The Network Effect is defined as the impact the growth in actors within a network has on the value of a product, service or even the network itself. An example of the network effect is evident in many areas notably communication sand software applications. This can be demonstrated in the software sphere byan application such as Microsoft Office, where if there were relatively few users the value would be significantly decreased as the ability to share information with others would be inhibited.
This means the value of the product is driven by its use and proliferation of a network of users. The Network Effect is also visible in telecommunications where the value of the telephone is small if other memberso f your network do not have access to this technology.
The Network Effect introduces concept of critical mass or tipping point wherethe value of the few crosses into the many. Gladwell defines a tipping point asthe "the moment of critical mass, the threshold, the boiling point".
Small World Theory
Social networks form the fabric of our society, through the interaction withfamily, work, education and friends individuals form networks for sharinginformation. In 1967 American Sociologist Stanley Milgrim proposed the theoryof "Six Degrees of Separation" , the concept that every person oractor in a social network is at most six steps removed from any other. Thistheory is based on an experiment conducted by Milgrim in 1969 where a letterwas passed to friends in order to gauge the level of "connectedness"between parties. This became known later and was published as An ExperimentalStudy of the Small World Problem" by Milgrim and Jeffrey Travers.
The study states "The simplest way of formulating the small world problemis "what is the probability that any two people, selected arbitrarily froma large population, such as that of the United States, will know eachother?" The study was based on a sample of 296 people. From the outset 196participants were chosen from a mail program to identify residents in Nebraskathat held blue chip stocks, a further 100 residents were chosen from thegeneral population and another 100 from Boston. The mean number ofconnectections to reach the target was 5.2, from this the term six degrees ofseparation has taken root.
In a recent study conducted by Microsoft in which 30Billion electronic messages across 128 Miliion users were examined to revealthe level of closeness between the recipients.
Peter Whoriskey of the Washington Post write on the2nd August 2008, The "small world theory," embodied in theold saw that there are just "six degrees of separation" between anytwo strangers on Earth, has been largely corroborated by a massive study ofelectronic communication. The project concentrated on the Microsoft Messengerinstant messaging programs and its use across several continents in June of2006.
Eric Horvitz, a Microsoft researcher who conductedthe study said:
"To me, it was pretty shocking. What we are seeingsuggests there may be a social connectivity constant for humanity, People havehad this suspicion that we are close. But we are showing on a very large scalethat this idea goes beyond folklore."
The original work byMilgrim can be found here
http://www.ics.uci.edu/~xwy/cs235/papers/smallworld.pdf
Social Networking
Over the past five years online social networkingapplications such as MySpace (MS) and Facebook (FB) have gained enormouspopularity and use across the globe. A study conducted in 2008 and published athttp://business.rapleaf.com/company_press_2008_07_29.html surveyed 49.3 millionpeople as to their use of social networking applications.
Social network applications offer users the ability to share information acrossprofessional and personal relationships through a single channel, much like inthe "real world" or offline network models users build up networks offriends. The research above reveals a trend toward the use of MS and FB associal communication sites having between 2 and 25 friends this is 31% of the individualssurveyed, the next was those with only one friend with 14%, there were also800,000 people with more than 500 friends or 2% of the entire sample.
Whilst the research above indicates MySpace is a clearleader in terms of market share of users over Facebook, there is conflicting opinionon popularity with alternate research from Comscore indicating in June Facebookwas visited by 132Million people compared with 117 Million on MySpace. MySpacemay have a wider user base but it terms of recent use Facebook is inchingahead.
http://www.news.com.au/story/0,23599,24179174-38198,00.html
Facebook began in 2004 when founder Mark Zuckeberglaunched "thefacebook.com" at Harvard College, following this severalother Ivy League colleges followed suit before the application was renamed"Facebook" and launched on the general public. Facebook continues togrow in popularity and functionality with more and more applications beingadded each day, these applications vary in intention from the absurdly amusingto genuine commerce and social statistics application such as"socialistics".
MySpace began in 2002 when a group of individualswithin a development company named eUniverse began launched an applicationbased on the successful components of the social network pioneer "Friendster".This initial release was developed in ten days.
News Corporation purchased MySpace in July of 2005 forin excess of 500 million dollars before expanding the service to Asia andEurope.
Other Social Networks are aimed at theprofessional market most notably Linked In www.linkedin.com.Linked In is targeted at the business community in building a network oftrusted business associates. The service allows users to recommend othermembers and join groups of common interests.
Social Network Analysis
The term Network has broad meaning across many facets of society, it can referto biology, communications, infrastructure and human relationships. A networkby definition is a group (greater than two) of entities (nodes or actors) andthe connection (ties or relationships) binding these together. Whilstconceptually the observable network has evolved with humanity, networks havealways existed in nature and also observable in the most basic forms of lifesuch as bacteria through to the nervous and circulatory systems of mammals andother organisms.
Social Network Analysis is the systematic study and application of rules andmodeling techniques on a network of human beings, the discipline containsseveral terms key to understanding the relationship between actors withinnetwork some of these terms are:
Degree
A degree is a jump or tie between actors, this is most evident in the "sixdegrees of separation" where it is theorized that there is a maximum ofsix jumps between any two human beings.
Closeness
Closeness is the shortest distance or number of jumps between actors
Betweeness
Betweeness is the value a node has on the flow of information, a node with highbetweeness would occur when a node held an critical point in the flow ofinformation between parts of the networks. That means information may only flowto parts of the network if this particular node exists. This node would be saidto have high betweeness.
Network Centralisation
Network Centralisation is the concentration of ties amongst nodes, acentralised network would contain key nodes within the centre where mostinformation flows to boundary riders with few ties, whilst a decentralisednetwork would contain similar amounts of relationships for all nodes.
The Social Graph
The Social Graph is a visual representation of a social network, this usuallyconsists of a display of nodes and ties, often with the boldness of the tierepresenting the number of ties in given areas of the network. The graph can behighly concentrated showing many nodes t very simple showing only a few. Thevisualisation is intended to show the nodes and the ties.
There are many social graph applications available to display informationacross various networks, Google recently released and application programinterface (API) that calculates relationships across various web applicationsand displays these as a visualisation.
http://whatis.techtarget.com/definition/0,,sid9_gci1284961,00.html