Facebook Foodfight

Posted on November 29, 2007
Filed Under Uncategorized |

“I’m seated in a good spot, between Jeff Nolan and David Spark. Spitting distance opposite me is Dave McClure, another favorite of mine. Unfortunately our end of the table is not very well behaved, in fact, most of the table fights for some of the conversation versus our esteemed panel, some of whom are paying for our dinner [which made for a fun evening].” [From MSFT: Setting Up Facebook For Failure?]

I went to a dinner on Tuesday night hosted by The Conversation Group, social networks were the topic of the evening. Tom’s description of most of the table fighting throughout the dinner is an understatement, but it was also good natured fighting (I would hope).

There are some real disagreements among people about the nature and impacts of social networks, social graphs vs. social networks, user thresholds for privacy, the impact of advertising and monetization, and how many of these things the market can support.

I thoroughly enjoyed the evening and look forward to this discussion heating up in the months ahead in various venues. I will say now that I have two concerns, the first being saturation and the second monetization.

Right now it feels like people are racing to try new networks but ultimately not doing anything substantive on them. Even Facebook feels like it’s fallen into a rut (and it only took the summer to get here) where everything is more of the same and I’m still not fundamentally altering the way I interact with other services and systems as a consequence of using Facebook.

Gartner calls this the Trough of Disillusionment, step 3 of the modern hype cycle.

3. “Trough of Disillusionment” Technologies enter the “trough of disillusionment” because they fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the technology.

I don’t know if we are yet in the trough of disillusionment but we are certainly in step 2, the Peak of Inflated Expectation.

Secondly, why is it that everyone summarily dismisses subscriptions as a monetization model? The problem with advertising driven monetization, in my opinion, is that we are getting to the point that companies are hoping to get a slice of a slice of a slice. The advertising market is not expanding enough to accommodate the full spectrum of mechanisms for delivering advertising, so something is going to have to give.

While on the topic of advertising, in hearing the various pitches I am struck by how little focus on ROI there is as a means of justifying the cost, or more importantly, providing an apples-to-apples comparison by which advertisers can prioritize their spend based on platform efficacy and head-to-head cost comparisons.

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