A big problem investors and pundits have with companies like Google, Microsoft and Apple is that they are seemingly incapable of creating a successful social network, despite being successful in many other areas of the software world. Something they don’t consider, though, is that the reason these companies are historically successful is the same reason that is keeping them from being successful with social networks.
Look at the traditional model of software publishing. A company like Apple would create a home run product like GarageBand. Apple then has two options. On the one hand, it can publish GarageBand on as many platforms as possible to maximize its reach. On the other hand, it can keep GarageBand exclusive to OS X, thereby giving Apple an incredible advantage over competing platforms. Of course, Apple chooses to leverage it to increase the value of OS X.
Similarly, look at Microsoft. They are working on a version of Microsoft Office for tablets, but apparently have no plans to release it for the iPad or iPhone. Why? Because having Office be a platform-specific product is an incredibly valuable selling point for Windows, and will likely sell many tablets and PC’s.
Contrast this model of software publishing with the strategy of social networks. You have services like Facebook and Twitter pushing a cross-platform model, with the service available everywhere. iOS apps? Check. Android? Check. Windows Phone? Check. Web? Double check. This gives these services an incredible reach, allowing friends to interact with each other regardless of operating system.
As a side note – as someone will bring it up – I should address the issue of Google+. Google appears to be being open with Google+, so why aren’t they winning the social wars? The reason for this specific failure is that they are not adding significant value to the user experience (however much Scoble may think Hangouts are awesome). This is the second hurdle a company needs to overcome to run a successful social network. Apple has had no problem with this issue, by adding value with GameCenter and Find Friends. Google, though, is not adding value, and despite being open is not seeing success.
While these may seem like insignificant – and immaterial – comparisons, understanding the difference in strategies is critical to understanding the inability of companies like Apple, Microsoft and Google to create successful social networks.
On the one hand, you have the old-school strategy that states that exclusivity is the best way to boost the value of a platform. On the other hand, you have the new-school strategy which states that cross-platform compatibility is critical to the success of a social network, and really any web service.
This conflict is the central reason explaining why older companies like Apple have been unsuccessful at creating a social network. Apple hasn’t pursued a cross-platform model, and instead forced users to interact with Ping on a specific platform and inside of a specific application. This is Apple trying to use a 20-year old model of software publishing, on a 10-year old idea. Inherently, they are incompatible.
These makeshift adaptations for the social networking age won’t work. Why? The answer is simple: people want to be on the same network as their friends, and they can’t be if their friends are locked onto a specific platform. It doesn’t work in the end, because not everyone is going to be on the same hardware, and not everyone is going to be on the same platform.
In the end, the two strategies cannot coexist. You cannot have a social network be a feature product, and at the same time force lock-in. On top of that, you cannot have the strategy of lock-in for all services and products, and expect them to be as popular as you want them to be. It’s one or the other.