By Mira Vogel, on 27 October 2014
Q: What would happen if Facebook worked like Blackboard?
A: Every 15 weeks Facebook would delete all your photos and status updates and unfriend all your friends.
So here’s bit of a comparison of four social networking services Facebook, Google+ and two upstarts Ello and Tsu – far from the only alternatives, but four of a kind. As a comparison it’s pretty one-dimensional because rather than what the services allow members to do I’m focussing on the preliminary but fundamental matter of how they turn a profit, pieced together from a quick scan of articles.
All are venture capital funded and consequently they either rely on member subscriptions or they commoditise their members by putting pricetags on their biographical data, shares and relationships. In the latter case they depend on members to befriend and be befriended, follow and be followed, feed news and be fed news. Google+ is Google’s answer to Facebook. Facebook probably needs no introduction, and rumours of its death may or may not be exaggerated. At any rate there is currently a disaffection with advert-saturated intrusive business models where members generate profitable content and everybody but the members seems to profit. Ello and Tsu are two such responses. So how do they compare?
Ello is set to become one of a small number of public benefit corporations in the US – this broadly relates to who owns the assets, how much profit is reinvested in the company, and constraints on the future direction of the company. Ello managed to raise more venture capital investment than usual for this type of business. Its freemium service offers members a basic service for free and charges for advanced features – Ello founders point out that this is basically the successful iPhone app business model, except there’s no need to buy anything at all. Ello don’t mine members’ data.
Tsu calls itself a “combined social network and payment platform”, and members can share from it to Facebook and Twitter. Tsu revenue comes from page views (so favours members who post lots, find lots of new members, and have lots of friends sharing their posts), but members keep a stake in their data and “therefore they own the royalties generated from advertising, sponsorship and partnership dollars wrapped around their content”. Data here includes a member’s network – a portion of the revenue goes to the person who invites a member to Tsu – this ‘parent’ is in line for a kind of finder’s fee every time the member gets a payout, as is their parent, their parent’s parent, in diminishing fractional payouts. There are questions about motivation to join in and share, and the revenue-sharing processes are said to be rather complicated for the average punter – but they are the main innovation.
Facebook uses member data to personalise and target advertising to them. It also has its members advertise to each other by default. It has a real name policy – one account per member, using their own name. For some time there have been privacy concerns about Facebook, such as Instant Personalization which shared members’ demographic data with selected commercial partners. At the same time, for those whose networks are already established in Facebook there tends to be profound inertia about migrating elsewhere. In 2013 a Facebook user was reportedly (methods subject to debate) worth $98, and a Facebook Like, $174.
Google is an advertising company which seeks to collect user data over time in order to refine its contextual advertising algorithm. To do this, Google wants you to log into one or other of its services. Some have commented that Google+ is less a social network and more a demographic research tool – for some time you only had to be logged into, for example, Android, or gmail, or Chrome, or YouTube) to be passively using Google+, with resulting privacy concerns. Google+ recently eased up on pressurising users into the service, abandoned its real name policy, and stopped requiring a Google+ account to use Google Hangouts. It’s currently hard to work out its business model, and this has led some to question its future.
On screen advertising
Facebook depends on its members’ profile and user data to serve demographically-targeted adverts to its members which appear throughout the site. Its terms require members to use one account in their own name and be truthful in their profile. Because members use Facebook to socialise rather than view content, it has a relatively low rate of clicks on the adverts it serves but its sheer numbers of members compensates for this. Contextual advertising is also Google’s line – although Google+ doesn’t itself currently have on-screen ads, they aren’t ruled out and in any case there are ads on Google Search and other Google services. Ello‘s charter [PDF] commits it to be free of “paid advertising on behalf of a third party” and it doesn’t mind what you put in your profile. Tsu has advertising.
What’s at stake?
There has been a recent spate of class actions against intrusive, exploitative practices by social media companies with advertising-driven business models – not least this humungous one – and these are meeting with some success. Concerns about algorithmic manipulation were popularised by Eli Pariser in his 2012 book The Filter Bubble, and are a major theme in technology commentary – see for example Zeynep Tufeksi on Twitter’s roll-out of algorithmic curation. The problem (which is particularly antithetical to academia) is that algorithms opaquely serve members things they are calculated to like, and people tend to prefer agreeable or affirming stuff over challenging or troublesome stuff (you won’t be surprised to learn there are algorithmic answers to that; there are also alternatives such as Pariser’s Upworthy which piggy backs on other algorithms, although that’s a balancing act). The question is the same one people are asking about learning analytics: is the algorithm secret and commercially sensitive or is it available for scrutiny? It’s very early days for Ello – it is currently nowhere near as lubricated as the leading social networks in terms of sharing between networks, for example, but Ello’s is the only business model where members will explicitly not be subjected to data manipulation. Some commentators urge a more dispersed form of social networking – for example the POSSE, or ‘Publish (on your) Own Site, Syndicate Elsewhere’ approach allows members to share posts from one place (here, their own) to many other places.
Are any of these things a factor in your choice of social network? Perhaps not. Feel free to poke holes. On Facebook privacy see this snappy guidance from Sally Burr at the University of Sussex. Finally, how to join. With Tsu you need to be invited – it’s very easy to get invited but given the money involved I’m not going to recommend any one or other Tsu parent, so search for somebody you’re happy to generate revenue for. At this stage with Ello you also have to be invited, but you can request an invitation from its homepage. You can join the million-plus waiting list, or look out for somebody to invite you. Google+ and Facebook are open to anyone over 13.
*Image source: Facebook forces drag queens and trans people to use “real names” – marked by Google Image Search as ‘Labeled for reuse with modification’.
HT Natasa Perovic and Niv Setru for some of the links