Did Facebook miss a massive opportunity by building a walled garden instead of a truly open platform?

When Facebook (s fb) first launched its platform strategy in 2007, it seemed as though a new world of opportunity had opened up for anyone interested in the social web — a kind of social operating system that they could build on and extend. Did Facebook smother the potential of that idea by closing off its platform and building a proprietary walled garden instead? Pando Daily writer Hamish McKenzie argues that it did, and it’s difficult to find much fault with his analysis.
All of which raises an interesting question: What could Facebook have become if it had chosen a different path? And what have we lost in the process?
Anyone who was following Facebook at the time probably remembers the kind of excitement among startups that McKenzie describes in his post, and the rapid emergence of companies such as iLike and Slide, who quickly built a slew of apps and services — viral games, music-sharing apps and other add-ons — that used the Facebook API, in much the same way that desktop software uses Windows or the Mac OS. The opportunities seemed limitless.

A new social operating system

In fact, many of those writing about the launch of the platform and the “social graph,” which took place at the company’s inaugural f8 developer conference in San Francisco, used the operating system metaphor to describe what the social network was building — and founder Mark Zuckerberg talked at length about the freedom that developers and startups would have to build not just applications but even “new industries” using Facebook as a foundation.

“Right now, social networks are closed platforms,” Zuckerberg said. “And today, we’re going to end that. With this evolution of Facebook Platform, any developer worldwide is going to be able to build full applications on top of the social graph, inside the Facebook framework.”

Instead, Facebook started to tinker with its platform fairly quickly — not just limiting what developers could do with the API, but closing off whole sections of what the platform used to allow, in part to make it easier for the network to build or promote its own similar features and applications. By the time Facebook launched the “open graph” evolution of Facebook Connect in 2010, it was obvious that all of this openness was designed to generate benefits for Facebook, not to make it easier for developers to build interesting applications.

Just another proprietary walled garden

Facebook-based app developers such as Slide and iLike ultimately withered and were sold for a fraction of their earlier valuations, and building something significant on top of Facebook stopped looking like something for startups to aspire to. Even Zynga, which had become a kind of poster child for the benefits of the Facebook platform, started to decline in value. And it’s worth noting that Facebook’s lack of openness wasn’t just an impediment to startups or developers — it also had real impacts on what users could do with their data and the interoperability of apps and services.
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In hindsight, it almost seems absurd that anyone thought Facebook would actually build something approaching an “open” platform or a level playing field, or that it wouldn’t pull whatever levers were necessary to tilt the balance in its own favor and keep the most valuable real estate and data for itself, just as Microsoft and Apple have done with their own platforms. As a number of advocates of openness have argued — including Sir Tim Berners-Lee — there is only one truly open platform, and that is the web. Proprietary networks like Facebook are designed to generate value for their owners, period.
McKenzie and others quoted in his post make the point that Facebook’s focus on short-term platform goals may have prevented it from capitalizing on a number of potential opportunities — including mobile. If Facebook had tried to be more open or egalitarian, could it have built itself into something like Android, which has created an ecosystem that now rivals Apple’s in some ways? Instead, Facebook has to made do with launching a kind of home-screen replacement for Android devices, which few people will use and will likely generate little long-term value.
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What if Facebook had taken another path?

But what if Facebook had taken a different route, and tried to build something that was really open, instead of rigging the game in its own interests — would that have generated more long-term value? Some would argue that the answer is obviously no: proprietary systems and platforms are inherently more valuable, they say, which is why Apple is worth $400 billion and the Linux ecosystem is a hodgepodge of charity cases (with the possible exception of Red Hat). Others, however, have argued that while closed networks can win in the short term, open systems almost always prevail. As Betworks founder John Borthwick put it:

“It is a core Betaworks conviction that open systems will prove more compelling, more resilient and more valuable to users than closed. Or to say it perhaps a bit more precisely: In a multiplatform world where open and closed systems will always co-exist, the force and power of openness will ensure the existence of a viable ecosystem.”

In a sense, Facebook’s dilemma around open vs. closed platforms and the choices it has made along the way look very similar to what Twitter has been going through, as it has evolved from being an open network into a media entity that controls every aspect of what happens on its platform and only works with certain preferred partners. Instead of an open, federated messaging network for information, we have a company priming itself for an IPO by serving you ads based on what TV show you just watched.
Whether Facebook made the right choice likely won’t become obvious for some time, if it ever does. But it’s worth wondering what might have happened if it had chosen a different path — and what both Facebook and users have lost as a result of the choices it has made.
Post and thumbnail images courtesy of Flickr user Jason McElweenie