Many of us have a second job. We stealย time from our family, from our employer and from our hobbies in order to work on it. It doesnโt pay anything, in spite of the tremendous amounts of creativity and time we invest inย it. Somehow, we convince ourselves itโs worth doing (perhaps because we know everyone else is doing it too).
Iโm talking about your second job as a Facebook user. Or maybe itโsย a Twitter,ย Google+ or LinkedIn contributor. Iโllย concentrate onย Facebookย though, since soย many of us useย it. According to Mark Zuckerberg, โpeople onย Facebookย in the US spend aroundย 40 minutes each dayย using our service.โ So, itโs really just aย part-timeย job. We do it for a littleย over four and a half hours a week, on average; some of us obviously much more, and some of us much less.
We donโt get paid for these hours, so really itโsย more of aย volunteerย gig. Except that, in this case,ย weโre not really doing it for a charitable, nonprofit organization, but for an entity whose net profits were $1.5 billion last year and whose revenues are now growing at around 55% a year.
Theย Exchange of Value on Facebook
But we allย getย something fromย all that time weย invest inย Facebook. Thereโs value there, or weย wouldnโt be doing it. We get to stay up on what our friends are up to and keep them informedย on our latest puppies, trips, anniversaries and even our little rants and raves over the news and other stuff. Despite how easy it is to make fun of our addiction and our time spent there, itโs actually a veryย valuable service.
The same could be argued for watching TV โ and we still actually spend a lotย moreย time there. As hard as it is for me to believe, Americans spend someย five hours a dayย watching TV, on average.
With TV, weย play a critical role as watchers ofย the stream of content and the advertising neatly tucked between the crevices of what we actuallyย wantย to see. Without ourย eyeballs, thereโs no advertising revenues. As media consumers, we play a critical roleย the valueย proposition toย theย actualย customers: โ the advertisers.
This is true withย Facebookย too, but thereโs also a critical difference because, withย Facebook, Iโm not justย consumingย the media, Iโm alsoย creatingย it. In fact, without you, me and the billion-plus other nodes in that network,ย nothingย would flow through it.
Iโm telling you this like itโs news or something. But itโs not, of course. We all know that itโsย ourcontent that makesย Facebook, LinkedIn,ย Google+ andย Twitterย actuallyย work, but somehow, weโve convinced ourselves that contributing all this time and energy for freeย is absolutely normal.
Butย isย it?
Facebook Users: the Value of Volunteer Labor
When you look at the market capitalization of media firms, you see thatย newย media is valued much more highly thanย oldย media. Take the total value of outstanding shares of a companyย and divide it by itsย revenues, and you end up with a ratio that can helpย show the marketโs expectations of these stocks (I useย revenuesย versusย earningsย because LinkedIn and Twitterย still have negativeย earnings, andย because revenuesย are lessย easily manipulated than earnings).
Mostย of what this chart showsย is what youโd expect to see in any comparison of growth stocks vs.ย more mature stocks: the market anticipates growth into the price of the stock, and the law of numbers dictates that itโs easier to grow from a small number than a larger one.
And yet,ย what ifย there were a class of media properties that were just intrinsically more profitable than others because of the way that they were built? What if a media firm designed itselfย to no longer rely on paid employees to produce content? What if it could automate the outsourcingย of this work, not to developing economies, but to end users?
A firm like this would still have employees, but most of them โ certainly the highest paid ones โ would be extremely technicalย software engineers charged withย building the technological platformsย needed toย enable end users to contribute free content.
A company like this could be extremely profitable, especially if it built sufficient critical mass to be the go-to place forย end users toย contribute content and know it would beย seen by others. This is exactly what weโre seeing with our newly emerging media titans, and itโs a bigger pattern of technology:ย displacingย jobs, increasing profits. I coverย this shift in media in more detail in โA Pattern Language forย New Media.โ
Itโs Our Decision
Thisย isnโt just aboutย Facebookย social sharing. The Huffington Post operates a version of this,ย using bloggers for its workforce, and now LinkedIn has perfected that approach with its new, and fast-growing, bureau ofย Long-Form Postsย writers, a number of whom are quite good.
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About the Author
This article was written byย Gideon Rosenblattย ofย The Vital Edge.ย Gideon ran an innovative social enterprise called Groundwire for nine years. He worked at Microsoft for ten years in marketing and product development, and created CarPoint, one of the worldโs first large-scale e-commerce websites in 1996. The Vital Edge explores the human experience in an era of machine intelligence.