Wow this network conversation is out of control. This law vs. that law. The bottom line I agree there are too many people trying to develop the next best social network. The issue I try to address for our intended market is HOW TO GENERATE VALUE. How can we provide value. To me personally it means a unique and well positioned blend of content, communications, social network strength, target network strength, credibility, verification, marketing power, interoperability, UI design / feel, brand, etc…

For social networks focus on a target market and power it with compelling media and sophisticated technology. Run like hell and try to generate a strong base of users get acquired so you don’t die when the shake out and consilidation happens within 3 – 5 years.

Just one entrepreneurs thoughts at 3 AM on the whole WEB 2.0 craze!

I’m 340 pounds, it comes with the territory.

You say peer-to-peer is bringing back a problem that TCP had alleviated for some time.

Why has peer-to-peer use grown?

Users are routing around central control.

How can you say users settle for “what we contract.”

My cable company blocks port 25, I use another. My IT department says no IM, I use port 80.

Does that sound like people want control?

You technical points are brilliant, but I think users don’t care if something is technically feasible, they are going to try and get.

And often they win.

Sometimes everyone loses. Like clogged University networks and MP3s.

It’s a constant battle I guess.

Network value = the sum of the value each member of the network places in it.

But, of course, that is incalculable (what, again, is the dollar value of love?).

Network value as you define it may be difficult to calculate, but it is by no means a hopeless problem — in fact, the next Holy Grail of searching is to make this “incalculable” quantity as fundamental to next-generation search engines as PageRank is for Google. cf. John Batelle’s The Search for a good summary of how these highly personal subjective valuations of the Web will power search in the future. It’s pretty wild stuff.

Jeff,

you are, I assume unwittingly, propogating a misuse of the term “exponential growth”.

While Moore’s law is about exponential growth, Metcalfe’s is about a polynomial (specifically quadratic) growth which, beyond some crossover, is vanishingly small compared to exponential growth.

(Specifically:

- exponential growth with respect to some input ‘n’ is described by a^bn, where a and b are constants

- polynomial growth with respect to some input ‘n’ is described by an^O + bn^(O – 1) + cn^(O-2) + …., where a-z are constants and O (“order”) is a positive integer constant. In the particularly well-studied case where O=2, it is referred to as quadratic.

Note in particular that for polynomial growth, the ‘n’ always appears to the left of the exponential operator ‘^’, for exponential growth, it appears to the right.)

We have a forthcoming plugin for Wordpress that you might enjoy quite a bit. It is called Buddy Cards and starts to tie social nets and identity together. Here’s some more on what we are building at 30Boxes:

http://30boxes.com/blog/index.php/2006/07/25/30boxes-as-social-supernet/

Users therefore do want someone else to control the network, and most of us are mature enough to realize that “all you can eat” being an economic rarity, limits are what we contract for. Most users probably appreciate the fact that they can buy an service plan that limits their bandwidth because it also limits the price they pay and requires those with larger appetites to subsidize their network usage.

If the network isn’t controlled, it simply collapses, and we have plenty of experience with that on the Internet. The Original Design by Cerf and Kahn lacked control, and consequently underwent “Internet congestion collapse” as soon as there were enough users to overload its internal links. Control – in the Transmission Control Protocol – alleviated this problem for a time, but peer-to-peer is bringing it back.

Can we solve this problem by adding more bandwidth to the Internet? No, because the laws of physics get in the way. And oddly enough, the closer to the center of the network you get, the better you’re able to ensure stability along with fairness and all the other good properties of user-friendly networks. You can’t manage traffic strictly at the edge. Bummer.

Are users as stupid as Jarvis implies? Clearly, many are, but by the time our pimples clear up we generally discard such silly demands for “control” that can’t physically or practically be done, and settle for a network that allows us to do what we contract with the network provider to do.

I’m not sure that’s the type of “control” we are talking about.

AOL or Mobile providers imposed a certain type of “control” even though they were/are using the same open internet protocols as everyone else.

But your point is well taken.

Perhaps it’s not control that users want, but they certainly don’t want anyone else to control the network.

That is, they don’t want anyone putting limits on how they use the network.

For example, if MySpace says “no more flash”, it opens up an opportunity for a competitor to “we’ll take you flash widgets!” and get some converts.

So it doesn’t really make any sense to get all hung-up over the old-fashioned edge vs. core dichotomy.

Similarly, it’s a fallacy to insist that users want “control” over the network. That would imply they want to run full-blown routing protocols, network management systems, firewalls, and spam filters. I don’t think they want control as much as they want choice with respect to services, prices, and responsibilities. When you “control” a network, you take responsibility for it, and users don’t want to be sys admins, they just want to play.

That being said, Metcalfe and Reed both err in failing to appreciate the negative effects that limit network value: spam, viruses, and idiots. Only a naive Utopian fails to include them in his value calculation.

We admit that our n log(n) valuation of a communications network oversimplifies the complicated question of what creates value in a network… [it] cannot be proved, in the sense of a deductive argument from first principles. But if we search for a cogent description of a network’s value, then n log(n) appears to be the best choice. Not only is it supported by several quantitative arguments, but it fits in with observed developments in the economy. The n log(n) valuation for a network provides a rough-and-ready description of the dynamics that led to the disappointingly slow growth in the value of dot‑com companies.

We have, as well, developed several quantitative justifications for our n log(n) rule-of-thumb valuation of a general communications network of size n. The most intuitive one is based on yet another rule of thumb…

In other words, “our SWAG is better than their SWAG because…”

The rest is an apples-and-oranges argument. Since there’s no agreement about what “value” is supposed to represent, it’s no wonder different people get different answers: Jeff (and Metcalfe) are talking about “value (“usefulness”? “willingness to pay for”?) to the user,” while to the IEEE guys “value” appears to be limited to “What can we get if we do an IPO on this?” Isenberg’s “Just deliver the bits, stupid.” network will have less value (in the IEEE sense) than an identically-capitalized “controlled” network, simply because it lacks the controlled network’s rent-seeking opportunities. (Why do telcos fear net neutrality?) Meanwhile, as Jeff notes, it doesn’t matter what the market cap of myspace is: If he doesn’t use it it is of no value to him as a potential user/customer.

Martha Soukup had it right, when GEnie flew to pieces in 1994: “It’s the community, stupid!”

If you recall, I scribed some parallel thoughts here… http://gigaom.com/2005/09/08/inherent-truths-and-value-of-community/