Analysis: Who can disrupt Facebook?

By Steven Johnson

Photo: Mulaou

In early 2004, as Mark Zuckerberg was furiously coding the first iterations of Facebook in his Harvard dorm room, the internet reached what seems like an unforgettable milestone: 750 million people were connected. It’s hard to pinpoint a single date for the internet’s birth. It’s fair to say it took at least three decades to reach that scale.
Today, just eight years after its founding, Facebook has more than 750 million users as a single company. After such astonishing growth, the company is on track to achieve more than just a multibillion-dollar public offering. Facebook is on the cusp of becoming a medium—one that is more like the TV industry than a single network and more like the network as a whole than just a network endpoint. The evidence that this transformation is well underway goes far beyond the sheer number of users. Many businesses are now bypassing the network entirely and growing exclusively on Facebook. The platform has spawned one billion-dollar company (social gaming giant Zynga) and swallowed up another (photo network Instagram). The average time a user spends on Facebook has risen from 4.5 hours per month in 2009 to nearly 7 hours today—more than twice as much as any other major Web competitor.

Facebook's growing dominance suggests that the platform may well represent the major evolution of the third network era. First, the Internet popularized the key organizing principles of peer-to-peer architecture and packet-switched data. Then, the web pioneered a new set of dominant, indeed fundamentally literary metaphors: a network of "pages" and links that are like footnotes. While both platforms are powerful, they are organized by data rather than users. From a computer scientist's perspective, this may not seem like a flaw in the ointment. However, most humans do not naturally organize the world through the metaphors of domains or hypertext; instead, they mentally understand the world in terms of their social networks of friends, family, and colleagues.

So it should be no surprise that we now find ourselves drawn to new platforms based on these social maps. And the bigger the platform gets, the more we tend to get hooked. The Internet—meaning everything from email to file trading to IP telephony—was always technically bigger than the World Wide Web, but somehow the management of its massive adoption became overwhelming. The Web became the main attraction; packets and DNS lookups became unfathomable, essential but elusive. Now Facebook is threatening to give the Web its own version of its own. The difference, of course, is that no one owns the Web—or that we own it in some strange way. But with Facebook, we are ultimately just tenants on a field; we make the land more productive with our labor, but the farmland ultimately belongs to someone else.

It took the Internet 30 years to reach 750 million users, and Facebook 8 years to reach a similar number.

Facebook's success explains why the criticism of the company has only intensified as it heads toward what could be the most successful public offering in the history of capital. It's easy for customers to tolerate bad behavior when they have the choice of shopping at other stores down the street. But when a company dominates an entire street, small complaints can cause huge waves. A few years ago, the main criticism of Facebook revolved around its ability to kill time. Today, complaints about the company go further: We are told that Facebook threatens our core social values, our privacy, and the World Wide Web itself.

The most vociferous complaint from Facebook's critics is that the company has a long history of coveting, if not outright abusing, its privacy terms. An early attempt at personalized advertising, Beacon, became notorious after users filed a class-action lawsuit claiming that their private online activities, including transactions on various commercial sites, were revealed to advertising companies and friends without their knowledge. Facebook's newly implemented Open Graph protocol gives developers the ability to share user behavior in a Facebook app—a third-party app like Zynga that runs inside Facebook—with other apps that might want to know about that user. For example, if you claim to have cooked a special dish for dinner in a recipe app, that information could be spread to your blog or put on a diet app that tracks how many calories you've consumed.

There's no doubt that Open Graph will lead to some very ingenious and incredibly useful new tools, not to mention a whole host of mindless social entertainment. The problem is that most of us don't have the time to monitor all the different ways our behavior is being shared and tracked across the web. Going into an Open Graph app with your Facebook account will reveal a warning along the lines of: "This app may: publish my status messages, captions, photos, and videos on my behalf; use my data at any time; and use my data even when I'm not using it." Technically, this is just describing the consequences of a world of "seamless sharing" (to use Facebook's preferred phrase). But, in reality, do users know what they're signing up for?

To its credit, Facebook already gives users very granular control over their privacy—the privacy settings page includes dozens of different options for hiding or showing content. And the company has a long track record of ultimately succeeding in easing users into new features; initial critics usually soften into adopters and, before long, Facebook enthusiasts. Even the News Feed feature, which faced strong resistance when it first launched, now seems so inoffensive (and indispensable) that it was quickly forgotten. When it makes a mistake, the company seems to learn from it: Beacon was caught in the crossfire. And more recently, Facebook has greatly simplified its privacy settings page so users don’t have to wade through an initial list of options.

I suspect Facebook will always live with this kind of logic, pushing the boundaries of social sharing, and then when it goes too far, the company responds by letting users and critics pull it back on track. As long as it continues to listen to those critics, that model is likely to lead to the best outcome. Given the nature of the site, it makes sense for Facebook to set defaults that encourage users to share more; it's up to us to help it learn where the line should be.

When Facebook finally announced plans to go public in early 2012 and filed its S-1 with the Securities and Exchange Commission, its filing included a letter from Mark Zuckerberg. It was an unusual document, a mix of legalese and financial models: an earnest and outspoken blend of media theory and hacker mythology. “Facebook was not created to be a company,” Zuckerberg wrote, “but to fulfill a social mission — to make the world more open and connected.”

Yes, if you decide to quit Facebook, you can delete all your data. However, you can't actually take your data with you.

A more open and connected world? You’d have to be a bit cynical or misanthropic to be against this laudable goal. The problem is that for all Zuckerberg’s talk, he and company have shown an increasing reluctance to connect with other networks. The new update to “seamless sharing” makes it harder for users to link to external web pages from within Facebook. If you see, say, an interesting headline from a Guardian article that one of your friends has shared, clicking on the link doesn’t take you to the Guardian’s website; instead, a “block” notification pops up asking you to install the Guardian Facebook app, which will ensure that all the Guardian articles you’ve liked are delivered to your friends via the Open Graph. Writing on the technology blog Read Write Web, Marshall Kirkpatrick observes that "Facebook's implementation of seamless sharing violates a fundamental contract between Web publishers and their users. When you see a posted news headline and click on it, you expect to be directed to the site of the news story described in the headline text—not to a page urging you to install software on the online social network you're already logged into." Blogger (and Wired columnist) Anil Dash is outraged by Facebook's misleading, paranoid warnings to users who dare venture out onto the World Wide Web. He even argues that Facebook is essentially malware—and that services that block malware should instead start warning users to beware of Facebook.

To say the least, this reluctance to connect to the outside world is at odds with Zuckerberg’s advocacy of open connectivity. Hyperlinks are the connective tissue of the online world; breaking them up by persuading users to download apps makes it easier for them to passively share data with friends, but the costs—severing one’s own connections and manipulating users away from the dark corners of the web—clearly outweigh the benefits. Surely, we can find ways to share seamlessly without killing the seamless surfing that has worked so well for more than two decades.

Underlying all this criticism lies a more fundamental problem: Zuckerberg can’t just want to stay away from better privacy policies or user interfaces. When he says in his prospectus letter that he’s motivated by a desire to expand the web of connections between people, we believe him; he seems like an enthusiastic, well-meaning young man with a suitably ambitious purpose, and the goal itself is impeccable. Eventually, however, he will have to succumb to his own meteoric rise. It’s admirable that he says Facebook has more of a social purpose than a corporate one. And he may even believe it. Right now, however, Facebook is more like infrastructure—like roads, bridges, and water pipes, it’s a kind of network that we all rely on.

In the letter, Zuckerberg wrote this striking line: "We believe that the world's information infrastructure should resemble a social graph — a bottom-up or peer-to-peer network rather than the fully unified, top-down structure that has existed until now." If by "until now" Zuckerberg meant until about 1975, then he's got it right. But if by "until now" he meant, ah, until now, then this is just a weak statement.

Now, we have bottom-up, peer-to-peer networks that have served us well for decades. Actually, we have two networks: the Internet and the World Wide Web. Until now, open, nonproprietary networks have always trumped closed networks, because the dustbin of our technological history is littered with closed walled gardens like CompuServe, Prodigy, and, of course, the original AOL. AOL survived only by tearing down most of its walls. For a while, it seemed as if social networking platforms would follow a slightly different pattern: not a single open platform becoming the dominant force, but a succession of proprietary networks that rose and fell in small generations: Tribes, Friendster, Myspace, and so on. But somehow, Facebook reached escape velocity and broke free of the cyclical stranglehold.

The World Wide Web and the Internet's platforms are purely peer-to-peer, owned by all of us. Facebook is a single company, owned by shareholders, and the social graph that Zuckerberg touts is a proprietary technology. We can help Facebook grow its open graph by sharing every Spotify track we listen to or every Guardian article we read. If we decide to leave Facebook, we can delete all our data. But we can't take it with us.

And when we think about ownership, there’s something else to consider: Not only does Facebook own our data, but ownership of Facebook itself is highly concentrated. The most eye-popping fact revealed in the S-1 isn’t its radically ambitious social mission but that Zuckerberg personally controls 57% of the voting stock, giving him far more power over the company’s fate than Bill Gates ever had. There’s a serious cognitive dissonance here: Facebook says it wants to build a peer-to-peer network for the world, but within its fortified walls, the company prefers top-down control, concentrating power in the hands of a single leader.

This gives us the power we never expected to overthrow Facebook. The 21-page prospectus describes the risk factors facing the company in the future, including a lengthy description of the competitive threat from Google, Twitter, Microsoft, and other overseas social networks. However, the document says almost nothing about the dangers on the other side: the risk of no competition, which could lead to an antitrust ruling. The prospectus only obliquely mentions this possible risk in one sentence: "Some changes brought about by legislation, regulatory authorities, or enforcement, including settlements and agreement litigation, may have an immeasurable impact on us."

Zuckerberg gleefully chronicles how, when Facebook’s photo service was introduced, it almost instantly became the world’s largest digital photo repository, despite having a lesser feature set than competitors like Flickr and Photobucket. Zuckerberg’s argument is that Facebook’s social network is so powerful that the ability to distribute photos on it outperforms any competitor’s offering. But in an antitrust context, Facebook’s instantaneous dominance in photo sharing looks more troubling: a company using its strength in one area to crush competitors in another. Assuming the company continues to grow, you can almost bet that the next time Facebook makes a big acquisition like Instagram, you can bet that lawyers at the Department of Justice will be scrutinizing it closely.

Facebook pointed out that it has a lot of competitors, such as Google+, which has accumulated 170 million users in less than a year, and there are also smaller social networks that have reached critical mass—Foursquare, Path, Spotify, etc. But Facebook has defeated them one by one and continued to expand. The winner-takes-all network growth dynamics are sweeping: as more people join Facebook, the network becomes more powerful, and even more people join. The last two times we saw such a large-scale network runaway effect were Microsoft's Windows operating platform in the 1990s and Google's advertising business in the 2000s—both companies eventually faced antitrust scrutiny. In its prospectus, Facebook seems more worried about competition undermining its strength than being seen as an oligopoly. But history tells us that antitrust investigations may prove to be the greater threat. If Facebook continues to shift from a website to a media operation, it is very likely that Zuckerberg and his team will have to find a way to implement open standards for its social network, or at least some of its content.

That may make Zuckerberg feel better when he says Facebook was "not created to be a company." But a company has grown into one of the most powerful in the world. Facebook has done much to make the world a more connected place. But if Zuckerberg wants openness to remain part of his social mission, he's going to have to start tearing down some walls.

Wired correspondent Steven Johnson (@stevenbjohnson) is the author of a book, Future Perfect: The Case for Progress in the Internet Age, out in September.

Annotation:

1. Iteration algorithm: A basic method of solving problems with computers. It uses the characteristics of computers that they are fast and suitable for repetitive operations to allow the computer to repeatedly execute a set of instructions (or certain steps). Each time this set of instructions (or these steps) is executed, a new value of the variable is derived from its original value.

2. Packet switching: Transmission and exchange are carried out in packets. It is a store-and-forward switching method, that is, the packets arriving at the switch are first sent to the memory for temporary storage and processing, and then sent out when the corresponding output circuit is idle.

3. Packet: The unit of data in TCP/IP communication transmission, also generally called "data packet". Some people say that the data transmitted in the LAN is not "frame"? That's right, but the TCP/IP protocol works on the third layer (network layer) and the fourth layer (transport layer) of the OSI model, while the frame works on the second layer (data link layer). The content of the upper layer is transmitted by the content of the lower layer, so in the LAN, the "packet" is contained in the "frame".

4. Domain Name Resolution (DNS): A service that points a domain name to a website space IP, allowing people to easily access the website through the registered domain name. Domain name resolution is also called domain name pointing, server settings, domain name configuration, and reverse IP registration, etc. To put it simply, it resolves easy-to-remember domain names into IP addresses. The service is completed by the DNS server, which resolves the domain name to an IP address, and then binds a subdirectory to the domain name on the host of this IP address.

5. Internet: A network of networks. It connects physical networks of different types, sizes and locations into a whole using TCP/IP network protocols. It is also an international communication network that integrates modern communication technology and modern computer technology, and integrates various information resources from various departments and fields, thus forming an information resource network shared by online users. Its emergence is the inevitability and symbol of the world's transition from industrialization to informatization.

6. World Wide Web (Web): Also called WWW (World Wide Web), or W3 for short. Developed by the European Organization for Nuclear Research (ERN), it aims to facilitate scientists around the world to communicate, exchange information and query information using the Internet. WWW is based on the client/server model. WWW is based on the Hypertext Markup Language HTML (Hyper Markup Language) and the Hypertext Transfer Protocol HTTP (Hyper Text Transfer Protocol). It is an information browsing system that can provide Internet-oriented services and a consistent user interface. Among them, the WWW server uses hypertext links to link information pages, which can be placed on the same host or on hosts in different geographical locations; this link is maintained by the Uniform Resource Locator (URL), and the WWW client software (i.e., the WWW browser) is responsible for information display and sending requests to the server.

7. The difference between the Internet and the World Wide Web (WWW): The Internet uses hypertext and hypermedia information organization methods to extend information links to the entire Internet. Currently, users can use WWW to access not only the information of Web Servers, but also network services such as FTP and Telnet. Therefore, it has become the most widely used and most promising access tool on the Internet, and is playing an increasingly important role in the commercial field. The WWW client program is called a WWW browser on the Internet. It is software used to browse the WWW homepage on the Internet. At present, the most popular browser software are Netscape communicator and Microsoft Internet Explorer.