Can Facebook Groups Support Its Deals?

Facebook has only seen 50 million Groups created after six months. CEO Mark Zuckerberg has called grouping friends "the biggest problem in social networking." This is the secret sauce in Deals?

Facebook CEO Mark Zuckerberg has called grouping friends "the biggest problem in social networking." It's no wonder: With roughly 600 million users, Facebook is more crowded than a Bangladesh train car. The average user has 130 friends: college roommates, childhood friends, distant family members, coworkers, the occasional barroom acquaintance. Classifying all those users has been a huge problem for Facebook, so in October, it launched Facebook Groups, an algorithmically driven feature that auto-suggests groups for you.

Fast forward to today, and Facebook is heralding the feature as a success. "In the six months since our launch, people have created over 50 million Groups on Facebook," wrote Groups team engineer Elliot Lynde in a blog post. "It's grown quickly because of its social design." Lynde likely had the privilege of seeing around the corner. Groups looks a lot more promising when coupled with the new Facebook Deals, launched today. 

But prior to that component, it was unclear how successful Facebook Groups had actually been. With increased competition and a vague adoption rate, it's not apparent whether Facebook is gaining a foothold in the growing space of niche social networking.

Before, Facebook attempted "naive solutions" for creating groups on Facebook, namely by asking users to create lists of friends on their own. According to Zuckerberg, this solution saw less than a 5% adoption rate, which is why the company introduced Facebook Groups. Yet with 50 million groups created so far--in six months, mind you--that would mean that, at most, only about 8% of users have created a group--barely an increase from October. And that's assuming 50 million users created one group each; it's likely a number of users created more than one group. Thus, perhaps only 25 million users have created two groups each, or even less created three, four, or five. The "50 million Groups" figure is vague at best. Facebook only specifies that "people have created over 50 million Groups on Facebook." The company neglects to acknowledge the number of active Groups users. 

Until today, an ever-growing list of niche social networks have mostly assumed Facebook won't be able to get Groups right. On Path, for example, the social network limits users to 50 friends, creating a far more intimate environment to share photos online--Instagram in many ways has the same benefits. One of the hottest startups at SXSW, GroupMe, has become hugely popular for creating small groups for exchanging direct messages. And the average user on check-in service Foursquare has just five to eight friends. Why? Because users like to share their location with only their closest friends--just as they would with their personal information, photographs, and messages.

“[Averaging five to eight friends per user] is great, because it is so much lower than the Facebook number," Foursquare CEO Dennis Crowley recently said. "That is what we want. Facebook is like everyone you have ever made eye contact with in your entire life. Foursquare is the people you see at a bar and don’t avoid.”

The point is that Facebook has not been able to get Groups right. It added a slew of tweaks today, including integration with Questions, the ability to upload photo albums directly to a particular group, and the option to "Send" an article or video to a subset of friends rather than simply clicking the "Like" button.

But the question still remains whether the world's largest social network can ever accomplish niche social networking--and propel Deals beyond competitors such as Living Social and Groupon. Sigh. The pains of having 600 million users and being worth billions of dollars.

[Image: Flickr user Anirudh Koul]

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