Venturebeat is reporting that Facebook is planning to introduce a system of giving people credits for status updates:

My first reaction to this was “That’s evil“.

My second reaction was “That’s brilliant“.

After further consideration, I amended it to “That’s brilliantly evil“.

Currently, my position is that it could be any one of the three depending on how they choose to go about it.

What Facebook has done in essence is linked social status to economic status and I think a lot of how this will play out depends on how facebook crafts the narrative around this.

Let’s look at the three alternatives in turn:

Evil

By turning social interaction into a economic exchange, facebook turns the default social relationship from one of Balanced Reciprocity into one of Negative Reciprocity.

When we deal with close friends, we engage in a gift culture. I do good things for you because I like you and I expect you’ll return the favor at some later date. With strangers, we are forced to default to an economic exchange because there does not exist a sufficient level of trust to permit a gift culture. What role someone plays in our social sphere is determined by what sort of reciprocity interaction we engage in.

If facebook links their virtual currency up directly to social status with no other viable alternatives, then it forces people to negotiate an economic exchange in relationships which were previous based on gifting. This becomes a hugely uncomfortable experience as one person now occupies two different reciprocity relationships and it becomes unclear what the social obligations are.

If credits become the default social currency of facebook, then I predict disaster. If someone on the site ever thinks “Hey, how come he gave John 300 credits but he only gave me 200 credits? He must like John 50% more”, then facebook is in for some tough times ahead.

Brilliant

At the same time, if facebook designs this feature right, it could be the holy grail of monetization that they’ve been searching for. I’ve never been too convinced that advertising was going to be the business model for facebook given that they have such a rich social tapestry to explore. If they manage to design this feature so that economic exchange is an augmentation of social interaction, then they can leverage credits as a more authentic form of social engagement.

Many of our real world authentic social interactions are marked by economic exchange. Buying a beer for a friend or bringing back souvenirs from a trip abroad for example. In these cases, money spent makes these activities seem more authentic, not less. How can facebook exploit this? I’m not quite sure. But if they manage to strike the right balance, they could end up with a system that both promotes even deeper social engagement while at the same time, make them money hand over fist.

Brilliantly Evil

The most chilling of these three alternatives is that facebook manages to co-opt social status by turning it into an economic exchange. DeBeers convinced America that you buy a diamond to demonstrate your love for a girl and that you love her because the diamond is expensive. The DeBeers mentality is that the only authentic way to demonstrate social status is through economic exchange.

If facebook manages to accomplish this, then the result will be that every facebook employee will become an instant millionaire but facebook profile pages end up looking like something from MTV Cribz.

The road ahead:

Facebook credits has the potential to greatly enhance the range of social expression on the site but it also has the potential to become a complete disaster. Which one of these paths facebook ends up taking depends crucially on the narratives that it’s users adopt and these narratives depend crucially on how facebook credits ends up being designed.

At this point, I’ve only had a few hours to digest this so I don’t think I’m ready to give design suggestions but here are some things I suggest would be worthwhile to explore:

• What do credits incentivize? Can they become subject to the overjustification effect? Any incentive scheme is going to distort behaviour, and always in ways you never anticipate. Deciding what credits do will have a major function in how they are used.
• What does credits make comparable that previously wasn’t? How many home cooked meals is getting picked up in the rain after getting a flat tire? It’s precisely because such questions are hard to answer that make gift exchanges so convenient. If Facebook puts a value on something that was previously hard to price, it removes some of the social ambiguity that makes friendships run smoothly.
• How close to money should it be? Behavioural Economics has shown consistently that Humans regard money-items as very different from non-money items. Under the right conditions, people will prefer $10 gift cards over $15 in cash and are willing to steal $1 chocolate bars but not $1 bills. By calling them credits, facebook pushes it towards the money end of the spectrum which may or may not be what they desire.
• How close is the link between cash and credits? How many different ways are there of gaining credits and which of these methods is credible? In the original article, the only two ways that credits can be earned are through buying them or building up reputation. Is someone who gives out lots of credits a person who’s rich or a person who has high social status? Is there any way to tell? If there is, does buying credits increase or decrease your social status?

I have to admit, I’m intrigued by the credit system and the social implications that it has. With the right design principles, it could potentially be a game changer much in the same way that the Facebook Application Platform is. And yet, in my discussion with friends so far, I’ve heard nothing but pessimism and I think this is a reflection of all the various ways a scheme like this could go wrong. I guess there’s nothing to do but wait and see what happens.

Ugh, yet another media establishment is running the fallacious facebook redesign argument and acting all clever about it. Sadly, this time it’s one I actually respect.

Wow, I’ve been talking about facebook a lot recently. I’ve been hearing this argument a lot about the redesign:

1. Here is some evidence that users hate the new design
2. But users have hated every redesign of facebook when it was first rolled out
3. And eventually users learned to love it

There’s an implicit logical fallacy in this: Just because some users hate good redesigns because they’re change-phobic, does not mean that hating it is evidence for it being a good redesign. Unfortunately, facebook as a culture has learned to ignore user feedback until it gets to the point of overwhelmingness for precisely this reason. Mark my words, this rebellion is not going to be quelled like the last few were because they really are pointing to systematic failures in the design.

Every time facebook does a redesign, the basic concept is sound but they manage to get the specifics wrong. I was enthusiastic when they moved to a real time streaming feed system but not so much after I discovered they removed the filtering algorithm at the same time which allows this sort of thing:

It seems like how I use facebook is radically different from how facebook thinks I use facebook. For me, events are one of the killer apps that facebook provides, it’s basically the driver for my social calendar. But facebook has oddly seemed to relegate it to the red headed stepchild of it’s feature list. I talked a while ago about how you could infer company priorities through their mobile offerings and it’s quite telling how facebook regards events. Let’s review the status quo:

• Facebook for the iPhone app: events are completely missing. Theres no way to see them, there’s no way to interact with event news on the news feed, it’s almost soviet in it’s denial that events exist.
• Facebook website for the iPhone: Events are linked to prominently on the front page but the event description page is missing several crucial pieces of information. Address is listed but not location, both host and description are missing and, most importantly, the attendee list is missing. Photos for events is devoted an entire tab despite the fact that maybe 5% of events I go to ever upload any photos.
• Facebook Mobile: This is the only mobile offering that actually has a usable event interface but it’s also the least rich in user interface and most annoying to navigate to.
• Facebook main website: Post redesign, events are getting an incredibly short shrift on the new main website. Sure, you can see what everyone else is going to but trying to figure out how to get to a list of my events for the next week took me twenty minutes of poking around (click on the event app in the bottom left). I’m not sure anyone but a power user can still figure out how to see what events they committed to more than two days in advance.

I have to admit, I’ve quite puzzled by facebook’s attitude on this given that not only do I regard events as an essential part of facebook, I regard it as pretty much the killer app of facebook mobile. When I’m away from my computer, the chances are better than even that I’m heading to an event, at an event or leaving an event. Facebook needs to recognise the opportunity it’s been missing by neglecting events and return them back to their rightful place in the facebook ecosystem.