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It's Time For Services on The Web to Compete On More Than Data

By - January 04, 2008

The recent kerscobuffle around data portability got me thinking out loud about what the value of a social network really is – and by extension, any service that might claim to have “lock in” around our personal data.

For years now, a core (unresolved) issue in the Web 2 world has been data portability – with most of us – including me – arguing vaguely for the right to take our data where we want, when we want, without undue interference from the service that helped us aggregate it.

As the debate deepens, it seems there are two camps – first, the camp that says Facebook has either A. a right and/or B. an economic necessity to create a walled garden for our data. The second camp argues that Facebook – and any other walled garden – is A. Stupid or B. Greedy or C. Both.

I think I’ve been pretty consistent in my support of the less-than-nuanced second group of campers.

But I’m not entirely sure the debate is framed correctly. It assumes the key question is about whether or not the data can be ported. Instead the real value creation of a service is what that service allows a person to *do* with that data, once it’s found its way there.

To frame the discussion, think about the idea of competing on the lowest price. This has always been a major point of pain in retail commerce – how can I compete on price if my costs of goods sold is the same (or, shudder, *higher*) than my competitors? My answer is to change the game: Don’t compete on price. Compete on *service*.

An example. My local market charges far more for a good bottle of wine than many shops that are nearby. But there’s a wine guy who works at that market who knows wine cold, and who I trust. Also, the market is close to my home, and I have a personal relationship with the fellow (OK, here’s the reference to the book I’m working on – I have a “conversation” going with this merchant). Those factors, combined with a certain ambiance at the store that I really like, all lead to one result: I buy my wine at the more expensive store. Why? Because the store competes on more than price.

It’s time that services on the web compete on more than just the data they aggregate.

I think the data portability crowd is driven by this idea, in the main – once we have real data portability, personal data becomes a commodity, and services then live or die not on data lock in, but on *service* lock in. Imagine a world where my identity and my social graph is truly *mine*, and is represented in a machine readable manner. Were that the case, the entrepreneurial opportunities to create second order value are immense.

Is this the goal of Open Social? I’m not sure. Danny has pointed out how Google is of two mouths when it comes to the idea.

The problem is, no one seems ready to truly set the social graph free. Till now.

With one move, Facebook can change the face (sorry) of this debate by making it falling-down easy to export your social graph. And I predict that it will.

Why? Because I think in the end, Facebook will win based on the services it provides for that data. Set the data free, and it will come back to roost wherever it’s best used. And if Facebook doesn’t win that race, well, it’ll lose over time anyway. Such a move is entirely in line with the company’s nascent philosophy, and would be a massively popular move within the ouroborosphere (my name for all things Techmeme).

Compete on service, Facebook, it’s where the world is headed anyway!


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9 thoughts on “It's Time For Services on The Web to Compete On More Than Data

  1. dan blumberg says:

    your book the Search is great. also i am impresesed with your 2.0 interviews.
    facebook is off to a great start. how they handle privacy and advertising will certainly play a key role in their future.

  2. Chris Saad says:

    John – I’m glad to see we are on the same page. You are welcome to joint he DataPortbaility Workgroup if you like – just drop me a line.

    Cheers,

    Chris

  3. Bobby Kelly says:

    Sure, data portability is very useful to us and we all want it. But at this point there is no competing services prompting Facebook to offer that portability. In many markets no other social network has reached that critical mass to make them a true competitor. So at this point they would be shooting themselves in the foot and daring people to seek other services by offering up that lovely feature.

    I agree that they will open up eventually, but it’s not going to be from pressure from Scoble and other data-toting-savvy-peeps. It will be because of pressure from comptitors, and it will probably only happen once Facebook has the unique service(s) that make people crave it nightly over all other similar sites…and that day being before most of us would think.

    There is not enough people trying to climb over the walls of this garden. Not much on the other side…as of yet.
    This will change soon.

  4. blumberg says:

    the google storey and the Search i believe are key books on internet development.
    Next book(s)?:
    -the rise of socal networks. profile info and advertising revenue.
    -platforms, applications and facebook.
    -open social vs. facebook.
    -cell phone internet access and china, india.

  5. Isn’t this the direction that Microsoft is going with some of their services

    They are mixing Software as Service with Client synchronization in response to the Google challenge.

    But the concern with some Web 2.0 sites are pageviews or return visits.

    The more dependent you are on their site to access your data, the more views it will have for their necessary advertisers who are subsidizing your free or reduced-price access to these services.

  6. Dan Blank says:

    Interesting thoughts on this… I can’t help but liken it to the removal of DRM on music and movies. When companies learn to trust their customers, it does indeed become a more evolved relationship.

    When companies act like parents, always wary of what their kids will do, and justifying rules to control them… the kids may realize they can just run away from home and live with someone else.

    If Facebook is so afraid that if you let someone leave, that they will, then they need to take a serious look at what the value of their service is.

    Have a great day.
    -Dan

  7. Randall Newton says:

    This portability thing must not be so easy to execute. New networking site Spock keeps offering to check my contacts at Gmail, LinkedIn, Plaxo, etc. but the tool never works.

  8. John White says:

    I completely agree about the DRM thing. It would be wonderful if the music industry could trust us!

    That’s why trust is so important in business, for tips to help my customers trust me I am a frequent reader of James D. Brausch’s blog!

  9. Śmieszne filmy says:

    Hi, he more dependent you are on their site to access your data, the more views it will have for their necessary advertisers who are subsidizing your free or reduced-price access to these services.
    śmieszne