@andrewchen

After
re-reading what I wrote as well as the comments below, I realized I
should have probably also addressed the following two things in my
original email:

First, what do I mean by a utility-based app?
Second, should Facebook aim to be a utility? 

To
answer the first question: by utility I don’t just mean applications
that are in the "utility" category of apps on Facebook or any sort of
web application that might be considered generally useful. Rather,
I mean it in the particular way I take Zuckerberg to mean it: an app
that leverages the social graph to create greater social and personal
value.

Definitions are important here. To
illustrate exactly what I do and don’t mean, I’ll outline what I
consider to be the three broad categories of web applications that
might be considered to have utility:

1. Apps that are inherently social and which let users better coordinate/connect with friends

This
first category includes applications that help people coordinate or
connect with friends or others in ways that are traditionally difficult
but which the social graph makes relatively easy and potentially very
powerful.  (These are distinct from "just for fun" games and
other playful communications in that they generally help people
accomplish something concrete.)  For example, these might be apps that:

• Help people organize local sporting event leagues
• Share travel schedules with friends (ala Dopplr)
• Organize carpooling
• Discuss and coordinate events / gatherings with friends (ala Skobee)
• Allow
  for the creation of affinity groups that require custom features not
  available in the traditional "groups" feature set (e.g. Alcoholics
  Anonymous groups, as humorously suggested by Max Levchin recently)

Because
of the inherently social nature of these potentially useful apps, many
of which involve inviting friends, some of them may have the potential
to have a viral coefficient of over 1. But they face a
big hurdle in sustaining a viral coefficient of over 1 for many
successive generations because (1) a large percentage of users get
value out of the app without needing to invite further friends, and (2)
although there may be a lot of people interested in the app and in
inviting all their friends, these enthusiasts are not socially
connected tightly enough to allow for the continued transmission of the
app across personal networks. For example, someone might
create a custom carpooling app and invite a lot of friends who are the
type of people who would themselves push it to many other friends they
want to carpool with, but because this social group may be socially and
geographically isolated from other groups of friends passionate about
carpooling, the app’s viral coefficient will fall below 1 as it hits a
population of people less interested in passing it on and its organic
distribution will rapidly exhaust itself before being able to reach
other interested populations – at which point few people will ever be
exposed to the app again.  And this is despite it being considered a very useful app by many people.

2(a).  Apps that aren’t inherently social, but which are given enhanced value with the social graph (non-business / work)

This
second category includes applications that may not be intrinsically
social or interpersonal (and therefore may exist independent of a
user’s social graph), but are those which gain additional value when
laid on top of the social graph. This includes apps that allow people to:

· Share news (e.g. a personalized Digg)

· Share
restaurant / service provider reviews (e.g. a personalized Yelp – so I
don’t just get undifferentiated restaurant reviews, but only those from
people I trust)

· Share bookmarks (e.g. delicious with all my friends)

Note that the three examples I’ve given already have canonical applications outside of Facebook. Despite
this, I think that the social graph offered by Facebook has a lot of
value to add in that would allow me to receive the recommendations
generated by these services through the trusted channels of all my
friends.

It’s
also noteworthy that all three companies did launch Facebook apps and
that none of them received more than a few thousand installs despite
their huge popularity and the extra value offered by Facebook’s social
graph. This is clear evidence of what I mentioned above about the systematic distribution bias against utility-based apps.

2(b). Apps that aren’t inherently social, but which are given enhanced value with the social graph (for business or work)

A
subset of this second category are apps that, while given enhanced
value by the social graph, are structured for work and therefore a bit
of an odd cultural fit for Facebook even though strictly they could
benefit from being inside the platform.  Examples include apps that allow for:

• Job seeking / networking
• Collaboration on work / documents

I
think it’s an outstanding question whether these are appropriate for
Facebook, but I’m skeptical they will ever be (just as I’m skeptical
Facebook will ever replace Linkedin for business networking). Just
because something can fit inside Facebook from a functionality
standpoint doesn’t mean it will fit the site’s culture, and culture on
social sites matters.

3. Apps that are neither inherently social nor benefit from the social graph (but are still "useful")

This
final category are web applications that are useful (like purchasing a
plane ticket, managing your finances, etc) but which don’t at all
benefit from the social graph. It’s clear these types of apps don’t have any business being inside Facebook.

So,
in summary, when I say "utility-based apps" I mostly mean apps that fit
in categories #1 and category #2a, but not those in #2b or #3.

Given this definition, should Facebook strive to be a social utility? Or should it just focus on what it’s clearly great at – personal communication and play?

To answer this question I’m first inclined to ask the more fundamental question, "do people want Facebook to be a utility?"

The
problem is that I’m not sure you can give a great answer to this yet,
since the biased nature of app distribution on Facebook means that most
people aren’t being exposed to utility based apps – so we just don’t
know yet how people would respond if these apps had widespread usage.

I think it’s possible that Facebook users as a whole just aren’t that interested in utility-based apps. But
I also think that a strong argument can be made that Facebook could be
a compelling utility (as evidenced by some of the examples I gave
above), and that the value of it becoming a true social utility is
great enough to justify aiming for this. From a business
standpoint, if Facebook wants to keep their core audience engaged
beyond college, attract an older audience that has never used Facebook,
and better monetize both groups, they’re going to do more than offer
fun ways to communicate with friends.

The
challenge, of course, is to figure out how they can give themselves a
legitimate chance of becoming a social utility with the current app
distribution problems I described above. Frankly, I’m not
sure whether the Facebook platform is the best way to achieve this, and
I personally think they would have been better off focusing on an
improved remote login API that allowed users to pull their social graph
into third-party sites and then pump personal data back into Facebook
ala FriendFeed, and that contrary to all the hype the platform may have
been a strategic mistake. But that is another story entirely…