Wednesday, April 22, 2009

Are US social networks communist and Chinese ones capitalist?

It occurred to me the other day that on Facebook, it doesn't matter how much money you have. The service is free and taking advantage of all of its features is free too. In fact, it's quite difficult to tell who on Facebook is rich and who is poor; we are all equal citizens in the Facebook commune.

In the real world, it obviously does matter how much money you have. Moreover, it is easy to tell who is rich and who is poor. People send signals about their affluence from their clothes, cars, housing, and almost all the physical goods they consume. Facebook, on the other hand offers almost no clues into your financial status because there is almost nothing to consume.

While US social networks appear to have achieved a near Utopian existence, Chinese social networks are capitalist hotbeds. The Chinese social network Qzone earns nearly a billion dollars a year from the sale of virtual goods. On this social network, it matters how much money you have; the affluent can purchase more scarce virtual goods to decorate their profiles and the poor cannot. If you are poor in real world China, you are poor in social network China. How is that for communism?

Our experience on Facebook today may be the garden before the fall. As virtual goods offer perhaps the best way to monetize social networks, I imagine it will be tempting for Facebook to taste the (virtual) apple. If that happens, I think we'll look back on these early days of social networking fondly.

No comments: