15 November 2007 - 20:25The Facebook platform and Open Social

Most of the social network operators depend on creating network externalities, the relationships between people using the same social network make leaving a social network more costly.
It is interesting to see the effects of Open Social, essentially a cross-corporation platform for hosting social-network widgets on Facebook. I am not arguing whether Open Social is better than the Facebook platform, I don’t know much about any of them. But think about a widget with some social capabilities deployed both on Facebook platform as well as on a social networking implementing Open Social (such as Ning) (such a widget will obviously be exposed thru 2 different APIs: Facebook’s platform API and Open Social). This widget would establish cross-corporations connections and would create cross-corporation network externalities. This widget would effectively lower the cost of leaving Facebook: all the connections handled by this widget will work if you leave Facebook and join a different social network. Facebook will fade into the background as well as this widget is concerned. If more and more social functionality got created in widgets the network externalities would become cross-corporations to the point where the hosting platform (Ning, Facebook, Orkut) becomes irrelevant. A social network hosting these widgets will probably become more atuned to its members to the point where a member will probably navigate between multiple social networks, each connected by the widgets. The social networks which are not well defined (MySpace, etc…) will probably grows less than social networks that define their users.

It is interesting to see how will Facebook react to Open Social. Putting a widget both on an Open Social site and on Facebook is not extremely hard, you decouple the interaction between the widget and the host system from the services of the widget and you code 2 interactions: one for Open Social and Facebook (the fact that you have to code to only 2 different APIs which are quite simple helps a lot). Also, from what I understand you are basically coding to a container API, which probably doesn’t require a very complex interaction. Due to the low cost of creating cross-corporation widgets via Open Social Facebook doesn’t have a big room to maneuver, it cannot take the widgets developers hostage as Microsoft and various telcos have done it (the high cost of developing to a particular platform prevented developers from creating applications that would work both on Windows as well as on Linux). Sooner or later Facebook will have to face the facts and drop its platform altogether because it will become just a redundancy.
One smart thing that Open Social has done is to create an API which is very simple. When they created a API competing with Facebooks they have created opportunity costs for coding to Facebook. The fact that this competing API comes with a low cost of development means that coding to Facebook carries a low opportunity cost which means further that these APIs are not competing for developemnt resources (coders, managers, etc…), a very important thing if you want to gain mind and market share.

Later edit: I think I rushed ahead when saying that Facebook will have to drop its platform. Currently there is not much difference between the Facebook platform and Open Social, both basically let you deploy your application within a social network. Currently both of them are basically containers. But this could change in the future. One potential important difference is how these containers will give an application access to members using the social network on which it is deployed (users, advertisers, etc…). Access to members within a social network could be what would split the organizations backing Open Social (hi5, Orkut, Ning, etc…) because a social network is all about access and different social networks would need different access between members. Anyway, I will end this here.

Later edit 2: It looks like there is an explosion of social network platforms. It is interesting to see how this will unfold: as far as I know the costs of coding to a particular social network API are pretty low if the application is well designed (you are simply coding to a container API with whom your application has a pretty simple interaction) so it is conceivable that developers for social network applications will be able to code to multiple social networks at the same time. Or who knows, maybe developing widgets for social networks will go the way of developing mobile applications: a highly fragmented environment where the costs of coding to a mobile device/operator combinations are so high that the developer is taken hostage by that mobile device/operator. Open Social tried to provide an API to make developing to the whole social networking industry easy (an initiative which bears many similarities with Google’s Android BTW), but they may fail.