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On why social networks interoperate… and why not

Thursday, 11 November 2010 20:42 Written by  Guillermo Ramhorst

I came across an interesting analysis about why a social network would open itself to interoperate with other networks… and why not.

As Buth Bebo mentions, 

The economic logic behind these positions is a straightforward application of Metcalf’s law, which states that the value of a network is the square of the number of nodes in the network*.  A corollary to Metcalf’s law is that when two networks connect or interoperate the smaller network benefits more than the larger network does. If network A has 10 users then according to Metcalf’s law its “value” is 100 (10*10).   If network B has 20 users than it’s value is 400 (20*20). If they interoperate, network A gains 400 in value but network B only gains 100 in value. Interoperating is generally good for end users, but assuming the two networks are directly competitive – one’s gain is the other’s loss – the larger network loses.

I liked this analysis as for what would happen if Google Me becomes a success…

 

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