Enough of the Facebook Feeding Frenzy!

Face HypeDo you feel as I do that Facebook is becoming just a touch over-hyped? I tried to avoid Facebook in my feed reader and twitter stream today but unfortunately the only other news was all hype too.

OK, Facebook has a lot going for it, but is it really that big a deal? Are companies developing Facebook apps making more money off it than they would investing the same capital in building any other web property?

It smells like a bubble to me. When people are investing just because other sheeple are investing that is a sure sign, right?

I’m not picking on Facebook with this. There is another community that I think gets far too much attention also, Second Life. It’s the same story there; “But look how many registered users they have! A captive audience for our marketing! We will make revenue eventually, somehow!”. How many exactly are making a profit, hmm?

While this does come across as negative and cynical, I am prepared to be proven wrong in this. If someone could point me to where someone is making actual profits in either case I would be happy to see it. I want the web to continue being a great place for all of us to make some dough. It’s just I fear over-hyped services that get so much mainstream media attention and VC dollars actually work against that rather than for it.

Posted on October 25, 2007 by Chris Garrett 
Filed Under Web 2.0

Comments

14 Responses to “Enough of the Facebook Feeding Frenzy!”

  1. Tomas Forsman on October 25th, 2007 2:35 pm

    I couldn’t agree with you more but I also think you are missing some points.

    1. Yes, Facebook is overvalued and unless they drasticly change their image over the next 4-6 months they will be run over by other sites like Orkut or something that Stephen “The antigymnast” Stephenson is working on in his basement right now.

    but

    Big companies doesn’t always care about the long run. It’s all about being seen as the “right now” company. They are probably prepeared for when Facebook hits the dust and have money ready for the next hype. In the long run for some companies it’s all about always having the image of being where the hype is.

    2. There are a small percentage that actually earn money through Second Life. Even smaller if you don’t count those that save money by holding meetings in there since they could have saved that money with ordinary tele/videoconferencing. The truth is that almost everyone that makes money in Second Life could easily made more if they spent that energy outside.

    but

    Besides from the “but” in the former argument being true here as well you are also missing something vital when it comes to Second Life. Second Life is not ONLY a commercial application. This goes for Facebook as well. And I don’t mean to point to the fact that users are having fun in there, even though they seem to have. Second Life is used for a lot of things that are simply good for the community. Teachers are experimenting with Second Life as a way to reach out to students. I don’t care if it’s the best way to do it…the fact that they are trying something new is the important part. People with social and physical handicap can go out dancing with other people or go to a concert and listening to live music without being afraid of being ridiculed. I have a project going on in Second Life right now that shows how easy it is for people that live on the country-side to get out to others with their art, photos, music or other culture by using Second Life as a platform. Nothing of this could happen unless companies like IBM spent millions of dollars in there because schools and institutions wouldnt have taken it seriously.

    My point is that the world is changing, we will have big and small online communities and we will have big metaverses. There is no doubt that we are hyping these things up in media but that’s not a bad thing when you consider that it makes people think creativly on problems. They start thinking “can we solve this by using Second Life?” instead of not thinking at all in some cases.

    Hope I atleast made some sence =)

    Tomas Forsman aka. Tam Wyler in Second Life ;)

  2. Chris Garrett on October 25th, 2007 5:20 pm

    Tomas you make some excellent points :) I hadn’t really considered the education aspects as the “noise” is so much around commercial stuff.

    My feeling is both the applications would be SO much more interesting if the publicists and the bandwagons stayed away. If substance came before VC dollars they might be more interesting and ultimately more profitable.

  3. Web 2.0 - Social Media - Internet News - Blogging » Enough of the Facebook Feeding Frenzy! on October 25th, 2007 5:29 pm

    [...] Doug Sherrets wrote an interesting post today onHere’s a quick excerptOK, Facebook has a lot going for it, but is it really that big a deal? Are companies developing Facebook apps making more money off it than they would investing the same capital in building any other web property? … [...]

  4. RIck Galan on October 25th, 2007 6:00 pm

    A-freaking-men. I know facebook is very popular and has a lot of potential. It’s a great product. But sweet moses there are a lot of other things to write about! That and the iPhone (which luckily has slowed down a bit) comprise like half of my feed list some weeks.

  5. Tomas Forsman on October 25th, 2007 6:54 pm

    Chris, I agree that to many companies build castles out of nothing when they enter these “new” platforms. When I lecture about Second Life I often take up IBM as an example of success and failure in Second Life. They spent 10 million dollars at an early stage on their precens in SL. For them it has payed off. They have recieved a lot of attention for what they have done in there and they are the company closest to LindenLab. And here comes one of my favourite words ;)

    but

    they could have done so much more with that money. I am head of a big venture in Second Life in sweden based on projects, not company money. We’ve spent somewhere around 25000 dollars and we have created so much that contributes somehow to the wellbeing of others. We have helped schools by exploring how education in Second Life works. We have brought culture from the countryside to the masses by helping singers reach out through the 3D platform and we have held discussions on topics ranging from equality to autism.

    I would say that when it comes to human worth we’ve done a great deal more then IBM with far less money…in Second Life that is. Here comes the second…

    but

    we wouldn’t have done any of this if IBM hadn’t spent $10 000 000 and if the Swedish Institute hadn’t opened the worlds first virtual embassy in Second Life and if General Motors hadn’t released a preview of a car in Second Life before launching it in real life. The media wouldn’t have cared about Second Life if Big Company hadn’t put the money in there, if that asian guy hadn’t become a millionaire in there. Nobody cares about the good stuff but the good stuff can ride the wave of a hype as well ;)

    This post didn’t have a very clear red thread but I guess my point is that if the platform is good the hype and money put in there can be used for good purpouses. My view of Second Life is that it’s the predessessor of a 3D internet and the more we hype it the faster we’ll get to the next stage…and that’s where things get interesting.

    I think I’ve taken up enough of space here now ;) Try out Orkut and let us know what you think…it’s the most used part of the google network after all =)

  6. Tomas Forsman on October 25th, 2007 6:58 pm

    I forgot to mention one important point on Facebook.

    Facebook represent a need that we’ll see becoming more and more fullfilled by companies in the future. We don’t want internet to be a thousand different things, we want everything to connect to eachother. Facebook, Twitter, your blog, my blog, msn, our mobile phones, our browsers, ip voice, 3D worlds…we want to jump seamlessly between them.

    Facebook has taken a small step to fullfill that need, or want, by interacting with as many other webbapplications as possible.

  7. Adam Snider on October 25th, 2007 7:01 pm

    While I enjoy Facebook, I definitely agree that it’s highly over-valued.

    I mean, Microsoft’s recent investment ($240 million for a measly 1.6% of the company) gives Facebook a valuation of $15 billion. I fail to see how Facebook can possibly be worth $15 billion.

    It seems ridiculously over-valued, and I have no idea what business plan can justify that sort of valuation.

  8. Chris Garrett on October 25th, 2007 9:15 pm

    @Rick - I am an new apple fan but some of the cheer leading nearly put me off ;)

    @Tomas - I am hoping there will be an open source second life and an open social network. Second life could be so much better if the tools and the environment were public, free and open I think. Facebook to a lesser extent but I am concerned that while it is quite benign now that might not always be the case.

    @Adam - Large scale grabbing of private data + hype :)

  9. Yoav Ezer on October 25th, 2007 10:19 pm

    Hey Chris,

    Think about this: Facebook will configure their robots.txt to let the Microsoft agent in but keep the Google bot out.

    Ooouch!

  10. Tomas Forsman on October 25th, 2007 11:05 pm

    Yoav:
    Indeed, right now Microsoft is working hard to catch up to Google on the search market. Why? Because they want the revenue of advertisement!

    Bigger picture, always.

  11. Tomas Forsman on October 25th, 2007 11:08 pm

    Chris:
    Linden Lab and IBM recently announced that they are working towards an open standard where you can jump between virtual worlds using the same economy and the same avatar/account. We won’t have a 3D internet until people are able to use the world that you are hosting on your own server with a common client, no matter what server side 3D platform you choose to use.

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