A couple of years ago, I wrote a blog post entitled Social Software: Finding Beauty in Walled Gardens where I riffed on the benefits of being able to tell the software applications you use regularly "here are the people I know, these are the ones I trust, etc". At the time I assumed that it would be one of the big Web companies such as Google, Yahoo!, or Microsoft that would build the killer social software platform that was powered by this unified view of your social connections. I was wrong. Facebook has beaten everyone to doing it first. There are a lot of user scenarios on the Web that can be improved if the applications we were using know who our friends, family and co-workers were knew without us having to explicitly tell them. Below are a couple of online services where access to a user's social network has made Facebook better at performing certain Web tasks than the traditional market leaders. 

NOTE: This started off as three different blog posts in my writing queue but after reading ridiculous overhype like ex-Google employees publicly decamping from their former employer because 'Facebook is the Google of yesterday, the Microsoft of long ago' I decided to scale back my writing about the service and merge all my thoughts into a single post. 

Displacing Email for Personal Communication

Gervase Markham, an employee of the Mozilla Foundation, recently wrote in his blog post entitled The Proprietarisation of Email

However, I also think we need to be aware of current attempts to make email closed and proprietary.

What am I talking about, I hear you ask? No-one's resurrected the idea of a spam-free email walled garden recently. Companies who tout their own secure mail protocols come and go and no-one notes their passing. The volume of legitimate email sent continues to grow. What's the worry?

I'm talking about the messaging systems built into sites like Facebook and LinkedIn. On several occasions recently, friends have chosen to get back in touch with me via one of these rather than by email. Another friend recently finished a conversation with a third party by saying "Facebook me"; when I asked her why she didn't just use email, she said "Oh, Facebook is so much easier".

And she's right. There's no spam, no risk of viruses or phishing, and you have a ready-made address book that you don't have to maintain. You can even do common mass email types like "Everyone, come to this event" using a much richer interface. Or other people can see what you say if you "write on their wall". In that light, the facts that the compose interface sucks even more than normal webmail, and that you don't have export access to a store of your own messages, don't seem quite so important.

After I read this post, I reflected on my casual use of the user to user messaging feature on Facebook and realized that even though I've only used it a handful of times, I've used it to communicate with friends and family a lot more than I have used either of my personal email addresses in the past three months. In fact, there are a bunch of friends and family whose email addresses I don't know that I've only communicated with online through Facebook. That's pretty wild. The fact that I don't get spam or random messages from people I don't know is also a nice plus and something a lot of other social network sites could learn from.

So one consequence of Facebook being used heavily by people in my real-life social network is that it is now more likely to be my interface for communicating with people I know personally than email. I suspect that if they ever add an instant messaging component to the site, it could significantly change the demographics of the top instant messaging applications.

Changing the Nature of Software Discovery and Distribution

I wrote about this yesterday in my post Marc Andreessen: The GoDaddy 2.0 Business Model but I think the ramifications of this are significant enough that it bears repeating. The viral software distribution model is probably one of the biggest innovations in the Facebook platform. Whenever my friends add an application to their dashboard I get a message in my news feed informing with a link to try out the application. I've tried out a couple of applications this way and it seems like a very novel and viral way to distribute applications. For one thing, it definitely a better way to discover new Facebook applications than browsing the application directory. Secondly, it also means that the best software is found a lot more quickly. The iLike folks have a blog post entitled Holy cow... 6mm users and growing 300k/day! they show a graph that indicates that iLike on Facebook has grown faster in its first few weeks than a number of popular services that grew quite quickly in their day including Skype, Hotmail, Kazaa and ICQ. 6 million new users in less than a month? 300,000 new users a day? Wow.

Although there are a number of issues to work out before transferring this idea to other contexts, I believe that this is a very compelling to approach how new software is discovered and distributed.  I would love it if I my friends and family got a notification whenever I discovered a useful Firefox add-on or a great Sidebar gadget and vice versa. I wouldn't be surprised if this concept starts showing up in other places very soon.  

Facebook Marketplace: A Craigslist Killer

Recently my former apartment was put up for rent after I broke the lease as part of the process of moving into a house. I had assumed that it would be listed in the local paper and apartment finding sites like Apartments.com. However I was surprised to find out from the property manager that they only listed apartments on Craig's List because it wasn't worth it to list anywhere else anymore. It seemed that somewhere along the line, the critical mass of apartment hunters had moved to using Craig's List for finding apartments instead of the local paper.

Since then I've used Craig's List and I was very dissatisfied with the experience. Besides the prehistoric user interface, I had to kiss a lot of frogs before finding a prince. I called about a ten people based on their listing and could only reach about half of them. Of those one person said he'd call back and didn't, another said he'd deliver to my place and then switched off his phone after I called to ask why he was late (eventually never showed) while yet another promised to show up then called back to cancel because his wife didn't want him leaving the house on a weekend. I guess it should be unsurprising how untrustworthy and flaky a bunch of the people listing goods and services for sale on Craig's List are since it doesn't cost anything to create a listing.

Now imagine if I could get goods and services only from people I know, people they know or from a somewhat trusted circle (e.g. people who work for the same employer) wouldn't that lead to a better user experience than what I had to deal with on Craig's List? In fact, this was the motivation behind Microsoft's Windows Live Expo which is billed as a "social marketplace". However the problem with marketplaces is that you need a critical mass of buyers and sellers for them to thrive. Enter Facebook Marketplace. 

Of course, this isn't a slam dunk for Facebook and in fact right now there are ten times as many items listed for sale in the Seattle area on Windows Live Expo than on Facebook Marketplace (5210 vs. 520). Even more interesting is that a number of listings on Facebook Marketplace actually link back to listings on Craig's List which implies that people aren't taking it seriously as a listing service yet.

Conclusion

From the above, it is clear that there is a lot of opportunity for Facebook to dominate and change a number of online markets beyond just social networking sites. However it is not a done deal. The company is estimated to have about 200 employees and that isn't a lot in the grand scheme of things. There is already evidence that they have been overwhelmed by the response to their platform when you see some of the complaints from developers about insufficient support and poor platform documentation.

In addition, it seems the core Facebook application is not seeing enough attention when you consider that there is some fairly obvious functionality that doesn't exist. Specifically, it is quite surprising that Facebook doesn't take advantage of the wisdom of the crowds for powering local recommendations. If I was a college freshman, new employee or some other recently transplanted individual it would be cool for me to plug into my social network to find out where to go for the best chinese food, pizza, or nightclubs in the area.

I suspect that the speculation on blogs like Paul Kedrosky's is right and we'll see Facebook try to raise a bunch of money to fuel growth within the next 12 - 18 months. To reach its full potential, the company needs a lot more resources than it currently has.