eBay as Emergent Digital Social Network
I.
We human beings are social creatures. No news there. The news of late is that we can build digital support systems for our social natures. The archetypal example of these, Friendster.com, allows users to laboriously create a network of their “first-degree” contacts – those to whom they are directly connected – which is then automatically linked to the contacts of those contacts, and the contacts of the contacts of the contacts, etc. Most people on Friendster have less than 150 first-degree contacts (there are strict anthropological reasons for this), perhaps 3000 second-degree contacts, and maybe a half a million third degree contacts.
It’s an impressive achievement, and proves that yes, indeed, we are all closely connected. But beyond the demonstration of connection, a specter has been haunting all these social networks, and Friendster especially. It’s the still-unanswered question of “Why? Why do you want this digital social network? What is it good for? Building a Friendster social network – which I did over a week in July 2002 – was a “web-crack” experience, intensely addicting, as I sought out my first-degree contacts by scouring the first-degree contacts of my friends. At the end of that week I had about 120 first-degree connections; substantial, to be sure, but to what point?
Everyone in Silicon Valley knows that Friendster, after a massive VC cash infusion in 2003, is now up for sale, and has been on the block for months. Other social networks, such as MySpace, have sold for hundreds of millions of dollars (in MySpace’s case, to NEWS Corporation). But Friendster, which might have been worth $200 million 12 months ago, won’t even sell for $50 million today – the reported asking price. Friendster, analysts say, is “too broad”. Which is really just another, more politic way of asking, “Why?” What does Friendster do for me? Oh, yes, it can remind me of the birthdays of my friends. I suppose that’s something.
There are any number of “purposeful” social networks. The most significant of these, in business terms, is LinkedIn, which is a business-oriented social network. It’s meant to be a way for business professionals to connect, use each other for referrals, and send messages to people they don’t know through people they do know. Yet, although I’ve been a LinkedIn member for 2 years, I’ve only received two referral requests in all that time. While LinkedIn offers this capability, only a small minority of its users are taking advantage of it. And although many of my business contacts have LinkedIn profiles, I see and hear progressively less of LinkedIn every day. LinkedIn, like Friendster, is dying. Thus, purpose is not enough for a social network. The organizing principle is a good idea, but in itself it is insufficient.
II.
The broad failure of the first generation of digital social networks (even NEWS Corporation is wondering how to monetize MySpace) is due to a basic misunderstanding of what social networks are, and how people interact with their social networks. Social networks, in the human sphere, are dynamic and constantly evolving; we maintain some relationships throughout our lives, but others come and go, as we change jobs, cities, and partners. A web page can’t even attempt to encapsulate that sort of complexity, and this highlights the basic problem: you can spend a week building up your Friendster contacts, but will you spend the hours-per-week keeping that list fresh? Social networks are information hungry, and static websites like Friendster and LinkedIn are, consequently, information starved. A college student might cruise the Facebook looking to find a date, and will invest time in the Facebook equivalent to any expectation of return. (Since college students are ruled by their hormones, this can be a lot of time.) The Facebook promises a return on investment, something that Friendster and LinkedIn can’t offer. MySpace has established itself as a promotional site for musicians, which has resulted in a few recording contracts, and greater visibility for the artists – again, probably enough of a return on investment to justify the time spent.
The most impressive example of a working social network isn’t known as a social network – and this may be why it works so well. For a decade eBay has carefully built up a social network with commerce as its organizing principle. Every buyer and every seller exist in a network of relationships, which is constantly reinforced by the only requirement eBay makes on its user base: that they rate the transactions conducted through eBay. In this way, anyone on eBay can quickly learn the history and “ranking” of any buyer or any seller, adjusting their commercial behavior appropriately. eBay translates the flow of commerce into an emergent digital social network, one which has enormous utility. This all happens behind-the-scenes; your eBay profile is just the bare minimum information needed to establish your identity for commercial purposes, and the information your profile acquires thereafter is a product of your interactions with eBay. Within the limited domain of commerce it functions well (not perfectly, but more than good enough), and has resulted in the first sustainable digital social network on the Internet.
The lesson we can draw from this is simple: social networks emerge from interactions; they are not created in a one-off process, but rather, grow and change over time. The success of any digital social network relies on its ability to be able to (relatively) invisibly monitor the activities of the actors within that digital social network, and seamlessly weave these activities into a social network model. In this sense, eBay has it easy, because it is large enough to encompass a broad range of commercial activities, and can therefore draw from a wide range of interactions. Yet eBay is also specific: it restricts itself to commerce. You can’t get a date from eBay, or a job recommendation, or a band’s new single. You can only buy and sell. Within that domain, its emergent digital social network is without peer.
October 17th, 2006 at 9:26 pm
[...] Reputation Models – This one is new to me. Mark Pesce, while he doesn’t give it a name, talks about improving on previous reputation models by analyzing behavior. He responds to the recent Craig’s List experiment (warning: sexually explicit), in which a user pretended to be a girl looking for sex and then published all the responses he got. Pesce argues that Craig’s List could track and profile users based on their navigation of the site and their established network: “Craigslist does have a login capability, so it can potentially record each of the interactions users have through the system. It could collect data about the quality of the trust interactions users experience on Craigslist, and use this information to annotate all of the postings on the system. In short, every posting on Craigslist could be accompanied by metadata which allows users to have some basic sense of the trustworthiness of the other participant in a given transaction. With each successive transaction, Craigslist could begin to model an emergent digital social network“ So in this application, past behavior is presumably compared and contrasted with that of other users and ends up being an indicator of trustworthiness: ‘Recommended Friends‘. [...]