Memo to OpenSocial: It's about distribution, stupid!

by Jesse Farmer on Thursday, April 3, 2008

With the launch of Google's OpenSocial project last week and the subsequent announcement that MySpace will be one of the participating social networks the developer community on Facebook and the technology blogosphere is wondering what this means for Facebook's platform strategy. The short answer: not much. Why? Because it's not about users per se, it's about distribution.

Note: This was cross-posted to the Adonomics blog.

The Hype Machine

Talking heads love narratives. After MySpace announced their partnership the narrative became "the young and arrogant Facebook was shown up by the experienced and prudent Google, who in one fell swoop obsoleted their whole platform strategy." Michael Arrington asked if this were "checkmate" for Google. Others have been asking whether or not Facebook should just give up and join OpenSocial itself.

Hitwise even published a graph showing the total size of all the OpenSocial partners vs. Facebook. Yikes! That sure looks bad for Facebook.

But like most media narratives the story turns out to be more subtle.

The Value of the Facebook Platform

These subtleties first appear when you consider the value application developers get from Facebook. Nothing in this world is free, including developing applications for Facebook platform. In exchange for agreeing to dress your application in the Facebook blues they are offering you, the developer, two things:

  1. Lower cost of acquisition per user
  2. An unparalleled distribution mechanism

The cost of acquiring a user on Facebook is orders of magnitude cheaper on Facebook than on the web at large. Facebook effectively offers a single sign-on solution with their API, on top of which it only takes one click for a user to add an application to their profile.

OpenSocial clears this hurdle, too. If I'm in MySpace an OpenSocial widget will use MySpace's login system to verify whatever it needs to verify. Ok, so I can install OpenSocial widgets in one click. Once a user has decided they want to add my widget the barrier to entry is minimal.

Distribution, however, deals with the step before this. How do I get users information about my application to begin with?

It's About Distribution, Stupid!

Last September something remarkable happened: Facebook launched the newsfeed and mini-feed. Although most people didn't realize it at the time this effectively "activated" the social network underlying Facebook, making it possible for information to flow efficiently through the connections in that network. Information that I used to have to seek out now came to me without any effort on my part!

This made it possible for Facebook to become a distribution engine. Through the newsfeed Facebook could, in theory, distribute anything: advertisements, my friends' activity, and even software.

Heck, Facebook could partner with local governments to send out public health announcements to local Facebook users. This is powerful stuff and it's what drove the Facebook-made photos and events applications to be larger than Flickr and Evite, respectively.

So when Facebook opened up the platform plenty of people knew it would be possible for them to achieve the same kind of success. iLike saw three million users add their application in the first two weeks. Even now, three and a half months later, it's possible to get a million users in less than a month.

You might not hear stories like iLike's any more but that doesn't mean the Facebook platform isn't growing. The number of application installs across all of Facebook has been remarkably consistent since the launch of the platform growing at a rate of about 1.5% or 2.96 million installs per day.


That's right. Every day almost 3 million people click that big blue "Install" button and don't remove the application. And this growth shows absolutely no sign of slowing.

OpenSocial vs. Facebook

To quote Dave McClure, "open is not better, better is better!"

Ignoring questions of the quality of the users, OpenSocial's incorporation of MySpace appears to give them the edge. MySpace, after all, has 200 million users and Facebook has 50 million. But the size of the potential userbase doesn't matter nearly as much as the ability for an application developer to activate that userbase.

Peter Chane, the Group Product Manager at Google for OpenSocial, has stated that OpenSocial will have some components of Facebook's distribution system (newsfeed/mini-feed) but not others (notifications/requests).

Whether the OpenSocial model can surpass Facebook-level distribution is the key question. It's not about how many users are using the social networks on OpenSocial — it's not even clear that there's going to be any real interaction between users on different networks, anyhow. It's not about whether OpenSocial is more or less "open" than Facebook. It's about whether developers can build high-quality applications (not just widgets) using the OpenSocial technology and distribute them efficiently through the social graph.

There are all sorts of unknowns even though OpenSocial is a week old. How does OpenSocial’s feed-based system compare to Facebook’s newsfeed? How does the quality of the social graph wired up with OpenSocial compare to Facebook’s? What impact do these factors have on the efficiency of distribution?

In Closing...

The point is this: don't be blinded by the big numbers of MySpace. Until OpenSocial shows it can activate those users in a way that is more viral than Facebook it's an unproven technology, even ignoring the fact that as of this post OpenSocial doesn't provide any meaningful way to interact between containers. If you're on MySpace you're not going to be able to switch to another social network and take your MySpace data with you.

That it's been a week since Google launched OpenSocial and the only story about iLike is not that they're on track to get another windfall of users via OpenSocial, but that their Ning application has been hacked makes be believe Facebook's king can more than meet the threat from Google's attack.