Network Effects Predict the Future of Facebook

Facebook stands alone in the depth and variety of network effects they’ve built, even though most go undetected. As a result, their defensibility is unparalleled.

Facebook represents a completely new type of media company. All media companies that came before — newspaper, radio, and television companies — were one-to-many, two-sided marketplaces with much weaker network effects. They were also less capable of building more network effects and other forms of defensibility on top of their existing products.

Simply put, we don’t believe the world has ever seen a network effect media company that equals Facebook’s defensibility and size. And it’s clear that both Facebook leadership and the rest of the world are just beginning to grapple with what that might mean for society.

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