Doug Rushkoff had an interesting piece the other day that touched on something I’ve been thinking a bit about. In it he argues that Facebook is cashing in because they see that their party is over. And when a party is over, people get tired of socializing and leave. He says:

Yet social media is itself as temporary as any social gathering, nightclub or party. It’s the people that matter, not the venue. So when the trend leaders of one social niche or another decide the place everyone is socializing has lost its luster or, more important, its exclusivity, they move on to the next one, taking their followers with them. 

Its an interesting argument and one that could have some merit based on the lens of the past through which he’s viewing it. Essentially, his view is that MySpace sold at their peak, lost their coolness and their users jumped ship to Facebook. And, in these digital businesses with zero switching costs, the move from Facebook could be just and sudden and just as damaging.

I was never a MySpace user and don’t know whether his portrayal of the exodus is correct. I do know the switching costs arguments have been around a long time and that they generally don’t play out as pundits warn. Prior to the Google IPO, many raised the same concern:

Switching costs and brand loyalty of search engine users are low.  Just as people quickly switched to Google, people can quickly switch to a competitor.  It’s difficult to think of a product or service with lower switching costs.

Sound familiar?

One thing missing from the Google and Facebook switching cost arguments is that the size of both markets exploded in size. At its peak,MySpace had around 120 million users. Facebook shot past 500 million users with half of those users logging in everyday. 

I think Facebook will be just fine. They’ve done a fantastic job of educating a massive audience on the power of a consolidated social graph and enabling developers, companies and content providers with tools to leverage their platform. I believe them when they say they’re just getting started.

That said, I’m with Lawrence Colburn:

The next big contender in social networking / social media may not be a single company at all.  Rather, it may be a thousand companies, each focused in purpose, and each able to provide a slightly better experience than the generic social network. 

Facebook is less like the hot new dance club and more like Wal Mart. Its huge and you can find just about anything you’d need there. But if you’re into fashion, you aren’t going to buy clothes at Wal Mart. If you’re into cycling, you’re not going to buy your bikes there either. Both Wal Mart and Facebook are great businesses, but neither are suited for all people all the time. 

Entrepreneurs and users understand this and are building and flocking to services that deliver a more satisfying user experience for various interests or social circles. As these services are adopted the social graph created morphs to the new context. The way I’ve organized my social graph on Twitter is very different than how I’ve done so on Tumblr. The people I follow on Foursquare are different than those I follow on Instagram. I don’t chose just one of these services to the exclusion of all others, in the same way I don’t chose to do all of my shopping at Wal Mart. 

I don’t think Facebook has peeked in its adoption. I still frequently have conversations with friends and family members torn about creating an account. I do think they’ve educated 500 million users so far on the power of context and connectedness. Whether they all choose to exclusively use Facebook as their one and only social network or as training wheels for more targeted social experience remains to be seen. But, I believe there are many services waiting to be reborn social and many new users who understand the power of what that means.