Facebook’s Bet: “Wisdom of Friends” Will Beat Out “Wisdom of Crowds”

A New Yorker story says that Facebook is trying to come up with an approach to organizing the Internet that’s entirely different from what Google has done, guiding you through the preferences of your friends.

We talk a lot here at MIT Sloan about the “wisdom of crowds” (see, for instance, MIT SMR’s interview with Thomas Malone, “A Billion Brains Are Better Than One”).

But there may be times when you or I would prefer, say, 14 personally-chosen brains over a billion random ones. At least that’s what Facebook is betting on.

A Woman’s Place,” a profile of Facebook chief operating officer Sheryl Sandberg in the July 11 issue of The New Yorker, explains how Facebook is exploring this idea:

Chris Cox, the engineer who oversees Facebook’s product development, says of television, “You go home at night and there’s nine hundred and ninety-nine channels. . . . The real problem in that world is: What should I watch?” Perhaps you could read TV Guide, perhaps you could type “best Thursday sitcom” into Google, or perhaps you could scan some newspaper reviews. Cox wants you to be able to see on your screen what your Facebook friends are watching. “You should turn it on and it should say, ‘Fourteen of your friends liked “Entourage” this week. Click to watch.’ ” The idea is for Facebook to “tune in to everything around you,” he said. “We call it social design.”

To put it another way, Facebook is trying to come up with an approach to organizing the Internet that’s entirely different from what Google has done. Google’s answer to “best Thursday sitcom” has long been determined by algorithms that analyze billions of Web pages—the so-called wisdom of crowds. Facebook will try to guide you through the preferences of your friends.

Also in the story, written by Ken Auletta, this tidbit: “People often wonder if Facebook will go public soon. It’s projected that it will generate pre-tax profits of about a billion dollars this year. An I.P.O. now, analysts say, would be worth eighty to a hundred billion dollars. Although there was a flurry of stories in mid-June, reporting that Sandberg had been meeting with investment bankers in preparation for taking Facebook public, two senior executives at the company flatly deny this. . . . Sandberg does, however, acknowledge that investors and employees want to make a profit, and that an I.P.O. is inevitable. “We will go public at some point,” she says. At the end of this year, Facebook is expected to have five hundred shareholders, which will trigger S.E.C. regulations that require a company to disclose its finances to the public. It is likely that the company will go public soon after that, in the first six months of next year.”

2 Comments On: Facebook’s Bet: “Wisdom of Friends” Will Beat Out “Wisdom of Crowds”

  • kmdvs | August 11, 2011

    The strength of the wisdom of crowds, which I don’t believe is fully captured by Google’s page rank algorithm I must say, resides in great part on the convergence of a diversity of opinions from people who don’t follow each other…

    Friends, by definition, are influenced by each other…

    The question then becomes: “Do you believe things are better for you because they are inherently better, or because those you trust say so?”

    Probably a hybrid approach is the best.

    For decisions to be based on smart knowledge, it’s probably more worthwhile to rely on the wisdom of crowds to hedge against unknown risks.

    For decisions to be based on personal desires or tastes, your friends may have good advice, but don’t be afraid to explore the world outside of their sphere, to actually be able to help them (and fellow citizens) in their endeavors.

    For decisions to be based on creativity in order to innovate, a mix of both may be required, since creativity comes from lowering censorship and mixing many sources.

  • David Corkindale | August 18, 2011

    I thought that Web 3.0 promissed that when you searched for something rather than receiving many pages of results you got recommendations that matched your likely specific interest, based upon your previous web behaviour and your physical behaviour and activities as reported on Facebook or wherever. This would seem a better goal than just relying of a small circle of friends.

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