How To Value Social Networks?

Jemima Kiss makes a seemingly innocuous statement in a recent piece in the Guardian: Report: Social networks flourish - but still have to solve the targeted ads riddle:

The usefulness of social networking sites is proportionate to the number of users they have

I disagree, really. But it begs the question: how should we value social networks, if not based on population?

I maintain that we need to start with the individual: how does a single user value the service? Usefulness, or value, for any given individual is not increased after the point where one’s friends — or some larger group of contacts — are on the service.

Reed’s Law suggests that the value of a network increases with the number of groups that are formed in the network.

We need something more user-centric: group formation is a Web 1.0 principle, actually. In Web 2.0, the individual is the new group (as I said in my first post here at /Message in January 2006).

I believe the value of a network — in typical Web 2.0 fashion — is the sum of all the users’ perceptions of value: and that is not directly driven by the overall size of the population of other users.

Value may be indirectly linked to population. For example, most individuals find it very valuable that many of their contacts are using a given service. By extension, the service’s population will increase as those members join. However, if the system allows increased population to lead to increased annoyances — social spam, for example — then increased population can be seen as a negative.

So, it’s probably like urban design: the attractiveness (and value) of an urban area is not directly linked to population, or population density. It’s more a function of the mix of amenities, the design of public spaces, and the perception of safety. One city of 10 million may be beautiful and pleasant, while another may seem blighted and ugly.

In the world of social networks, its the social architecture that matters: what the system enables us to do, how it allows us to connect and to interact, and whether its public spaces feel cramped or hectic or unsafe really, really matters.

Its not the addition of population that increases the value of networks or cities, but the way we view, touch, or communicate with each other as we pass on the public spaces that these human hives provide us.