Social Nets Hitting Point of Diminishing Returns


In the new Internet boom, Metcalfe's Law—that bigger networks are better—is being questioned once again. We've been writing about the potential of social networks for the enterprise. Our reporting and research show that the Facebooks and LinkedIns of the world are growing within the business, but they still have a ways to go.

Or do they?

Jeffrey M. Stibel, a Web entrepreneur and brain scientist, says some of those popular social nets are reaching a critical mass—and, subsequently, a level of diminishing returns.

That goes for all networks, including the brain, he says. (And, incidentally, all that technology may actually be hurting our brains.) Our brains stop growing when he hit our twenties; social nets are only a few years old, really, but has their time come?

Stibel says Metcalfe's Law (named for Ethernet inventor and 3com founder Robert Metcalfe), which says a network's value is actually the square of its users, needs to be scrutinized. Instead, he posits, we should accept that all networks will hit a level of diminishing returns.

Businesses are clearly lagging consumers in adopting social networks. And if a tidal shift occurs, with companies truly beginning to harness the power of Facebook, etc., can't that give social nets a shot in the arm?

Has your company deployed social networks for business purposes? If not, will it?