It started some years back when Mark Eliot Zuckerberg visited RenRen in China. At the time RenRen was the star of China’s social media frontier but the business model was insane. They were charging US$65,000 per year for a business to have a page on their site. This was just the page, no additional advertising. When Mark returned to the U.S. Facebook immediately release a whole slew of RenRen like marketing options. . . surprise? Well the lesson from this should be that RenRen soon died or, more precisely, is a brain dead corpse on life support that investors refuse to pull the plug on. Apparently when money is involved some lessons are harder to learn.
And now lesson number 2.
In December 2013 Facebook made a change that literally, not figuratively, destroyed what had made it arguably the most successful communication application in the history of the world. They all but shut down the social graph. What does this mean? Well the social graph is a fancy way of saying “word of mouth” or how you and me share stuff with our friends. Facebook was based entirely on this and it is the reason it spread to 1.3 billion people so fast. Because friends shared with friends. But Facebook last December said “we don’t care what you have to say and nobody else does either. So if you want to be heard you have to PAY! Most of us do not see a big change because it is largely hidden from our view. In the past when a post was made our friends Liked and Commented, but also many others got to see it too, it touched their lives. Under the new rules only the tightest circle gets to see. Let’s put it in context:
I first learned of the devastating Japan 2012 earthquake on Facebook from distant friends. That was when the social graph was in full effect. But now with these new restrictions it is questionable whether I would learn about it on Facebook today. The sphere of influence has shrunk greatly, it is a type of censorship has been put in place unless payment is made.
So why is Facebook doing this? Basically because they are lazy turds. Advertising is the world’s second oldest profession, but for reasons unknown the greatest minds of the world can not seem to find a replacement. Maybe we need to look at China again as they learned their lesson when Facebook did not.
The current wave of apps coming up in China are not supported by a traditional advertising model. Instead they offer value added services to Fans at a cost to businesses and through sale of virtual goods. I could go on at length with case studies here, but I think I will save them for another blog.
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