This is quick post on an issue that has been with us since telecoms companies and other major utilities first gained then maneuvered to retain their cozy oligopolies. The story so far in recent web history – almost a billion people on the planet start storing really personal data with Facebook and creating networks of friends and family. Facebook enables advertising and does very well indeed. Meanwhile what these millions of people are allowed to do with there data is determined by a Board and shareholders!
This has happened before. Company provides utility, gains very significant economies of scale, i.e reduces marginal cost of a new customer to almost zero and charges a monopoly price. Examples – oil giants, utility companies, shipping companies, Google etc..
Facebook has the added advantage of having both zero marginal cost per new user and enormous value per user based on its size of user base – the “my friends are on FB so it now makes sense” idea.
May I say that I am not in the slightest concerned longer-term – the internet does not allow such control for long. I am however disappointed that the financiers behind these companies, that flock to them once they break out beyond the original user group and are clearly a winner, still attempt to ramp up in the same way as an old-style monopolist.
Very simply put, if they made Facebook open such that the data was the users, such that they would never have to deliver a users account to the police, such that anyone on any social network could link to a user of quite a different social network then the utility of these networkds would increase by an order of magnitude. The problem is of course that the short-term gains from the playing fast and loose with masses of users are without compare – Facebook worth 50bn!
The good news is that the market is moving fast. In the next year we will see some very good blogging platforms start to collaborate more and allow much more to be done with the basic old blog – the blog to blog network I call it.