By: Jean-Francois Belisle

Jean-Francois Belisle — Fri, 14 Aug 2009 21:43:47 +0000

@Arasmus. Thanks for your useful thoughts. I totally agree that costs related to trust are switching costs that need to be added to my analysis. I was looking for a more psychological cost, but only have cognitive costs in mind, which I don’t consider as important switching costs in this specific situation. However, as a matter of fact, I don’t think costs related to trust should be considered at the same level of abstraction as the other three costs, but more as an outcome of the three switching costs I enumerated. Trust in this context should also be divided in two: (1) trust toward the social network and (2) trust towards your connections (friends), which are two different concepts. Moreover, I would add a precision to your analysis by adding that mainly trust toward the social network should be considered as a switching cost, trust toward your connections (friends) should not directly influence your decision to switch or not. However, it is more the number of your trustworthy Facebook connections or social graph that will switch to Google Wave that will sure have an impact, since this is a switching incentive that could be easily related to Metcalfe Law was it implies that the attraction of a network grows as its population grows.

By: Arasmus

Arasmus — Fri, 14 Aug 2009 17:07:41 +0000

Jean-Francois – thank you for your thoughts, which I found through Facebook’s new search function! Over the last week, I have really come to see that Google and Facebook truly are facing off in what will probably be the major battle on the internet for the next several years. At the center of this battle is the battle for trust. I use the word trust in this context to mean the infrastructure of trust with which humans generally have built so many institutions that we come to think of as part of our civilization, eg markets, news-organizations, borrowing-lending, political elections etc. All these things are built on trust – we buy more, believe more, give more and vote more for those we trust. Over the last ten years the internet has allowed us to do things but we often did them with certain leaps of faith and we never went beyond a certain level of engagement because of the absence of a system of trust – eg peer-to-peer lending is still in its infancy. Facebook’s great value is that it has created an analog of our real-world trust relations and taken that into the Internet. As crowd-sourcing gather pace as a process (eg getting our news via Twitter) filtering the quality of that information (see Iran government disinformation campaign this year) becomes a huge asset. Trust can do that and Facebook’s got that in our social graphs. Those social graphs can be used to place greater weight on one report of a bomb-blast than another. I am really seeing now the scale of the horizon where using the social graph to filter crowd-sourced results can give birth to new institutions. Google is going to have a very hard time pulling users away from the magnestism of those establish trust-bonds. I feel that’s the major switching cost.

Comments on: Fighting for the Web Supremacy: How Will Google Wave Suffer From Switching Costs and Lock-in Against Facebook?

By: Jean-Francois Belisle

By: Arasmus