Monday, 29 October 2007

Would They Have Bought Friends? Or NBC? Or Comcast?

Digital has changed the rules but does anyone even know what the game is? It has struck me that all the purchases and mergers seem to say more about what's not happening at many of these companies (tight well thought out strategy) than what is (complete reactionary chaos).

If we consider the rise and fall of so many trends on the Web, do we really think throwing a kazillion dollars at the latest one is really a good idea? SKYPE anyone?

Some might say, social networks aren't going away. I'll be a radical and say, connection on the Web will never go away and what we are calling social networks today will rise and fall and get reinvented in ten years under a new name that will spark a new buying frenzy (it’s amazing the way I go out on these limbs).

Peter had a great point the other day and asked the question whether or not any of these companies would have bought Friends at the height of its popularity. Or (just in case y'all start yelling the platform word at me) NBC or even the Comcast?

Business doesn't seem to be able to re-organize itself in an networked world. When new ecosystems pop up that gain momentum, companies want to buy communities as if they are an ownable commodity. I don't think it's going to work. I have trouble seeing what many of these businesses are going to gain.

Feel free to enlighten me....

ps. If you tell me data, i don't believe it. Most companies don't leverage the data that they ALREADY have including behavioural data on their own websites for goodness sake. And they get that for free.


Mark said...

Among the problems is that people don't appreciate the (laws of media) principle of obsolescence: that when something is about to lose its ability to structure or profoundly influence the society or culture it will appear to be at the peak of its presence. In fact, it is at the end of its influence. Those who are unaware of effects will see it as a time to buy; those who really understand the effects of things we conceive and create will know that the end is nigh, and something else is on the rise.

Then again, for Microsoft, the price of Facebook is lunch money, and the benefit is bragging and "being hip" rights.

Leigh said...

Yes I would have to agree Mark. Isn't it amazing though how fast it occurs? It's making my head spin these days....

Paul McEnany said...

It's a tough one. I probably wouldn't recommend a company to run out and buy twitter, or even second life because that ecosystem isn't as much a hub of your online world, but more of an eye to what the future might look like.

But facebook, just like myspace, is a totally different ballgame. These platforms are the hub of a much larger experience. Most of the people’s social lives are built around it, and it allows Microsoft to leverage it in a lot of different ways. If you look at MySpace, their record label seems to be doing pretty well, they’ve got they’re own video property (which still needs a lot of work), and they keep adding more and more to eat up share of surfing time. Same with facebook, especially with facebook applications. They started with a community, but have built it into an essential part of the online experience.

But your right, you can’t just buy loyalty, but they’re not just buying loyalty to the platform, but loyalty to their friends who are using that platform. And it’s a huge pain in the ass for those friends to switch to something else when their lives revolve around it so much.

So they probably will rise and fall, but stable networks like these will take much, much longer to deteriorate because of all the time people currently using them have invested. If someone makes something only incrementally better, it’s probably not worth it for a person to switch.

And really, if this means facebook will continue to use Microsoft for search, they’ll probably make their money back pretty quick anyway. If Google or Yahoo bought it, they’d lose a ton of current revenue.

Of course, it’s still the web, so at the end of the day, your guess is as good as mine.

Leigh said...

Has anyone run the numbers? I'd be interested if they are really starting to do business planning looking out past their next quarter.

I'm not really buying our social networks being built around these sites...i need to think about why and give a more thoughtful response (i'm tired tonight)

p.s i think Facebook has to be past it's hip friend Lianne's mom is on it. Love her but definitely passed hip....

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