08/26
2010
File under: Future of the Social Web / Comments
A week later there’s still plenty of chatter regarding Facebook’s recently revealed location-based feature, aptly named “Places”. A great deal of the discussion focuses on the fate of existing social applications based on place—particularly foursquare.
I posted last week about my initial sense that places wasn’t quite as polished as it might be and that this might have something to do with Facebook being in a rush to jump into the location game. I also reiterated my point from about six months ago (the idea that Facebook was going to launch this sort sort of geo-social feature has been in the air for over a year) that just because Facebook is very, very big doesn’t mean make it a forgone conclusion that they will crush any smaller players in whatever market they decide to enter.
But let’s back up a moment and think about why Facebook might decide to build this new capability. In the post linked above I sort of take for granted that Facebook wants to be a big player in the nascent location-based social Web scene and that it makes sense for them to want this. Those aren’t controversial assumptions, but they should be. Facebook is in a pretty good spot at the moment with their half billion users and unchallenged position as the social network. Why would they want to risk getting involved in a still quite small, immature niche of the social media world that hasn’t quite yet demonstrated mass appeal or staying power?
Well, what is the alternative and what are the down-side risks? If Facebook doesn’t get involved in location-based social networking and it turns out to somehow be a temporary fad then, they’ve saved some money and maybe get some “told you so” points on a tech blog or two down the road. If Facebook doesn’t get involved and location-based social networking becomes central to how people communicate and share content on the Web, then maybe they have given competitors a narrow opening to knock them off their perch.
“Getting involved” in the sense used above doesn’t mean “crushing all competition”. It means deploying the necessary tools to make the relationship between Facebook and location-focused services not a competition at all.
Look at what they did with Twitter: The transformation of Facebook from a directory of linked users to a stream of constant updates has been gradual, but back when Facebook status updates were first introduced the service was accused of Twitter envy and the two companies were thought about as competing in the status updating arena just as Facebook and foursquare are being spoken of as competitors in the location arena.
But Facebook wasn’t competing with Twitter, they were just putting themselves in a position to be unthreatened by them. Feeding one’s Twitter updates into Facebook is one of the easiest things to do on the site (much easier than managing privacy settings, for instance). But when is that last time you saw someone pumping their Facebook updates into Twitter?
Similarly, foursquare (and friends) allowed users to post their activity to Facebook, but only as flat information, not meaningful location data. Now, once the Places write API (which will allow external services to send geo-tagged data into Facebook) is enabled, you’ll be able to get all your friend’s location updates through Facebook just as you can get all your friends Twitter updates through Facebook. In other words, Places protects Facebook from the horrible possibility of people looking elsewhere for information about their own social graph.
This makes a lot of sense. Facebook’s dominance isn’t because it’s the best at everything but because it can absorb enough of anything that it is good enough for most people at it. From Facebook’s perspective: “If the social location thing fades away, so be it. If it turns out to stick around, don’t give people an excuse to go elsewhere for it.”
That doesn’t require Facebook to eliminate foursquare. It doesn’t even require Places to be innovative or interesting.
And winning here doesn’t have to be about keeping people from using other services. People still use Twitter but no one talks about Twitter displacing Facebook or anything like that. Similarly, Facebook’s goal may not even be to keep potential foursquare users around to actually profit from them but rather to prevent a coherent case from evolving that Facebook missed the boat on the location thing. There have been rumors of a Facebook IPO for years now. The value of the company is tied to perceptions about how it fits into the market for social media services generally. Places helps insulate Facebook from negative evaluation, so it is a good idea from the perspective of people whose primary concern may soon be the opinions of people without a great deal of understanding of this market (people who would determine Facebook’s potential share price).
So I believe the current discussion about Facebook’s entry into the geo-social game misses the point by focused far too much on an either/or relationship between Facebook and foursquare. If anything should be made clear by the big changes the major social web players have made this year (Facebook’s Open Graph, Twitter’s @Anywhere), it’s that tactical integration has become a preferred approach to achieving market dominance.

Daniel Luxemburg, who leads SnapDragon’s work on leveraging new social Web technologies, has just released a new iPhone application called Mayorama. It is a client for the location-based social network Foursquare. Mayorama focuses on helping users become “mayor” (most frequent visitor) of their favorite venues in the system.