For this article, I am diving into my time as a teenager, a time even before Facebook. Many Dutch students will know Hyves. Hyves was a social networking site in The Netherlands with mainly Dutch members. It was founded in 2004, and in 2010 it had more than 10.3 million accounts, including my account (and also including double and inactive accounts). But, Hyves was competing with other social networks such as Facebook and MySpace and in 2013, the social network was officially discontinued. How did this happen and what could have prevented this?
As you can see in the graph below, Facebook gained more members than Hyves in 2011. However, in 2012, the buzz around Facebook exploded. More and more Dutch people started actively using Facebook and neglecting Hyves. But why did Dutch people stop using Hyves? The answer is simple: Facebook was an international oriented social network and Hyves was only active in The Netherlands. People with international family and friends soon started to switch from Hyves to Facebook which resulted in more people switching. This created a continuous cycle of people leaving Hyves which eventually resulted in the discontinuation of the social network.
Average number of daily posts/messages on Facebook and Hyves in The Netherlands.
To apply this to the discussed theory during the lectures, Facebook faced huge positive network effects and the network effects of Hyves were way smaller because of the limited scope. With network effects, more users mean more value which then means more users and so on. Once the buzz around Facebook exploded, nothing could have stopped the increasing usage of Facebook and therefore the decreasing use of Hyves.
But was there anything Hyves could have done to prevent this? One solution could have been to expand to other countries sooner. In 2010, Telegraaf Mediagroep bought Hyves for €43 million with the purpose of expanding the social network. However, this was already too late and the investment turned out to be a terrible investment. If they had decided to expand earlier, this may have prevented Facebook from getting so big but I doubt that this would have worked.
For those who are curious about what happened to Hyves after the discontinuation, it is now called HyvesGames. The name already makes it clear but nowadays, you can play games on this website.
Sources
Drees, A. (2013). Facebook versus Hyves dat is schrikken. Recruitment matters. Retrieved from http://recruitmentmatters.nl/2012/01/24/facebook-versus-hyves-dat-is-schrikken/
Jaarsma, R. (2012). Wat leren hyves en myspace ons over sociale netwerken. Sync. Retrieved from http://sync.nl/wat-leren-hyves-en-myspace-ons-over-sociale-netwerken/
Weidema, N. (2017). HR en social media maken organisatie wendbaarder. PW. Retrieved from http://www.pwnet.nl/organisatie-strategie/nieuws/2017/9/hr-en-social-media-maken-organisatie-wendbaarder-10125266
Wokke, A. (2013). Hyves gaat definitief offline. Tweakers. Retrieved from https://tweakers.net/nieuws/92928/hyves-gaat-definitief-offline.html
Hey Francine,
Great article! I indeed used Hyves as well, it was a great social network and I think at the time even better (more personal) comparing to Facebook. I believe that having your own page with music, a blog, own make-up and the well known ‘krabbels’ added a lot of value to the profile comparing to the current Facebook profile. Maybe internationalization could have saved Hyves but I think the internal market of the united states in combination with an English site gave Facebook a gigantic head start anyway.
But I have a question, during college the professor told us about negative network effects and I am wondering if the continuous cycle of people leaving Hyves is also an example of a negative network effect?
Hi Francine,
Interesting article, I remember using Hyves all day! I do get your point of the network effects and that Facebook had international users. However, for me, and a lot of my friends in my teenage years did not have any international friends to add on Facebook!
What I feel also plays a role, is that people get bored by a social platform after a while. We have seen it with Hyves, we have seen it with Partyflock and MySpace, and the same is already happening to Facebook and Instagram (Murgia, 2017).
The strategy of international expansion won’t work for them since they are already active worldwide, so I am curious to know what would help them stay alive.
Reference:
Murgia, M. (2017). People are getting bored of Facebook and Instagram, study says. [online] The Telegraph. Available at: http://www.telegraph.co.uk/technology/2016/06/07/people-are-getting-bored-of-facebook-and-instagram-study-says/ [Accessed 5 Oct. 2017].
Ah, back in the day when everything was more simple. This article is making me feel very nostalgic. I do agree that great same side networks effects was what eventually lead people from Hyves to Facebook. I distinctly remember that when I was in high school (a long long time ago), hardly anyone had a Facebook account. However, after graduation, many of my fellow students (including myself) took a gap year and went abroad. Meeting and befriending internationals, we quickly became aware of the limited scope of Hyves and decided to create a Facebook account. Because of the similarities between Hyves and Facebook, multi-homing was not a thing. Within absolute no-time, it felt like Hyves was obsolete. It’s strange to think how something that once was all the rage and basically had a monopoly in the Netherlands, was wiped away so quickly. It really stresses the importance of network effects.
How generalizable is the Hyves case? It’s crucial to understand that what happened to Hyves is not blindly applicable to other localized, country-specific social networks. Around the world there are a number of localized social networks with sizeable rewards. Take for example China, where the blocking of Facebook and Twitter, has given rise to homegrown social networking sites. These sites are often hybrids of different social networks. QQ, WeChat and Tencent have integrated instant messaging, video calls, photo sharing and status updates in one platform, combining functionalities of Facebook, Twitter and Whatsapp. China’s most popular social network is probably Sina Weibo, a microblogging website. In contrast to Holland, China has many competing social networks. The reason for this are China’s regulatory and censorship hurdles, which pose barriers for global social networks to enter the Chinese market. Contrarily, government-mandated internet censorship is practically non-existent in Holland. On another note, Russia’s biggest social network is VKontakte, another homegrown website that combines functionalities like the news feed, photo filters, hashtags and music and video storage. These localized social networks are better able to bypass cultural challenges. Country-specific networks enable users to communicate in their native language and to respond in real-time, since there are no differences in time zones. Therefore, these country-specific sites are better able to tackle local knowledge and sensitivity. In conclusion, not ever localized social network is destined to fail.
Hi Francine,
This is indeed an interesting topic. It is a great example of what we talked about in class. I also had a Hyves account, but I think I already stopped using it before Hyves was discontinued. The thing I am curious about is whether the same thing will happen to other social media platforms like Facebook, Instagram or Snapchat. It is often said that once the older generation enters the platform (e.g. parents, grandparents) the younger generation moves on to a newer platform. This is what partially happened to Facebook, many of its members started using Instagram and eventually Snapchat. The article I added talks about the user groups between the age of 12 and 17 and 18 to 24. This group is turning to Instagram and Snapchat. However, as Instagram is owned by Facebook this problem seems not too significant. What do you think will happen to other social media platforms? Will they stay in business or will other platforms take over their members?
https://www.businessinsider.nl/facebook-losing-teen-users-faster-to-instagram-and-snapchat-2017-8/?international=true&r=UK