The End of Social Media as We Knew It

I remember that I compared Facebook's size some years ago in presentations to the size of the United States. They both had roughly the same amount of inhabitants; 400 Million. Today, Facebook has 1.6 Billion inhabitants. That is roughly 4 times the United States, it is all of China and a bit more, or, looking at my country of origin, 95 times the Netherlands. 

Remember Web 2.0?

When the internet matured at the end of the first decade of the 2000’s, we moved from what we now refer to as the 1.0 era to Web 2.0. Browsers matured, computer speeds increased exponential, as did the bandwidth of our connections. It was the era of MSN Messenger, MySpace and some local hero networks like Xing in Germany, Hyves in the Netherlands and Orkut in Brazil. What made the web worth a ‘2.0’ extension, is the fact that it changed from a one-way-publication channel into an interactive one. It massively increased the user-generated-content part on what had been a predominantly institutional publishing space. 

Blogging grew to new heights (still one of the biggest social media categories on the net). Commenting on blogs, reposting. The first review sites launched. And on the social networks individuals started to share updates, photo’s and sharing their daily life activities. Not to forget: in 2007 Apple launched the iPhone, which would be the start of an incredible growth in number of internet connections and ways to communicate.

The Big 3

Over the course of the years the social networking space has delivered what I would call ‘the Big 3’: Facebook, LinkedIn and Twitter. Especially Facebook brought all local and regional networks to their knees. Advertising, but maybe more the network-effect itself (the more contacts you have on one and the same network, the more value that network offers to you) made it the biggest social network on the planet. LinkedIn, smaller in size, but dominant in the B2B space, developed into the place-to-be for business contacts, business events, groups and business related user generated questions and answers. Twitter finally, the smallest one, gained a very visible position as an ‘in-the-moment’ news and opinion delivering channel. Often used to reflect the opinion of the people in news shows and sports. 

End of an Era

It is the year 2016, June to be precise. The news breaks that Microsoft is buying LinkedIn. This network had already moved away from a lot of social network features. The ‘Events’ and ‘Answers’ sections where closed, the embedded Twitter integration removed, and the APIs where very limited, preventing data flowing through 3rd party networks and systems. You could say that LinkedIn had already turned into a semi-social more closed database of contacts and user generated news. Although it is not clear yet how Microsoft wants to utilize LinkedIn after the acquisition, chances are that it will further loose it’s social aspects. Microsofts core business experience and business model are based on software licenses and not on retaining people on a social network. 

Not too long after Verizon acquired Yahoo (another end to an era) news came out that Twitter is looking for a partner that can acquire the network. The hey-days of Twitter have been over for some time already as the network never could maintain the speed of growth of it’s first years. A hardly further growing user base, combined with the inability to develop a profitable business model always meant that a turning point would arrive in the not too distant future. All potential buyers, Google, SalesForce and Disney, have decided not to move forward. Probably because their profitability is not good enough, which caused them now to cut costs by divesting their video-site Vine and cutting 9% of their workforce. 

We don’t know what the future of Twitter is yet, after a takeover, but chances are small that it will play a significant role anymore as social network.

Facebook Monopoly

So who are the survivors? Of course Facebook itself. Not only has this network been able to build a profitable business model. It also maintains its user-growth ratio, while still offering the value to its network-members to keep them on the network and maintaining their relationships with friends, families, colleagues and old school mates. 

Facebook's achievements are remarkable in many ways. Facebook has over 1.6 billion members today. Up 600 Million since it went public on the stock exchange. Both revenue and profit show a healthy and steady growth, fueled by further improved advertising capabilities and an increased reach among target groups that is hard to match nowadays by any other medium. Including television and radio. After a rough start, Mark Zuckerberg choose the right directions for investments, and lead a successful transition for Facebook from desktop-first to mobile-first experience. 

Facebook also acquired WhatsApp and successfully developed Facebook Messenger. With that it ensured a major market share in what seems to be the new way of 1:1 and 1:many communications. Facebook Messenger is even developing now into a platform that makes more and more starting companies decide to build their mobile app functionality within the messenger platform. With that, avoiding to have to develop a complete mobile app themselves and that for different mobile platforms. 

Finally, Facebook bought the only network that shows a very good growth rate: Instagram. Combined: Facebook, Instagram, WhatsApp and Facebook Messenger totally dominate the social space. The followers like Snapchat, Twitter or LinkedIn are so far away, that it is save to say that the social networking space has evolved the last decade in a complete Facebook monopoly. 

What does this mean for users and businesses?

You don’t have to be a rocket scientist to see that Facebook is here-to-stay as the leading party for at least the next few years, maybe even the next decade. New networks and messengers will arrive and challenge the status quo, and that is good. But across the board, both users and businesses only need to remember one word when they are thinking of joining a social network or reaching target groups with advertising and content: Facebook (including Instagram, Facebook messenger and WhatsApp). Forget the rest. 

PS: keep an eye on Facebook’s search capability. It is probably the only one at this moment that could be a threat to Google. The biggest difference: Google only knows what we want to find. Facebook knows what we like, how we feel, who we know and where we live. 

BLOG: About Chess, Tesla’s and Moore’s Law

In the news this week an item about the AlphaGo software beating South Korean player Lee Sedol 4 out of 5 times in a game named GO. That same week I read about the nearing end of Moore’s Law in The Economist. So how are these two related? And what will eventually be the impact on our business?

Let’s start with Intel co-founder Gordon Moore, who claimed in November 1971 that the

processing power of a computer chip would double roughly every two years. And how right he was. For over 44 years his Law stood firm and dictated the rhythm of the industry. The first ever microprocessor in 1971 held 2,300 transistors (electrical switches that can be turned on and off, representing the 0’s and 1’s of digital language). The 2014 Intel Xeon Haswell chip holds 5 billion.

It is difficult to grasp the full impact of Moore's Law. But think of this. In 1997 the US government needed a super computer to maintain its nuclear arsenal. It was named ASCI Red of which one customer made copy was built by IBM. It had the size of half a tennis court and was capable of 1.3 trillion calculations per second. In 2006 Sony presented the PlayStation 3. This machine doubled the speed of the ASCI Red, weighed 5 kg, could fit in a bag and was sold over 65 million times worldwide. Now that is the impact of Moore’s Law!

About Chess, Rice and Tesla's

Us human beings have difficulty understanding exponential growth. But an old parable might be the best story telling option to get to grips with it. Centuries ago an advisor created the game of Chess for his king. When asked what he wanted as a reward, the advisor asked for one grain of rice on the first section of the Chess-board, two on the second, four on the third and so on, doubling the amount every next section. The king laughed and said that he must be joking, and if he didn’t want anything else?
When the counting started only halfway the chess-board, the numbers where very large, but on the second half they were just vastly larger.

Only halfway, on the 32nd section, the king had to deliver 2.147 Billion grains of rice. And

remember, the 33rd section, this amount would double. To cut a long story short: more rice had to be delivered than was produced all over the world for years. The King learned the power of exponential growth (I wonder what happened to the advisor).

This is exactly what happened with computing-power since 1971. Imagine that the computing-power that allowed all Tesla Model S cars to drive themselves since October 2015, will have doubled in October 2017. And all robots that already are replacing work formerly done by humans, will have doubled their processing-power in two years time. And again two years later.

Through exponential growth, what sounded like science fiction a couple of years ago, now has become reality.

The End of Moore's Law

But, according to The Economist, we are approaching the end of Moore’s Law, as the
shrinking of transistors on a microchip is nearing it’s physical limits (the size of an atom). Intel admitted end of 2015 that the investments in R&D, needed to make chips quicker, have started to outpace the increase in speed that resulted from those investments. So chips will still continue to get better, but at a gradually slowing pace.

Two things are happening in parallel and/or in response to that. The first is an increased power to the big cloud-computing companies like Amazon, Google, Alibaba and Tencent. They are improving their cloud infrastructure and will be able to increase their offered computing-power the coming years by combining every single processor of all servers in their global datacenters. With ‘cloud’ we mostly think about storage, like Google Drive or Dropbox. But Cloud-computing offers especially computing-power to customers. Power that is far larger than one could get of a stand alone PC or server.


Artificial Intelligence and Deep Learning

The second movement is not about speed but about intelligence. This brings us to the
other news story last week: the AlphaGo software, built by Google-acquired startup ‘DeepMind', beat the best human player in the game of Go. GO is an ancient game that looks deceptively simple, yet is the most complex game to be solved by a computer, as it has an unpronounceable number of scenario's: 10 to the power of 80. Plus: it is rather a game of intuition than rational strategies.

This game can only be won by a computer when Artificial Intelligence (AI) is involved. Computer-learning, supported by hundreds of algorithms that learn and can copy instinctive moves from humans. This is called ‘Deep Learning’.
So if we have come to the point that computing-power (processing lots of data) combined with machine-learning algorithms (AI), the whole 44 years of Moore’s Law might turn out to be just a lightweight introduction to the real digital age.

The (business) game is on

These two examples, small news articles that you could easily miss, paint a picture of the business environment we have to operate in. The era where not only repeatable patterns are being automated and scaled in the cloud, but where intelligent predictive and prescriptive decision making and AI based consultancy will become part of our business life.

So what will this eventually mean for our rapidly changing world of work? What happens if even the Lee Sedols of this world can be automated? I have a hard time gathering my thoughts around that to be honest.