November 2007


For my Digital PR class this summer, I wrote about the idea of “virtual insanity” and the strange ever changing online world. I’ve also blogged about Second Life and how this trend (well, trend would mean it’s somewhat temporary, but that’s another topic for debate…) has been on the rise lately.

And now, we’re reading Julian Dibbell’s Play Money which details Dibbell’s quest–and success–in becoming a millionaire by selling “virtual loot.” And I’ve got to say. . .this seems like BS to me.

Social networks, blogs, etc–that’s all one league of online behavior and habits that I enjoy and participate in. But the virtual communities and second identities seems beyond what my imagination can stretch to. Second Life and these virtual communities seem like outlets for people to escape their real lives and fantasize about an alternative identity for themselves. This all seems fine and dandy, but what about when it gets out of hand? There have been examples of rape and crime in Second Life–obviously people have taken their imaginations too far.

Dibbell has been able to make a living off of his virtual loot in second life. I agree with what John said on our Google Groups dialogue: “That being said, I think that virtual goods are a stupid idea. There is no reason anyone should pay cash for a free item (paying for entertainment is one thing, paying for non-existent items is beyondme). I dislike the idea of Microsoft points in the Xbox marketplace and I don’t like the idea of having to pay for second life dollars and real estate.”

The fact of the matter is, these virtual worlds aren’t real!!  It doesn’t seem entirely ethical to me to be making millions off of something that doesn’t even exist, and this is why I don’t agree with Dibbell’s business venture. It seems somewhat exploitative; on the other hand, however, people seem to be willing to buy their virtual loot online, even though it fails to actually exist.

What I have to say about this is simple: virtual communities foster some sense of togetherness, but once we go over the boundary of paying for these free good I think people have gone too far.  Go out and explore your real life! Don’t be so dependent on the computer screen and a fantasy world when there are real problems not only in the world but in your own life. I think the rising dependence on virtual communities is unhealthy for the overall online and real world communities.

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I’ve heard this phrase–the long tail–tossed around, and I never fully grasped what it meant until I started reading the first four chapters of Chris Anderson’s The Long Tail. The long tail basically refers to niche marketing and its importance in our current economy. Thanks to online companies like Netflix and Amazon that rival their store-only competitors (well, what started out as store only), these online giants have perfected the idea that people can customize their profiles and have their choices actually come to them rather than seeking out movies, books, etc.

I loved the way Anderson opened his book with the example of the mountain climbing book. A twenty year old book has been given a second chance thanks to generous online distribution, niche choices, personalized suggestions, and its presence on the long tail. Amazon turned the book into a best seller by coupling it with a similar selection. Like this book? Try this one, too. It works. And so does the long tail.

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In a world where virtually everything–information, books, knowledge–is easily accessible, the long tail demonstrates that niche marketing and consumption is as important as ever. Everything around us is personalized now–from our Google homepages to our Nike shoes to the engraving on the back of our colorful iPods. Most of the websites I use every day require some kind of log in information, and continue to provide me with choices that will be of interest to me.

The long tail is important because we’ve come not only to expect a vast selection of choices but to demand it. It’s frustrating to go into a store and be turned away because the selection you want isn’t in there…and it’s so easy to log in to your Amazon account and find not only what you’re looking for, but also a few more options you didn’t even know pertained to your interests.

What’s popular in our culture (iTunes Top 10 Songs, and so on) will continue to attract the majority of people, but after a certain point the choices taper off. Those choices to the right of the graph–away from the head and defining the tail–contain niche fragments. Consumers can belong to different parts of these niches. The overload of information and the sheer volume of choice makes these niches absolutely essential to our lives as consumers and online users.

Amazon and Netflix both started out with overwhelming choices, personalization, and customization. Others such as BN.com–which started as physical stores and later tapped into the online world–have followed suit with more selections offered online than in the stores. Blockbuster succumbed to the pressure of Netflix by offering their own expanded online mail services for movies.

I’m all for the long tail and niche marketing, but I can’t help but wonder what will happen as more companies adapt a bigger inventory in an effort to customize and personalize the selections for their customers. Netflix and Amazon have been so successful because they were the pioneers of this new type of economy. I am interested to see what will happen as this slowly becomes the norm, and the tail might taper off for the big guys so that the newcomers can participate in the long tail.

I read Wikinomics for a class this summer, but this time around I couldn’t help but think of Facebook’s new applications. Earlier this year, Facebook opened up their website so that people and companies could add applications and users could add them to their profiles.

I find the influx of Facebook applications and their popularity to be absolutely amazing. Facebook was already popular as it was–in a way, it was a giant collaborative effort where every member had their own profile, participated in groups, and had multiple networks of friends, family, classmates, and colleagues. But what Facebook had obviously wasn’t enough. The Facebook Applications show the need for more–more interaction, more collaboration, and having some kind of impact on the wikinomony (wiki+economy). In August alone, over 14 million users used the various Facebook applications.

14 million users…but how successful has it actually been? A closer look at the long tail shows that a very small number of Facebook’s applications have even been successful. Regardless of this fact, however, stands the notion that the very idea of Facebook third party applications are necessary to keep Facebook alive amidst the sea of Wikinomics.

Tapscott and Williams rightfully argue in Wikinomics that the “heart of MySpace is the personalized profile. Members fill them with interests, tastes, and values, supplemented by music, photos, and video clips that make their profiles even more appealing.” (p. 29) Facebook went from having more static pages with fairly basic questions to adopting the MySpace way of social networking. Customizing facebook pages with the third party applications is where the bar is, and Facebook sought to surpass it.

I think that Facebook’s pursuit of the third party applications is exactly what has brought its value up over the past six months. In September of 2007, Microsoft bought out 1.6% of Facebook for $240 million, meaning the actual price of Facebook is billions of dollars. Had Facebook remained the way it was–sans third party applications–I doubt their numbers would be able to go that high.

Wikinomics stresses that collaboration is happening not only on a social or social networking level, but more importantly on an economic level. The four basic ideas of Wikinomics–peering, sharing, openness, and acting globally–are all evident in Facebook and its new applications. Non-Facebook third party application developers are the very essence of crowdsourcing and mass collaboration.

So what does this mean for the future of Facebook? Wikinomics is the name of the game, and Facebook has to continue to allow Facebook applications to enter their space. But when is too many Facebook aplications simply. . .too much? There is already an overload and the long tail has already made itself noticeable. Facebook must stay on top of mass collaboration to stay ahead of their competitors and thrive in the market.