Posts Tagged: networks

Research / Thoughts — 2 Comments
16
Feb 08

Responding: Are social networks good for society?

Yesterday, I wrote about the Freakonomics blog post that asked if social network sites are good for society. I’ve had a little time to parse the responses; I don’t really have an answer to the question, but I thought I might add some observations.

The first respondent, Nicole Ellison, addresses a main issue concerning these sites and their actual affect on society. While social network sites eat up plenty of news cycles, they’re used by a relatively homogeneous 20% of our population. These numbers are nothing to scoff at, but for every one American that uses these sites, there are four that don’t. Of Facebook’s users, 25.6 million of them live in the United States; of those, approximately 14 million are college adopters, leaving about 12 million “other” American users of Facebook. It only seems like everyone is on Facebook. These networks have hardly gone society-wide yet, and Ellison rightly states that “as they continue to be adopted by more diverse populations, we will see an increase in their utility.”

Of course, the question posed by the Times is forward-looking, so perhaps we should assume that one day we’ll all be social networkers. Taking Wellman’s personal networks, or Castells’ network society literally, it’s possible that we’ll eventually outsource social and economic transactions to the network. However, I think this gives online social networks a little too much credit; what if online social networks were nothing more than the new email? I think we should temper expectations of just how much of our lives we expect to send to the network.

Further written into the Wellman/Castells assumption is a notion of permanence/persistence; that society might decide on the one great network and outsource interaction to it, creating great masses of active social capital. Even though social networks are still nascent, we certainly haven’t seen any evidence that leads us to believe we institutionally value our accumulated SNS social capital. Need proof? Look at all your friends jumping from Myspace to Facebook. If we can’t all agree on a society-wide space, and we are drawn to new social networks like moths to a flame, doesn’t this nullify the persistence hypothesis?

Perhaps the fact a network can’t go society-wide is the critical turn. Online social networks thrive in real-world networks, and real-world social networks thrive on tight, local clusters. Media, celebrities and national ideologies write a society into being; our networks enact our lived realities. If your network agrees on a social network for mediation, you’ll find yourself satisfied by the network, and it doesn’t matter if 290 million other Americans take part. The disparate clusters that make up our society can have their needs met by multiple, diverse networks. In the end, its all about how the network answers your situationally relevant needs.

If our lived experience in online social networks is going to be nomadic and temporal, than what societal value is derived? Just as college students get social utility from Facebook, perhaps other networks will rise to answer other needs – relocation, new parenthood, and so on. Social networks might just provide the relatively short-term support one seeks when information and social capital deprived. That’s not a bad thing in my book.

Any notion of a global, persistent, overarching online social network that exists in the mainstream for more than a few years, however, is fantasy. Young people already know that Facebook is passe. They use it, but they’re ready for the next thing. We naturally want to migrate; on top of that, the authoritarian nature of these spaces prevents us from embracing them as “real” and vibrant. We use the sites, the sites use us, and we move on.

Of course, our online movement mirrors society. We’re constantly negotiating and renegotiating social networks, rearranging importance based on personal or economic need. This complex dance is exactly what we see in online social networks. Therefore, it might be useful to theorize new types of social capital that reflect the spatial intersection of physical and virtual networks. Just as we’re not going to take part in one physical network for life, the ability to exploit the temporal reality of online social network may reflect new skill sets and forms of ties. This sociotechnical capital, sets of ties that bridge the physical and virtual in temporal sync, may be the new relation afforded by online social networks. Rather than forcing offline models to fit the virtual, perhaps its time to think of new models.

Further reading:
Barry Wellman’s Personal Networks
Manuel Castells’ Network Society
Benedict Anderson’s Imagined Communities
Jane Jacobs’ Death and Life of Great American Cities
Paul Resnick’s SocioTechnical Capital

Noticed / Research — No Comments
8
Aug 07

Twitter’s Hubs and Authorities

From an interesting new paper from UMBC’s eBiquity team: Why we Twitter.

Thoughts — 3 Comments
22
May 07

Activating Latent Ties

There are a number of models that enable the integration of social technology into our everyday lives. In the context of online social networks, we’ve often talked about situational relevance. Here’s the basic principle of situational relevance: When a person is entering a new social network, they have information needs. They need to know about the people around them in order to navigate the social network. An online social network that addresses these needs is situationally relevant.

While I certainly agree that people use social technologies for entertainment/time wasting, a huge part of the calculation is also utility. Why did Facebook have such extensive success with college populations? Because it answered relevant social needs. Why do we choose Google over other search engines? Because it is best at answering our information needs. Ultimately, our relationship with information tools is structured around “what does it do for me.” The tools that best and most frequently answer our questions are often the most popular.

Today I’d like to discuss another model, one that certainly isn’t new but is well worth discussing. In a post yesterday, I talked about the power of latent social ties. Latent social ties are pre-existing social ties that we’ve deactivated or left behind. As we move through the various social networks of our lives, we develop friendships and ties that we ultimately have to backshelf as we move forward. These are our school friends, ex-coworkers, friends from previous neighborhoods, that sort of thing. No rocket science here.

Many of us would like to have a low-involvement context to get back in touch with these individuals. And there’s a plethora of reasons – potential business contacts and networking, catching up, reuniting, etc. Right now, we do this through email, though email is a particularly bad medium for these connections. Yes, it might be fun to write a long-lost bud a huge email filling him in on the details of your life to date, but you’re not going to do this every day. Rather, you’re going to want to keep them in an address book of sorts…one where you can pop in and check out what is new with your old friend’s life.

As one might imagine, online social networks are particularly well suited for this task. The low-involvement, low-effort model of friend maintenance is pretty much what the environment is built for. It’s also a useful way to keep people engaged when they arent exploring new, situationally relevant new networks. If you’ve been at your job or college for a few years, the value of situational relevance declines somewhat, so what can a social network do to keep you engaged? They can certainly get you activating latent ties.

Of course, activating latent ties is somewhat tricky. My undergrad classmates largely aren’t on FB, and that reality is even moreso for those who graduated in the 90′s, 80′s and so on. So how can you create an environment to activate these latent ties? As a list:

  • The environment must be “accessible” (or comfortable, or usable, or whatever you want to call it). Facebook is particularly well suited for this role, with their emphasis on clean design and usability. Further, it must be easy for users to get on the systems and find their old ties.
  • Contexts must be respected. One of the main reasons that we feel uncomfortable about the mixing of social networks is the fact we’re different things to different people. While Facebook doesn’t really foster faceted identity, we can keep our social networks separate, which is a very important facet. It is up to us to provide a palatable identity, but if we can keep our social networks separate, that’s almost as valuable.
  • The activation of ties must be fostered. It isn’t an accident that people go to Classmates.com to connect with ex-classmates. The site is set up with the premise of rediscovering old ties. While I think Classmates.com is hopelessly broken, the point is valuable – the activation of latent ties doesn’t happen by accident. It happens because people enter the social network with the intention of doing so, and they have the tools for doing so. Therefore, social networks must put effort into this approach – they have to foster the activation of latent ties.

While the answering of situationally relevant social information needs provide motivation for using online social networks, if that is all the user does, they will run into the “what’s next” problem. The activation of latent ties may stem this problem; and when you think about all of the potential latent ties we’ve left behind, you see the potential scope of the market.

Just like situational relevance, the activation of latent ties is something that must be done correctly. It is a unique information transaction and must be treated as such. The online social network that best understands the complications involved in this transaction, and designs appropriately towards these complexities will reap huge rewards from the latent ties market. Of course, I write this with Facebook in mind, as they are the network best situated to benefit from this opportunity. If my Facebook can become the low maintenance, low involvement directory of our lives, it is going to stand alone as a useful information tool. And usefulness, folks, is what its all about.

Software / Thoughts — 2 Comments
10
May 07

Structural holes in del.icio.us, or, the value of editorship

Last year, Joshua Schachter raised some eyebrows when he announced that del.icio.us would be adding enhanced social features. This announcement generated some pushback, and I haven’t noticed much work towards integrating meaningful social tools in the meantime. Ultimately, this is dissapointing, because the integration of better social tools in delicious is a good idea, and without these tools, del.icio.us is comprimising its value significantly.

When we first started bookmarking links in del.icio.us, the notion of transportable, social, rss-able bookmarks was a great concept. It remains a great concept, and del.icio.us’ growth is evidence of the strategy’s value. Del.icio.us’ UI also appealed to many – it was fast, stripped down and eminently usable. Schachter had elected to design with an eye towards utility, not Web 2.0 fluff. This design reduced complexity and barriers to entry; combined with its core value, del.icio.us had all the right stuff to really take off.

And take off it did. The acquisition of del.icio.us by Yahoo (along with the acquisition of Flickr) proved to be one of the best marketing moves Yahoo has made in the past few years. In the wake of the acquisition, more people joined, the networks grew stronger, and the value of the bookmarks stored in del.icio.us grew exponentially.

Social bookmarking is a cool idea. If you follow del.icio.us/popular, you can see bookmarks that lots of people like. In doing so, you can spend lots of time reading top ten lists ad nauseam. This is the crowdsourcing model, the Digg model, whatever you want to call it. It flies in the face of editorship and control, and is one of the key concepts of Web 2.0. Unfortunately, del.icio.us has overinvested in the crowdsourcing concept. In fact, I’d argue that the key value of del.icio.us is editorship, a value that seems to fly in the face of Web 2.0.

What is del.icio.us other than an editorial tool? Each person that uses del.icio.us is slicing up the web it their own special way. And as millions of people have flocked to del.icio.us, its userbase has grown to include academics, experts, notables and laymen alike. And the slices of the web created by these people are all potentially valuable to someone else.

If you look at my network, you’ll see a list of people who I follow, as well as a list of people who follow me. I follow a small collection of friends, academics and industry experts. You’ll notice that I only follow about 15 people (on average) – the reason I do so is because that’s about all the people I can meaningfully follow in the current state of del.icio.us networks. In my opinion, there’s a lot of work del.icio.us could endeavor to make the editorial aspects of the service (the true long-tail value) more usable. Here’s a start:

  • Make people findable. Currently, del.icio.us offers you a single field that you can use to tell others who you are. You can basically offer a link to your blog or website, that’s it. This is terribly inefficient. Give people fields to describe their interests, occupation, areas of expertise. Make it searchable! If I want to find people who bookmark in the social networking field, let me search for people who describe themselves thusly. I’ll look over their bookmarks and decide if I want to follow them. Don’t make me use Google to find danah boyd’s bookmarks!
  • Enable people browsing. I want to know who is bookmarking or tagging stuff in a way similar to my own. If delicious would compute some rudimentary similarity metrics, I’d be able to find other people that share my interests. I want to know who these people are! I want to follow their bookmarks because doing so makes my life easier. Give me the tools so I can better find people who are like me, or who are popular for a certain topic area, or who are widely followed. People follow danah or Howard Rheingold or Fred Wilson for a reason – so make it easier for people to find these luminaries.
  • Improve the social UI. As I previously mentioned, I can only follow the bookmarks of around 15 people. Any more than that and I can’t keep track of what’s what. I wrote in to Yahoo some months back suggeesting that they set a cookie that would tell me what links are new when I refresh the network page – that’s a start. The social interface needs work – I should be able to follow groups of people, specific tags individuals use, and so on. The UI is a key limitation to the entire social strategy.

As it stands, the fact that del.icio.us overlooks the value of the individual is a key structural hole in the service. Del.icio.us is populated by many brilliant minds, but they are simply too hard to find! Its almost as if everyone on del.icio.us is blogging anonymously. It might have made sense a few years ago, but it doesn’t anymore. Del.icio.us can improve the social aspects of the service without becoming another social network; the idea that adding social to del.icio.us is somehow a negative is completely bunk. Social can be added well, and it will make del.icio.us even more popular. It’s time for del.icio.us to realize the value of editorship.

Noticed — 1 Comment
18
Aug 06

Metcalfe Responds and Defends His Law

Last month, I wrote a post entitled “The Network Effect Multiplier, or, Metcalfe’s Flaw“. That post cited a preprint of a IEEE Spectrum article by Briscoe, Odlyzoyko and Tilly that pointed out a key problem with Metcalfe’s law – that the value of a network does not grow proportionally, but rather logarithmically. This paper generated substantial buzz, as a lot of the logic of Metcalfe’s law underlies how we value web applications, particularly socially-enabled web applications.

Metcalfe, in a guest post to colleague Mike Hirshland’s blog, responds to the article. Its a very interesting read, and another wonderful example of how blogs enable conversation. Metcalfe first clarifies his purpose in creating his law.

As I wrote a decade ago, Metcalfe’s Law is a vision thing. It is applicable mostly to smaller networks approaching “critical mass.” And it is undone numerically by the difficulty in quantifying concepts like “connected” and “value.”

This is valuable, as it questions the applicability of Metcalfe to large networks. However, as Metcalfe originally used this law to describe the telecommunication network, I’m confused by his definition of smaller. Nevertheless, he’s absolutely correct about the difficulty in quantifying value – I wrestled with this exact concept when I was analyzing the law. Metcalfe goes on to state:

While they’re at it, my law’s critics should look at whether the value of a network actually starts going down after some size. Who hasn’t received way too much email or way too many hits from a Google search? There may be diseconomies of network scale that eventually drive values down with increasing size. So, if V=A*N^2, it could be that A (for “affinity,” value per connection) is also a function of N and heads down after some network size, overwhelming N^2. Somebody should look at that and take another crack at my poor old law.


Affinity, or value per connection is exactly what I was addressing in my analysis. Metcalfe’s original model was built on the assumption that value was binary – people using a telecommunications network, or an ethernet network, can only experience two states of value – full or none. However, in a social network, value is nuanced and conditional. Of course, in A*N^2, the assumption is A is constant through the network, which is not the case. Nevertheless, I’m enlightened to see this, and I feel that it validates my previous work.

Metcalfe goes on to explain how this notion of affinity can be applied to social networks – and the long tail in general.

Social networks form around what might be called affinities. For each affinity, there is a critical mass size given by N=C/A, as above. If the number of people sharing an affinity is above this critical mass, then their social network may form, otherwise not. As Internet access gets cheaper and the tools for exploiting affinities get better, many more social networks will become viable.
…

Let me leave as an exercise for the reader to develop the formulas for how Amazon’s Long Tail grows to the right as the combination of Moore’s and Metcalfe’s Laws biennially halves the critical-mass size of book audiences. Book buying generally shrinks with time, but I’m guessing that Amazon’s per book critical masses, its N=C/As, have been shrinking faster.

Similar formulas could quantify how Moore’s and Metcalfe’s Laws have also driven down the critical mass sizes (N=C/A) of Internet-enabled social networks and extended their Long Tail to the right. Looking more closely, I see that Metcalfe’s Law recurses. Just being on the Internet has some increasing value that may be described by my law. But then there’s the value of being in a particular social network through the Internet. It’s V~N^2 all over again. Down a level, N is now the number of people in a particular social network, which has its own C, A, V, and critical mass N.

Of course the cost (C*N) of getting connected in a social network has been going down thanks to the proliferation of the Internet and its decreasing price. The value (A*N^2) of particular social networks has been growing with broadband and mobile Internet access. Emerging software tools expedite the viral growth and ease of communication among network members, also boosting the value of underlying connectivity.

This is quite interesting. Down the long tail, we see critical masses of decreasingly small sizes, and these critical masses have been enabled by the simplicity of connecting.

VCMike has this very interesting post, and Om Malik is also following the conversation. Good brain food for a Friday morning.

Thoughts — 5 Comments
27
Jul 06

The Scale-Free, Underground Blogosphere

I’ve been tracking the comments on a post Steve Reubel made today entitled “The Underground Blogosphere“. In it, Reubel describes the daily avalanche of email “pitches” he receives from bloggers sending him links. On cue, a number of bloggers complained, assuming Reubel addressed them directly. In fact, Reubel’s post isn’t an attack or sinister in any way – he is simply publicly coping with his status in the blogosphere. I think we may be able to learn a few things from Steve’s post about identity and the nature of the blogosphere.

First, a little background. Reubel’s blog is currently ranked 59 in the Technorati index. To put this in perspective, David Sifry’s last estimate of Technorati’s index size is 37.3 million blogs. Indeed, Reubel and his blog are in very rare air – he literally sits atop Mount Everest in the blogosphere. In achieving this very respectable and noteworthy goal, Reubel has also achieved an interesting place in the network of the blogosphere.

As Barabasi and Watts have shown, large networks, such as the blogosphere, tend to display hub and spoke characteristics. That is, large amounts of traffic tend to flow through central hubs, whereas lesser traffic flows through the spokes in the network. Indeed, this is just like our nation’s air transportation network – places like the Hartsfield, O’Hare, LAX and the NYC airports are the hubs; those hubs begat smaller hubs like Pittsburgh and Dallas, and so on down until we get to the regional airport near your home that doesn’t even have instrument approach. For any number of reasons, networks cluster and distribute traffic unevenly. The patterns that emerge look like a power law, though Barabasi has shown that these networks have scale-free tendencies (see Shirky for a more robust explanation).

The reason I mention these enormously complex, fancy models is to simply prove to you something you already know – that bloggers like Reubel are the “hubs” in the network of the blogosphere. As a result, traffic naturally flows to Reubel – and to all of the other “top” bloggers in the network. Right now, as an example, my referencing of Reubel’s post is reinforcing his position in the network.

So here is my first contention with his claim – that the size of the “underground blogosphere” is very large. As the blogosphere is scale-free, the types of traffic that hubs see doesn’t scale linearly (or log linearly) through the network. If Reubel receives 100 pitches in a day, it is not a safe assumption that the 1000th Technorati blog receives 98 pitches a day, and the 10,000th receives 90 (and so on, reflecting a power law based on 37MM blogs). In fact, due to Reubel’s position in the network, the amount of pitch traffic he sees may be vastly disproportionate to the rest of the blogosphere.

Many of the links in a scale-free network point to the hubs. Indeed, many of the links going from hubs point to other hubs (there are 90 JFK-LAX flights a day, and only 10 JFK-RDU flights a day, as an example). We see this in the blogosphere when A-list bloggers only link to each other, and so on – a rich-get-richer effect. While Reubel’s cohort likely includes bloggers from all parts of the blogosphere, his sample is disproportionately skewed towards A-listers who share his experience. This cohort also sees a large “underground blogosphere.” What’s more, since the traffic in the underground network is largely unidirectional (non-reciprocated and flowing from low to high-ranking blog), this network isn’t reinforced (imagine if all the planes flew from RDU to JFK, and only one returned).

However, even if Reubel’s claims are off, there’s a larger issue here – how bloggers connect. In a blogosphere of 37M blogs, we’ve only got time to evaluate an absolutely miniscule part of the blogosphere. Indeed, the long-tail of bloggers has its audience, but the problem is discovery. The blogosphere dually rewards links brokered through A-list blogs; first, they have passed the editorial screening of the blogger (Reubel in this case), and second, they open up a blog to a new audience who may share common interests. Therefore, it is natural that people would attempt to persuade Reubel of their post’s worth; they aren’t really trying to gain Reubel as a fan as much as they are attempting to get .01% of his fanbase to discover them – a traditional long-tail approach.

If emailing a blogger is ultimately about gatekeeping a small number of fans to your site, what does this tell us about blogging, or peer-production in general? My Facebook research continually makes me think about why we do anything online. Why do we invest the time to create things like blogs, social network profiles, webpages? It is clearly so we can be heard, that we can have the affirmation of audience. Why do you blog? Do you blog because you want to improve your writing, be known to the technoscenti, get a better job, promote a political cause? We all blog for reasons, and those reasons are always personal. However, there’s nothing wrong with that; the folks who tried to explain away why they emailed Reubel (in the comment thread) amused me. We want audience; we want power-brokers to give us approval. And there’s absolutely nothing wrong with that, because that’s how the real world works.

I’ve given Reubel’s post a very even read. While I disagree with his size estimate, I do think he is onto something. A marketer can never stop being a sociologist – as such, they are keen to observing interesting phenomena. 100 emails pitching links a day? That’s an interesting phenomena, but why do we need a conversation about it?

In the thread, a number of commentors reported how they found these “notes from the underground” to be useful. I’m certainty one of these people. I get a few emails a week from people reading my blog; some are marketers pitching products, some are other bloggers going off-the-record, and others are people who just didn’t feel 100% comfortable leaving a comment (or didn’t feel like making the effort to step through all of Blogger’s 9 steps). As I don’t get a lot of these, I’m able to look through these emails and see what is what, and respond accordingly. Through this process, I’ve managed to make some very meaningful contacts. I would hate to think that Reubel would have a muzzling effect.

The fact of the matter is that Reubel sees so much traffic he isn’t able to make the distinctions between what is good and what is chaff. Indeed, that could be personally frustrating, but it comes with the territory. One doesn’t get into the top 100 without a tremendous amount of personal marketing; it only stands that others want his place. Indeed, one day they will have it. Reubel wants a conversation about the underground blogosphere; in a sense, I’m participating right now. I’d hate to see the echo-chamber emerge and start calling for the end of such practice’s (which Reubel clearly hasn’t). The blogosphere is about conversation, whether that be over blog posts, comments or emails.

Thoughts — 13 Comments
12
Jul 06

The Network Effect Multiplier, or, Metcalfe’s Flaw

In valuing a social technology, it is impossible to avoid the enhancement in value the network provides. Stated quite simply, social technologies benefit from an economy that awards value to the service as more people join the service. This, of course, is the network effect; a network gains value as more people join the network.

The classic example of network effect is illustrated in Metcalfe’s law. In valuing a telecommunications network, Metcalfe speculated that the value of the network increased proportionally to the number of participants in the network. As a simple illustration, consider a telephone network with three participants. When the fourth participant joins that network, the value of the network increases for all participants in the networks. Odlyzoko and Tilly, in 2005, further refined Metcalfe when they illustrated that the value of a network doesn’t actually increase proportionally, but logarithmically. To illustrate this refinement, each addition to the network adds value, but in reality, more value is added when my relative joins than someone in Dubai. My patterns of connectivity cluster around my relatives, hence Odlyzoko’s and Tilly’s refinement.

Metcalfe’s law provides the groundwork for a substantial amount of applied network effect theory. One of the foremost applications of Metcalfe is to internet technology, particularly social network technologies. One can easily see the lineage that validates the application of Metcalfe – the internet is indeed a telecommunications network, and the value we perceive from additional entrants is visceral.

Getting to the point, Metcalfe’s law holds fundamentally, but the application of Metcalfe to a wide range of social internet technologies proves remarkably flawed. To illustrate: Metcalfe’s law is built on a core assumption that entrants to the network have a limited set of options. In the 1980′s, when someone joined a telephony network, they had but two options – use the phone or not use the phone. This binary calculation assured that whenever the phone was taken advantage of, the user was getting full value. Ethernet is another telling example; when you plug your computer into an ethernet network, the only options you’ve got are to accept packets or not accept packets. Either way, when you use the network, you’re getting full value.

This notion of “full value” makes the mathematics of network value calculation quite appealing. If everyone on the network gets the same value from using the technology (everyone has the same options – i.e. call or not call on the phone), then valuing the network is absolutely possible. When using Metcalfe (or Reed, or Odlyzoko and Tilly’s refinement) to value a network, the core assumption is that the value we derive from the network is binary – this works for things like ethernet and telephony, but the mathematics prove to be overly crude when applied to social network technologies.

I’ll try to illustrate a comparison. Indeed, Myspace’s network provides two options to you – you can either join or not join the network. If we wanted to apply Metcalfe to Myspace, this is where we’d stop. However, the value in Myspace is much more nuanced than simply being on the network; you can take value from the many things you can do on the network. The network offers a myriad of associations, including friending, grouping, messaging, browsing, stalking – actions that create a compound value that is unique for each network entrant. Indeed, each new entrant to Myspace offers others in the network the chance to create these relationships, but these many types of relationship create a value continuum – which is different than a value binary.

Therefore, the fundamental flaw in applying Metcalfe to social technology is its inherent lack of nuance and granularity. When people join the network, they are given more options than simply connecting; the network is worth the sum of associations and actions that are allowed in the network. We must instead think of network value in terms of a network effect multiplier, as the actual value a network adds to an application is under the direct control of the application designers.

Consider flickr. Flickr is a socially-enabled application built around photographs. Stripped of flickr’s social tools, the service would provide a core value to its users – it would be a very high quality image host and archive. This core value is the “real” economic value of the product; this theory is consistent because flickr users have proven willing to pay for their services. Indeed, the core value provided by flickr is important, but the core value alone is not flickr’s total value. Enter the network, and network effects. Flickr is a socially-enabled tool, allowing users to connect around photographs. The social actions that can be taken in flickr are fairly limited; comments, page views, connections, groups and pools – these are fairly “commodity” social tools (in a sense, all of the social actions are native to the users as they have been previously pioneered). This is lightweight social networking, with very low barriers of entry; the network effect is light as well. To understand the final value of flickr, we multiply the core value by the network effect value (the network effect multiplier).

As a contrast, consider Myspace. Myspace’s core value is quite low. When you log onto Myspace you get a profile, a message box that doesn’t interoperate with the rest of the world, some limited image hosting, etc. However, the network effects of Myspace are tremendous. The size of the network and myriad uses of the network create a network effect multiplier that is much greater than flickr’s. However, since the final value of the network is a function of the core value and the network effect, we see a balancing function.

This balancing function is the key to valuing social technologies. The core value is the raw economic value the service provides to the user. The telephone was useless without the network; however, a service like flickr, or even Myspace would provide value stand-alone. With the telephone, you only had two options when using the network – call or not-call. In flickr and Myspace, you literally have millions of ways to use the network, each with a different value outcome. The network adds value to flickr and Myspace, but the value it adds is distinctly more nuanced than what Metcalfe proposed – and the value the network adds is in the hands of the designers.

As social networking becomes commoditized, as more and more sites make social a part of their experience, the value-add of embracing social will need to be quantified. Metcalfe’s theory is absolutely valid in context, but the applications to social technology lack the nuance that will be required to quantify cash outlays. The good news is that quantifying the value of the network isn’t overly complex. We start with the core value of the service (the non-social value proposition), and the network effect multiplier. As the network effect multiplier is contingent on the site’s design, this can certainly be quantified. Network-enabling a product does not produce a binary value-add; some sites will add lightweight social networking to enhance a core value tool (flickr), whereas others will derive almost all of their value from the network (Myspace). The key to understanding this is knowing that the value provided by the network is variable, and the outcome value of the service is contingent on the core value and the network effect multiplier.

In thinking this through, I’ve tried to focus on the value of the network. However, divorcing the actions you can take in the network from the network’s value kept leading me back to my initial train of thought. The value of a social technology’s network simply can’t be divorced from what you do in the network – the actions you can take are deeply nuanced. We’ve matured from the binary assumption of communicate/not-communicate that network effect theory is built upon. Of course, Metcalfe’s core theory still holds for things like telephony and ethernet networks. However, humans are not computers; our actions, and the derived actions of network participation have variable values. The compound effect of our actions is the network effect multiplier. As we develop socially-enabled applications, consideration of this network effect multiplier will prove useful in determining the value of our labor.

I’m going to officially call this an idea in progress. I’m really struck by the potential value of articulating this properly. At this stage, I’m just at the beginning of doing so. Thoughts, comments and feedback are certainly welcome.

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