A very strange story hit the media recently about claims that Samsung was planning to launch a Facebook clone. Samsung immediately quashed the rumours, but backtracking slightly they admitted that the Samsung ‘Family Story’ App – which allows people to share photos and news updates with friends – was going to be expanded and improved.
What is surprising about this story is that critics assumed that by adding a photo-sharing tool to their phones, Samsung would be able to in some way rival Facebook.
Facebook is now a global juggernaut with more than half of all connected people using it regularly. Even Google has struggled to build a social network to rival it, with their G+ hailed as a technical success even though very few people actually use it.
And this is the problem for any new market entrant; the network effect prevents a rival emerging quickly. Consider online auctions as another example – you will always turn to eBay first because it is where most sellers go to list their items and they are listed there because it is where most buyers go to find something.
Facebook has suffered negative publicity over their recent IPO and the incredible overpricing of the stock at flotation, but the company is still in a powerful position to control the vast majority of the time people are online – and therefore may yet justify a value far greater than it presently trades at.
If Facebook moves from being just a social network to being considered almost as ‘the Internet’ then what hope does any rival have, whether they have millions of phone handsets in the market or not?
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