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Is Facebook ‘Too Big To Fail’?

April 20th, 2011

Facebook is fast becoming the ubiquitous form of both personal and social identification on the Internet and across connected devices. Unlike most of its earlier competition, Facebook has grown beyond it’s simple beginnings as a walled social network; it now powers the social features of numerous other digital experiences. Members can use their Facebook ID to sign into websites, challenge their friends from within video games, populate apps instantly with contacts, and spread feedback and comments all over the web. Heck, as we’ve recently seen, the site is even helping change history in its role in political revolution across the globe. In other words, Facebook is proving incredibly useful and nearly indispensable (gasp!) as the first widely accepted common denominator for personal identity and social features across numerous digital platforms.

So, as membership grows and the service weaves its way into more and more experiences, at what point does Facebook become too big to fail? It is projected that 50% of all Americans will be registered on Facebook by 2013. At this rate, does it begin to make sense that Facebook should become recognized as an integral part of our digital infrastructure, and its social databases regulated as a public resource? Should Facebook’s social web be commodified; becoming synonymous with ‘social network’ instead of merely being one example?

Though it’s the goal of most every startup, the true indispensability of a specific Internet service is a foreign concept; The Internet is simply too young, too unstable, and too marginalized as just one slice of everyday life. Our demands on this digital system are growing, however, and we can look for precedent in other industries and commodities, such as water. Clean and available drinking water is something that most of us see as a common right. It would would seem ridiculous if landowners were allowed to claim full rights over the water in a river that runs through their property, charging all those downstream for the right to drink. If a factory was allowed to pollute a river, harming everything and everyone later exposed to the water, most of us would agree the government should step in and stop them. While Facebook may not be as necessary to life as water (for a few of us, at least), at some point the availability of a free, secure, and universal source of social identity on the Internet will be necessary to create the meaningfully connected digital experiences we all dream of.

The transition of property from private to public resource is never a simple matter. We have a system of patent and copyright expiration for intellectual property, eventually allowing brilliant inventions like Mies Van Der Rohe’s Barcelona Chair or Pfizer’s Viagra (which goes generic in the US next year) to be made and sold by any manufacturer.  However, patent expiration and its terms are always bitterly debated by any affected parties. The digital industry most certainly sends lobbyists to Washington to make sure their concerns are heard on this and other relevant issues.

Of course, one of the primary hurdles for any unified social network is whether or not most people would actually want a singular online identity. Facebook offers complex permissions and groups settings, but personally I use LinkedIn for all my business connections and FourSquare to inform select friends of my partying whereabouts. Most of my other social dealings online are either borderline random or totally anonymous. It’s too tedious to keep recreating a new social network every time I join a new website. So, if the alternative to a unified system is that only three or four of my digital experiences are truly social, it strikes me that unification will eventually win. We’ll just have to figure out how to address best practices for permissions and privacy.

With no one new in the industry able to find a way to compete with Facebook in the social arena, there’s a lot of pressure to figure out how to best socialize new digital experiences. Promisingly, the not-quite-finished HTML5 standard lays the initial groundwork of a social web by including tags to identify the author of an article and of any linked pages. The more we live our lives digitally, the more we will need to continue to develop HTML in this direction. I believe the users of the Internet will eventually need a commodified social tool — a standardized, extensible, protected, and regulated personal identification and address book. With 600 million users (and growing), I am curious to see if Facebook will eventually offer itself (or part of itself) as a candidate for this standard before the government steps in and requests regulation on our behalf.

UPDATE: As I finished writing this article, the Obama administration announced a plan for a regulated marketplace of public and private Online identity providers — perhaps resulting in the very vision I just outlined. If this initiative goes forward, I wouldn’t be surprised if Facebook is counting on being the front-runner, thus cementing their place at the top of the social-web hill for the foreseeable future. Still, we have yet to discover whether people will trust any identification system officially sanctioned by the government.

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