Max Gladwell

Taking a big-picture (read: galactic) view of the current social networking wars, we find apt analogies in the Skywalker saga.

We recently wrote about the developments in DataPortability i.e. the ability to free your personal data and profile information from social networks like MySpace and Facebook in order to utilize them throughout the Web. Google announced FriendConnect, which turns the entire Web into a social network. Any website can turn on social networking with the flick of a switch. When visiting that site, you can instantly bring all of your data and friends with you. It’s like going into an empty bar or mall and having your friends instantly show up. We also wrote about the recent buildup in criticism aimed at Facebook and mused that they should become a big nonprofit entity with a purely noble mission.

Since then, Facebook announced that it would not participate in Google FriendConnect for what amounts to a convenient half-truth of “privacy issues”. Here is Umair Haque’s take on it:

It’s stark evidence that evil is both real in a strategic sense, and it’s a stark demonstration why evil is such a useful concept from an economic perspective. It allowed us to predict, for example, Facebook’s behaviour pretty nicely.

Now, there’s a big problem with Facebook’s move. The endgame of competitive dynamics in this space is straightforward: the least evil, most open platform – by necessity – wins. Walled gardens lose – hard, fast, and decisively. That’s a simple, inevitable outcome of network economics – and no amount of artificial competition, a la blocking tactics, can change it.

That’s why Google’s built an open platform on open standards: because it can explode the value of network effects in this space. From a strategic point of view, Facebook’s already lost this war (hard) – it’s just a matter of time until the dynamics inevitably play out.

And here is Michael Arrington’s:

I think Facebook’s intentions aren’t to let users get data out of the network until Facebook is absolutely forced to do so, and then only on Facebook’s terms (see Facebook Connect). The fact is, this isn’t Facebook’s data. It’s my data. And if I give Google permission to do stuff with it, I’m damned well within my rights to do so. By blocking Google, Facebook has blocked ME. And that, frankly, kind of frustrates me.

It’s a simple power play. Facebook is afraid of Google. What’s more, Microsoft is probably pulling Facebook’s strings, if only by the fact that Microsoft is the company’s best (only) exit opportunity. Thing is, if Facebook’s business model and corporate values were strong, it would have nothing to fear from Google or anyone else. But they’re not. So it resorts to protective measures (in the spirit of Microsoft) in an environment that is increasingly becoming more open.

Why is this relevant to Max Gladwell? This battle amounts to a clash of good vs. evil (open vs. closed, free vs. constrained). There are issues of corporate social responsibility, privacy, ownership, and the greater good. This is about the direction of social networking for the forseeable future, who will (or will not) control the landscape, and how much of that power will be vested in the people. Like an archetypal myth, this shares many of the same themes and characteristics. In many ways, it’s like the Star Wars epic.

Any time that power is the primary currency and commodity, the distribution of that power tends toward a two-party system. Democrats vs. Republicans, The United States vs. The Soviet Union, The Hell’s Angels vs. The Mongols, Greeks vs. Trojans, and The Dark Side vs. The Republic. You rarely find a significant third party when all is said and done. That’s the direction things are headed in the tech world, though the sides aren’t one single company but rather groups of friends and frenemies on either side. Some of these companies have consciously chosen sides while others don’t have much choice in the matter. Unfortunately, Facebook is among the latter.

As with Anakin Skywalker, who was lured to The Dark Side and became Darth Vadar, Facebook has a similar fate that is tied to many of the same circumstances. It was discovered and celebrated at an early age as a exceptional and powerful platform; it enabled us to stay in touch with all of our friends, past and present, while even making new ones. It gave developers a platform for building applications that added value for members and generated revenue for developers themselves. It progressed rapidly through the Web’s ranks. Indeed, the force was strong with this one. But there was a hubristic tendency. And hubris, by definition, always leads to downfall.

Alas, Facebook is on a tragic and fated path. The model is not strong enough to survive on its own, and no will pay as much as Microsoft will for the company. It’s a foregone conclusion, then, that Facebook will be lured to the Dark Side…and we all know how that ends.

Haque: That’s fundamentally why evil is so important: it lets us begin to think anew – at last – about strategy itself. Google slowly but surely is pinning Facebook like a butterfly and eviscerating it for the world to see – while Facebook clings desperately to yesterday – is an object lesson in the power of good vs evil.

Facebook’s most productive use today isn’t as a social network, but perhaps more as a case study for the rest of us: of how not to think strategically – how to, in fact, think less strategically than megacorporations – about strategy in an interconnected world.

Still, why not end on an optimistic note. There’s always Yahoo!. We clearly thought that it had to end up joining the Dark Side and may still go that way. But the company’s recent cooperation with Google and its new social media platform give cause for hope. Hope that Facebook might find a way to work with or become acquired by Yahoo! to stave off Redmond and even balance the power of Google. If it comes down to dollars and cents, that’s not the way it will go. If it comes down choosing good over evil, though, the outcome could be much different. And that would be better for all of us.

As for the Star Wars analogy, there could also be “A New Hope”. In this case, the savior of the universe would come not in the form of a Jedi but rather a Twitter.

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