Internet companies | Social graph-iti | Economist.com

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Facebook might nonetheless be suited for other sorts of marketing. Reuben Steiger, the founder of Millions of Us, a marketing agency for social networks and virtual worlds, says that brands need to design “experiences” that use the social graph to engage groups of friends. If a wrestling association, say, wants to drum up ticket sales for an upcoming bout, it could build a widget that turns users into wrestlers and lets them fight bad guys and win gifts, while making them aware of the brand and the match.

But that possibility hardly justifies the sorts of valuations bandied around for Facebook and other social networks. Such valuations, indeed, may reflect a misunderstanding of the social graph. For bigger companies such as Google, the graph is simply the web of links among its many users. It can be used to make existing services more useful. But Google increasingly views such utilities as “features, not products,” says Sergey Brin, its co-founder. Facebook, like many hot start-ups in Silicon Valley, has some fantastic features, but maybe not much more.

Internet companies | Social graph-iti | Economist.com