• The Economist, Friday, October 19, 2007 10:45 AM

A new fad has taken hold in Silicon Valley, but it lacks substance. We're not necessarily talking about the astronomical valuations placed on companies that don't warrant them--we are, but only indirectly. It's the open platform and the social graph, two ideas popularized by Facebook founder Mark Zuckerberg when he announced in May that third-party developers could create programs for his site.

Silicon Valley seems to be most taken with the latter. In some tech circles, geeks and venture capitalists alike refer to the social graph as a kind of advertising Holy Grail: think of a gigantic graph with a pattern of nodes representing Faceboook users and all the things that connect them. Tech firms have been so excited by the innovation that several social network providers, including MySpace and soon, Google, have followed suit.

However, Silicon Valley's craze for the "social graph"...is overdone. What it essentially comes down to is a gigantic address book that contains more information about each user. But unless Facebook grows to the point where it becomes the de facto hub through which consumers experience the Web--unlikely due to the recent trend toward smaller, exclusive social networks--the social graph will be just another behavioral tool for advertisers, and another set of features for consumers.

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