Facebook actually has this power. Because it connects Facebook users to more than nine million apps and services through Facebook Connect, the Open Graph developer platform, and the hundreds of millions of like buttons that perforate Web pages across the Internet, the company can see what people are using. Facebook is more tapped into the pulse of people online than any company on the planet.
As a result, Facebook has the inside track to what is becoming more popular in a way that its many competitors do not.
A person close to Facebook, speaking on the condition of anonymity because this is a delicate subject as the company prepares for its initial stock offering, explained that “Facebook is now understanding the type of information it has about what is successful online, or what is a potential threat to Facebook.”
For example, the person said a number of the connections that occur through Facebook Connect, which allows people to port their identity from one service to another, allows Facebook to see the speed with which people are signing up for a new service. The same monitoring is applied to the type of content that is being sent to Facebook from other apps or sites.
When the company saw a staggering spike of Instagram photos flowing into Facebook, it knew it had to act quickly. It bought the photo service for $1 billion before Twitter or Google could make a move.
Facebook can also use its superpower to experiment with who wins and who loses online. This was evident on April 24 when Facebook started highlighting a number of apps, including Socialcam and Viddy, both new video-sharing services that had been growing modestly. Each had a few million users. Just one week after Facebook began highlighting these apps, Viddy and Socialcam had close to 20 million active users.
Michael Seibel, chief executive of Socialcam, said the Facebook changes had catapulted his company to one of the top 100 sites on the Internet. “Since then we’ve seen 10 times growth.”
“Facebook has so much power online that they have the ability to buy something at a low price and then make it go high by directing traffic accordingly,” said Jonathan Zittrain, a professor at Harvard Law School and a co-founder of the Berkman Center for Internet and Society. “Sociologically, this is called the Matthew effect, where the rich get richer and the poor get poorer.” (He notes that the term comes from a line in the Gospel of Matthew.) In other words, Facebook can create its future.
In a statement, the company said: “The popularity of videos and other user-generated content on Facebook is not new, so it’s no surprise that social video apps are growing as friends share with each other and as more developers experiment with this type of content on Facebook.”
Facebook may need to worry that competitors don’t see evidence that it uses its power unfairly. Eric Talley, a law professor at the University of California, Berkeley, said that although Facebook could be accused of market manipulation or anticompetitive practices, the company could defend itself by saying that others monitored the same data and that Facebook simply did the job better.
He said that Facebook might also have to worry that if it highlights content from companies it owns, it could face antitrust claims with the Doctrine of Tying. The federal government used this legal concept when it went after Microsoft for forcing its Web browser on customers who bought the Windows operating system.
One thing is certain. As Facebook grows more powerful, it will be reminded of the advice given to Spider-Man: “With great power comes great responsibility.”
Kimihiro Hoshino/Agence France-Presse — Getty Images Facebook is now connected to more than nine million Web sites and apps on the Interent.