it allows them to control consumer attention. Big tech companies will only acquire companies that bring something to the table that they can't get by locking 4 of their own engineers in a closet for a year. That means a brand or patents. Any software-based tech can be copied for around a million bucks without much issue. The other thing here is that in cyberspace, the effects of the network are enforced only by artificial legal barriers like the CFAA that make it a felony for users to contact web sites in a manner that the operator dislikes. The CFAA essentially takes the ToS (and sometimes even less; just an operator's expression that he no longer wants you to access the site can suffice the CFAA's standard of "exceeding authorized access") and evals it as part of the criminal code. This is the law under which Aaron Swartz was prosecuted. Facebook has invoked this power repeatedly, most notably against Power Ventures, which was destroyed in court for allowing users to export their own data only, the data in which they have an exclusive copyright interest. Power infringed Facebook's copyright because it downloaded a page into RAM (RAM copies that exist for milliseconds are eligible for copyright protection per MAI v. Peak) that contained Facebook's IP in order to extract the user's information. It's why you never see third-party exporters and have to rely on the crappy ones that Facebook/Google offer and bury so they can avoid flak. Things would look much different if our law wasn't so thoroughly committed to entrenching the extant digital players. There's no reason that another application should be legally restrained from multiplexing/multicasting one's Facebook feed. IANAL.
• jtraffic 10y ago
  Your use of the term "network effects" is a touch loose. Network effects refer to a situation where the product becomes more valuable with more users. This is not the same as simply having a large customer base. Probably the better way to say it: "Microsoft and Facebook both gained advantages because their customers had high switching costs." FB users have high switching costs in terms of opportunity costs (by leaving FB they forego value) and those opportunities costs are large mostly because of network effects. In the case of Microsoft, you say "network effects of their enterprise sales channel," when you really mean Microsoft had a large customer base to which they could quickly and easily deploy new products. The fact that one business had a sales agreement with Microsoft didn't necessarily increase the value of a sales agreement with Microsoft for a different business. (Maybe there are some network effects there, but they aren't obvious and I'm fairly sure you aren't talking about them.) I think Microsoft did (and still does) benefit from network effects in a different way, related to collaboration: the more people who can open and use an excel spreadsheet, the more valuable it is to learn and use excel.
  • exelius 10y ago
    Well, that's the thing... Microsoft wasn't selling directly to these companies. They had a network of resellers and system integrators. And basically, outside of a few niche industries, businesses basically had to use Microsoft by default. Once these system integrators were in, they would use those relationships to push new products -- because Microsoft. The more customers, the more product categories they own, and the more system integrators using Microsoft. It feels a lot like network effects to me -- but I think I was using a broader view of their non-consumer sales strategy (Ballmer was a freaking genius in this right -- just not so much as a product guy).
  • mherkender 10y ago
    I don't think anything you're saying is untrue, but I do think you're ignoring how shady and unethical Facebook is when they feel like it. For example, they downgrade YouTube videos in people's feeds. There's no reason for that if they have a better product.
  • spangry 10y ago
• brightball 10y ago
  Yea, in order to compete with FB in the social network space you basically need a service that would somehow break Facebook's entire model to copy. It's one thing to add a feature but entirely different to break your entire mode of operation.
• tomtang0514 10y ago
  You should checkout how Tencent build its empire in china from QQ. That's more like where facebook learned from.
  • jmknoll 10y ago
    Do you have any articles about this? I'd be interested in learning a bit more about the history of Tencent.
• frik 10y ago
  Facebook also has the data. They see at first glance any uptake of a new social network of any kind. They automatically prevent sending invite-links or even just invite text messages via FB posts, FB chat, WhatsApp. So if you try to reach all your friends and try to invite them, you can assume only a few will even see the post in their newsfeed, get the chat post - it's like shadow banning posts. They create a filter bubble for you.
• alkoumpa 10y ago
  The nature of Facebook makes it also far more easier to release and distribute new products. People come to your service every hour -- on the other side none (should have) wanted to visit Microsoft's homepage, which makes the enterprise agreements a necessity, that doesn't scale (by any means) as well, although MS managed to scale pretty well.
• 8ytecoder 10y ago
  This is true. I'm curious if Microsoft Teams would/could do this to Slack.