Unbundling YouTube, Facebook, and LinkedIn
Research: Julia Fontana
Originally published Oct 22, 2021
Did you know you can use the Facebook app to find WiFi in your area? Would you think to use Facebook to order tonight’s dinner? Large social media platforms like Facebook are jam-packed with countless features, some of which most users don’t think to touch. Presently, large platforms are appealing to wide audiences, and have to be everything to everyone. As a result, these social platforms become jack-of-all-trades sites that try to serve everyone, rather than specific tools that greatly benefit all of their users. More specialized applications and solutions emerge to better suit these need niches, and large platforms work to compete to address these niches by adding more features that may or may not compare.
This is not the first time this unbundling phenomenon has occurred since the dawn of the Internet. Craigslist, which was a go-to online destination for a variety of needs, has since splintered and its many features are now the driving forces behind many prominent digital brands we know today. The unbundling of Craigslist can be seen in the success of Airbnb, Reddit, and Zillow, to name a few.
Over time, Facebook has added many services to compete with upstarts in different niches. In 2013, Facebook acquired Onavo to use its VPN app to gather data about what its users were doing on their phones. For years, Facebook used the information it collected from Onavo to learn that WhatsApp was sending over twice as many messages per day as Messenger, for example, leading Facebook to buy WhatsApp. Facebook framed Onavo as a way for users to reduce their data usage and keep their traffic sace from snooping — while Facebook itself analyzed that traffic. In 2019, Facebook discontinued its use of Onavo. But Facebook has never stopped replicating other successful startups, apps, and services within its own platform. In Facebook Live, there’s Twitch. In Facebook’s “Order Food” option, there’s Seamless, Grubhub, and Uber Eats. Facebook has even tapped into online dating, a space crowded with Tinder, Bumble, Hinge and many more, with the 2019 launch of Facebook Dating.
Facebook is not the only large platform subject to unbundling — LinkedIn and even YouTube exist as online platforms for the masses, with many features that do not suit the majority of their users. Monetized content creators on YouTube have lost a great deal of advertising revenue as a result of structural changes to the site’s advertising model, causing many to migrate to new, more exclusive paid platforms like Patreon and Twitch. LinkedIn’s cluttered Jobs feature is often not as efficient as dedicated jobs sites like Indeed and AngelList.
Entertainment
New social media sites like Twitch, Clubhouse, and Patreon provide huge opportunities for brands, celebrities, and more to connect directly with audiences in ways traditional platforms cannot. These sites are beneficial to the creators, who can be compensated directly by their audiences, without heavy reliance on advertisers. This allows for more specialized and authentic content that viewers are willing to pay to consume. With a specific mission and paid membership models, these new platforms can more easily pivot to better suit their users, while also being more customizable to fit users’ specific wants and needs. These new sites pose as challengers to Facebook, which sought to serve this same connector role but lacks the same level of customization, novelty, and authenticity these new sites provide.
News/Information
Facebook presently serves as an online destination for news and information, though the site has been subject to misinformation, especially surrounding US politics and elections. Facebook has been involved in several scandals regarding political misinformation, most notably the Cambridge Analytica case during the 2016 US Election cycle.
Today, users can easily “share” posts with their Facebook friends that are riddled with misinformation regarding important topics, without fully realizing it. Facebook’s reputation as a hub for misinformation, despite news fact-checking and authentication efforts on its platform, may signal a larger shift away from Facebook as an informational news source, and a return to more reliable sources for news and information.
Positioning
Over the course of its almost 20-year history, many major brands pulled or threatened to pull ads from Facebook, who relies on ad revenue to offer free services to users. Facebook has made headlines for the wrong reasons over the years, including concerns over misinformation and “fake news,” US antitrust hearings, and data collection. Facebook is still led by its founder Mark Zuckerberg, who has often been at the center of these scandals. As Fortune 500 companies reconsider their Facebook relationship status, they may be migrating over to the next wave of platforms that allow them to provide a fuller view of their brand and to better connect with customers, without ad reliance.
Additional Resources
- Platforms vs Verticals and the Next Great Unbundling, Future from a16z
- News Use Across Social Media Platforms in 2020, Pew Research Center
- Social media: Back to the roots and back to the future, Journal of Systems and Information Technology
