Fred Stutzman has written another thought-provoking gem concerning social networks called The Network Effect Multiplier, or, Metcalfe's Flaw. Here are a couple excerpts:
The fundamental flaw in applying Metcalfe to social technology is its inherent lack of nuance and granularity. When people join the network, they are given more options than simply connecting; the network is worth the sum of associations and actions that are allowed in the network. We must instead think of network value in terms of a network effect multiplier, as the actual value a network adds to an application is under the direct control of the application designers.He's calling this a "an idea in progress" and is looking for thoughts, comments and feedback.
The network adds value to flickr and Myspace, but the value it adds is distinctly more nuanced than what Metcalfe proposed - and the value the network adds is in the hands of the designers.
As social networking becomes commoditized, as more and more sites make social a part of their experience, the value-add of embracing social will need to be quantified. Metcalfe's theory is absolutely valid in context, but the applications to social technology lack the nuance that will be required to quantify cash outlays.
Technorati Tags: social.networks, opinion
Friday, July 14, 2006