Commentary

Can 'The Social Network' Hurt Facebook?

The figures are in, and "The Social Network" is a hit, taking in $23 million in its first weekend as 2.9 million moviegoers flocked to theaters to see the (often unflattering, possibly wildly inaccurate) retelling of the early days of Facebook, the world's leading online social network, with which most readers probably have at least a passing familiarity. Naturally this raises the question of whether the film's not-so-complimentary portrayals of Facebook execs -- especially CEO Mark Zuckerberg -- could in some way damage the company by, for example, fostering negative perceptions that cause people to abandon the site.

In short, the answer is "no." But that doesn't mean Mr. Zuckerberg and other top execs shouldn't be watching their backs.

I don't doubt that many people who go to see "The Social Network" are also avid users of Facebook, but that's kind of the point: if they're so besotted with the social network, they're unlikely to drop their carefully-crafted profile and painstakingly accumulated friends and wall comments, no matter how mean those nerdily handsome Harvard founders treated each other.

In a weird way, Facebook could actually benefit from the attention to privacy issues, if it inspires users to take proactive measures to protect their personal information -- averting potential PR disasters down the road. We'll never know for sure, since I'm hypothesizing a negative, but I'd be interested to see whether Facebook sees more users adjusting their privacy settings in coming weeks and months than before the movie opened. In this scenario, enduring some negative buzz now could actually be a good think for Facebook, if it forces users to take their own privacy more seriously.

Even supposing viewers were shocked by the revelation that successful companies are sometimes sprung from unethical beginnings or don't treat their customers with respect, there's (currently) nowhere else for social network users to go that can offer the same functionality and broad reach in the general population. Facebook has momentum on its side: everyone that you want to connect with is on Facebook, so you have to be there too. To put it yet another way, Facebook has a monopoly on being Facebook. If you don't like it, tough.

Looking for a historical comparison, it's not like Americans didn't have reservations about the monopoly created by Standard Oil back in the late nineteenth century, but if you wanted kerosene to light your house (or later gasoline to drive your car) you had no choice. You could boycott Standard Oil and live in the dark, but what would be the point? No one else would support your boycott, the company would take no notice, and you would be massively inconvenienced, sitting in your dark, lonely house whilst your neighbors danced the night away in merry, kerosene-lighted conviviality, dash it all.

But nothing is set in stone. Facebook might currently be as ubiquitous as Standard Oil in its heyday, but its dominance isn't nearly as stable as that enjoyed by the oil monopoly, with its exclusive ownership of critical physical assets and overwhelming financial might. By contrast Facebook's basic online ingredients are available to any ambitious entrepreneur; it's just a matter of wooing fickle online audiences away with some kind of superior value proposition.

On that note, in recent months I've written about a number of new social networks targeting users who may be disillusioned with Facebook, including its original core audience of college students.

3 comments about "Can 'The Social Network' Hurt Facebook?".
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  1. Augie Ray from American Express, October 5, 2010 at 12:26 a.m.

    I agree with your thoughts on this. In my own blog post I noted that, "The Social Network is as much about Facebook as Titanic is about the White Star Line... the tale of how a few geeks and freaks got caught up in an entrepreneurial frenzy, cheated each other, and destroyed their friendships is hardly an indictment of Facebook."

    If interested, my blog post is on the Forrester blogs at: http://bit.ly/alSfz7

  2. Wendy Mcgrath from JSH & A Public Relations, October 5, 2010 at 10:29 a.m.

    I enjoyed the movie. It will not change my opinion of FB anymore than knowing Bill Gates was not altogether forthcoming with Apple back in the day.

  3. Howie Goldfarb from Blue Star Strategic Marketing, October 5, 2010 at 10:30 a.m.

    Come on the only people who can hurt Facebook is Facebnook themselves, And they have done such a good job I doubt they will be around in 5 years as an independent company. They will be the next Myspace where a big company buys them for 5bil making some investors money but not the tail end investiors, and the buyer will claim they know how to turn them around.

    Every time Facebook announces some great achievement when you look behind the numbers they fail. The only thing Facebook has is 540mil account created. We have no idea how many are truly viable, used often, or aren't spam (and a lot are spam). Everything else they announce turns into a debacle whether its a new initiative or like Media Post reported last week 250million video views...which really was 0.46 Videos watched per user per month something media Post failed to state as a big Facebook failure not success!

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