Nic Hodges has a thoughtful post up down under. Thanks to John Maloney for flagging it. Nic says,
“If Mark Zuckerberg turned up to your neighbourhood and started throwing you crazy block parties, while at the same time mining your backyard for gold, wouldn’t you want a cut of that gold?”
I agree with and have explored many of the same concepts Nic touches upon in his post.
I agree that social networks are not owned. But social network software services like Facebook are privately owned so there is a transaction: service for terms of service. A problem can emerge when companies like Google and Facebook and others are becoming so entrenched in social networks and our old watchdogs like government and journalists are not motivated or equipped to help us bring the implications into focus.
I believe that the most important thing that we can do to cope with these potential problems is to establish the link between social capital and corporate valuation, to motivate corporate competition, bring into light the true sources of value and make them accountable to investors, markets and users/consumers. Then the regulators and press gallery will be all over it.
Social networks can not be owned. Agreed. That is why I think it is very useful to distinguish social capital from social networks. I think social capital, i.e. the resources that are embedded in social networks are intrinsicly individual assets. (Note: the corporation is a form of individual).
By investing in a connection with you, I get flow of information, the exertion of influence, certifications of individual social credentials and reinforcement of individual identity and recognition. Hey! Smells like social media to me. That is why I think of social media as a new, scaled up form of social capital that has emerged since 2004 when broadband overtook slow connectivity in the USA.
Aggregation of individual returns result in collective assets and properties such as trust, norms, reputation, authority, sanctions, culture, network structure (open, closed, density, clustering, diameter, average path lengths, degree distribution, bridges, weak ties, betweenness and other forms of centrality, etc.) and location (structural holes, structural constraints, etc.), which are extrinsic variables that contribute to the formation, access and use of social capital.
This is the stuff that we need to zero in on developing, measuring and valuing at this point – not just page views, unique visitors, CPMs which are all broadcast paradigm metrics.
P.S. I love Michael’s comment over on Nic’s post, “We are all becoming Paris Hilton“.
Check out Lin, Nan, “Building a Network Theory of Social Capital” ©1999 INSA, Connections 22(1):28-51, see pp.28-31 for compact history of social capital.