Facebook would become another Friendster, still around but ghostly, forgotten by most. Facebook, however, isn’t likely to have such a fate. For one thing, it has attracted many “olds,” and they tend to stay put. (Consider AOL) More than 50 per cent of Facebook’s members in the US are 35 or older, and only 26.8 per cent are 24 or under, according to an analysis of December visitors by comScore Media Metrix.
Network effects
More than demographic stability favors Facebook. The site has shrewdly emulated the “network effects” strategy used by another brand that has long held a dominant position in the computer industry: Microsoft Windows.
Economists use the term network effects to refer to the way the value of a product or service increases in tandem with the number of people who use it.
Immediate gains
A Facebook member enjoys immediate benefits when each friend joins — these are direct network effects. But the average user already has 130 friends, so unless the user is unusually gregarious, the direct effects won’t increase drastically beyond a certain point.
Further, businesses, nonprofits, government offices and celebrities use Facebook pages to disseminate information, thus forming an ever-growing simulacrum of the Web within Facebook’s walls. Network effects are at work here, too: users attract well-known names, which, in turn, draw more users to Facebook. Network effects, if powerful enough, can push a platform past the tipping point, accelerating its growth.
But network effects alone don’t necessarily produce tipping. Users must also perceive a high switching cost —in this case, in time and inconvenience — if they were to move to another social networking site. Facebook increasingly makes it easy for members to remain loyal. Outside sites can become Facebook Connect partners, offering visitors the ability to log on with their Facebook username and continue to interact with their Facebook friends even when they aren’t at the Facebook site.