Is Brian Joffe as good a seller as a buyer?

New tech­nolo­gies meet old brains

Finweek English Edition - - FRONT PAGE - SI­MON DIN­GLE

THE STUDY OF so­cial net­works goes back to the 1800s. And it’s worth men­tion­ing that be­cause the fun­da­men­tals haven’t changed much. Com­mu­ni­ca­tions are now much eas­ier and we’re able to speak to a mul­ti­tude of peo­ple glob­ally in mil­lisec­onds. But we’re still peo­ple with brains who haven’t come very far over the past cou­ple of cen­turies.

It’s fas­ci­nat­ing to see how cut­ting edge so­cial net­work­ing tools are still sub­ject to the con­straints of our mon­key brains. For ex­am­ple, stud­ies have re­vealed the max­i­mum size for so­cial groups of hu­man be­ings is around 150: more for some peo­ple, less for oth­ers. That ca­pac­ity – re­ferred to as “Dun­bar’s num­ber,” af­ter Robin Dun­bar, the an­thro­pol­o­gist who first stud­ied it – is hard­wired into our neo-cor­tex re­gions af­ter mil­len­nia of evo­lu­tion. And that holds true whether you’re talk­ing about a Stoneage ru­ral vil­lage or Twit­ter. We just can’t work in or­gan­i­sa­tional groups larger than that.

So as we look back on the rise of Web 2.0 and so­cial net­works such as Face­book, LinkedIn and Twit­ter it’s use­ful to re­mem­ber the dy­nam­ics haven’t changed much. We have new tools to com­mu­ni­cate with but we’re still peo­ple – used to build­ing our so­cial net­works around camp­fires and, more re­cently, of­fice cock­tail par­ties.

The In­ter­net is, of course, a com­mu­ni­ca­tions tool. That’s what it was de­signed for by the United States mil­i­tary. So the tech­nol­ogy we’re talk­ing about is also rather old. How­ever, it hasn’t al­ways been very easy to use – and that’s the fun­da­men­tal dif­fer­ence be­tween early net­works and their more mod­ern equiv­a­lents. The early days of the World Wide Web – in­vented in 1989 – were very much a one-way street; you re­ceived in­for­ma­tion into it if you had the tech­no­log­i­cal know-how, but most peo­ple were only able to send in­for­ma­tion out.

The trans­for­ma­tion of the Web in the 21st cen­tury from an in­for­ma­tion por­tal to an in­for­ma­tion plat­form that just about any­one can up­load con­tent to, changed ev­ery­thing. This fun­da­men­tal trans­for­ma­tion was coined ‘Web 2.0’ by Ir­ish jour­nal­ist and pub­lisher Tim O’Reilly.

In the pre-Web 2.0 days, peo­ple com­mu­ni­cated us­ing email and other di­rect sys­tems. Nerds, how­ever, were able to do so much more us­ing In­ter­net re­lay chat (IRC) and bul­letin board sys­tems.

The orig­i­nal bul­letin boards (BBS) were run more as a hobby than any­thing else. En­thu­si­asts would host the BBS soft­ware on a com­puter and oth­ers would dial into it us­ing their modems. Once con­nected, users could read news, up­load or down­load soft­ware and other con­tent and in­ter­act with other users of the BBS sys­tem.

There is an ar­gu­ment to be made for bul­letin boards and mod­ern so­cial net­works – which are pretty much the same thing as far as I’m con­cerned. It’s a cen­tral point where a group of peo­ple can up­load in­for­ma­tion to share with oth­ers. The only dif­fer­ence be­tween early bul­letin boards and Face­book is the bar­rier to en­try – and, of course, the sup­port for more mod­ern tech­nolo­gies like video chat­ting. Friend – or buddy – lists also weren’t much of a concern to early on­line so­cial net­work­ers, as there were very few se­crets to be kept; users gen­er­ally shared ev­ery­thing with ev­ery­one.

The first, mass-mar­ket Web 2.0 so­cial net­work­ing plat­form was Mys­pace, es­tab­lished in 2003 and en­joy­ing a hey­day from 2007 to 2008. It was the be­gin­ning of some­thing new. A place that any­body could ac­cess and use to ar­range groups of con­nec­tions. News mogul Ru­pert

Mur­doch saw the next big thing emerg­ing and bought Mys­pace for US$580m – one of the worst in­vest­ments he ever made.

Things changed fast. Face­book, es­tab­lished in 2004, be­gan to take hold of the mar­ket when it was opened up for any­one to use in 2006. Twit­ter was es­tab­lished in 2007 and be­gan to grow in pop­u­lar­ity with so­cial net­work­ing afi­ciona­dos.

Skip ahead three years and Mys­pace was sold last month to Spe­cific Me­dia and pop star Justin Tim­ber­lake for a pal­try $35m. Face­book is the new king of the so­cial jun­gle – for now.

This year also saw the first ma­jor so­cial net­work IPO, with LinkedIn list­ing on the New York Stock Ex­change. It dou­bled its share price in the first day of trad­ing and had quadru­pled it by the close of the sec­ond day. Many who re­mem­ber the dot­com bub­ble burst of 2000 be­lieve they’ve seen that all be­fore. And Face­book is ex­pected to list next year.

RU­PERT MUR­DOCH (be­low) Bought Mys­pace for US$580m JUSTIN TIM­BER­LAKE Mys­pace sold last month to Spe­cific Me­dia and the pop star for a pal­try $35m

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