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Web 2.0 Business Strategy: Comparing Facebook and MySpace Expansion Strategy

The Power of Emergent Organization

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Facebook and MySpace have distinct strategies for global expansion that hold crucial lessons for executives. Facebook is following a quintessentially Web 2.0 strategy while MySpace is pursuing a more traditional publishing model that most mature businesses will recognize.  The results, although somewhat preliminary, clearly show the relative advantages to Facebook’s approach, so here I’ll offer a brief description of the two and suggest learnings that you might apply to your business.

“Web 2.0” Business Strategy

Many elements of business strategy could be labelled “Web 2.0,” but for our purposes, I’ll focused on these five:

  • Empowerment—denotes the transition from a passive “consumer” attitude to a proactive “prosumer” role in which customers are active in producing and consuming something.
  • Experience-focus—products and services are mere props used by people to create experience; they are means to an end.  The Industrial Economy created wealth by mechanizing power to deliver more goods for less money, but customers are jaded and overproduction reigns, so the value is shifting to the experience of using a service or product to some end.
  • Crowdsourcing—issuing a request to a (usually) indiscriminate group of people (a “crowd”) rather than a trusted, exclusive group.
  • “Good enough”—perfection can be the enemy of the good, so Web 2.0 introduces an offer to market that is good enough to offer some value; its advantage is faster time to market and subsequent iteration with real customers.
  • Emergent organization—one of the defining characteristics of the Industrial Economy is (often) inflexible organization that is formed after careful study and changed reluctantly. Emergent organization is dynamic and coalesces spontaneously.

MySpace Global Expansion

myspaceMySpace and Facebook contrast clearly in their adoption of Web 2.0 strategy, specifically regarding global expansion.  Founded in 2003, MySpace began offering its site in other languages in April 2006, when it launched in Britain.  As the gorilla of online social networking, MySpace has chiefly monetized the engagement of its users through advertising, and its approach to global expansion is old school.  It conducts market research, sets up an office with for ad sales and operations, which include outreach with a focus on music and bands.  Thus its investment approach features fixed costs (research, staff).  It also strives to add content that the country will value. Current number of global sites: 29, many in beta

Facebook Global Expansion

facebook1.pngFacebook’s first non-U.S. site launched in February 2008, almost two years later than MySpace. But it created an online “translation” application for which users can register and begin to make Facebook available in their native language. This from the Translations Application welcome page:

Join our community of translators and make Facebook available in your language. Add the Translations Application to translate, review, and vote on translations in your language. Once the translations for your language are complete and their quality has been verified by the community, your language will be launched for all Facebook users.

In other words, Facebook members around the world are using a Facebook application to collaborate to launch Facebook “in their language.” The application has digitized good practices and business processes, but people self-organize, argue and work together to get it done. They vote and decide on the translations.

As of March 2009, Facebook is available in 40 languages, with 69 in the pipeline.

25,000 volunteers helped translate Facebook into Turkish last year, and there are now 9 million Turkish-language users signed up for Facebook (Global by Design)

Observations

  • MySpace and Facebook are “social” networks that aim to enable members to create relationships, interact, share content and other things. What better way than to allow people to help build the community?
  • Facebook is following a community strategy, which has key advantages:
    • Low fixed cost; minimal marginal cost to “launch” another country due to free labor
    • Minimal need for expensive (and possibly flawed) market research because of #1; let emergent organization vet which markets are most attractive
    • Excited, passionate translators feel a sense of ownership: “I helped make Facebook happen in our language”; that means a strong viral core and more stickiness, passion
    • Facebook therefore rates much higher than MySpace in empowerment and experience-focus; part of the experience is “bringing Facebook to our culture”
  • “Good enough” is often misunderstood by executives.  MySpace cannot afford to localize in as many countries as Facebook; even if its localized sites are better “out of the box” than Facebook’s (I’m not saying they are), does it really matter?  Here’s the trade-off:
    • More research and professional localization by MySpace are trying to increase relevance and interest and engagement. Professional localization should increase success
    • However, those things are means to an end, to increase engagement

Facebook, although the localized sites-via-crowdsourcing may be less perfect, the site was not made for them, it was made by them. Astronomical engagement points. When a site is up, Facebook can layer in “professional” resources to refine as needed.

Anatomy of a Reversal

Parting Shots

  • It’s close to universal that engagement increases significantly when people can work together to build something. That which they build becomes theirs. This is one of the most viral experiences in existence.
  • Ask yourself, “How could we engage a certain stakeholder group in this way?” Be actively looking for opportunities.
  • “Good enough.” If you want engagement, perfection is often less important than letting customers build it or give significant input.  It’s beautiful to them because it’s theirs.
  • And good enough need not always be a trade-off; I would wager that Facebook’s sites would have superior translation after two years, if not before, because they have a community of owners to want to protect their investment. MySpace is disincented to constantly evolve its sites because constant iteration represents a cost.
  • No discussion about scale!

Additional Reading

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