With over $7.8 billion in 2013 revenue, as well as 757 million daily active users and 1.2 billion monthly active users, Facebook so thoroughly dominates Twitter that if it's Coke, its rival isn't Pepsi, it's homemade bathtub cola. Compared to Facebook's numbers Twitter's $664 million in 2013 revenue and 241 million monthly active users seem cute -- like a Little League player showing Barry Bonds a video of an infield single.
Facebook has grown so big that it's no longer a question of if you want to be there, you pretty much have to be there. You may not like it, but the social media giant is where babies, weddings, and oddly enough, deaths get announced, where reunions are planned, and where everyone from your boss, to your mom, to your high school sweetheart expects you to be.
By sheer user volume Facebook has become hard to compete with. This has allowed the company to essentially do whatever it wants whether its users like it or not. That has led to a social media site crammed with ads, which has turned off many users who stay because anyplace else they could go would leave them in the online equivalent of a ghost town.
There have been some niche social media successes -- LinkedIn (NYSE:LNKD) has carved out a space for job-seekers and career-related networking -- but attempting to take on Facebook would be like Fiji invading the United States. We might not notice at at all, and if we did, we'd have to get the Army to stop laughing before it sent a few people armed with rubber bullets to rebuff the attack.
Still, giants can be toppled and social media audiences have been transient -- as any veteran of MySpace or Friendster can tell you. That's why Ello -- a very simple, stripped down social media network that has been gaining traction -- may have a chance.
What is Ello?
Ello is a Facebook-like site with no ads and whole lot less clutter. Members get to invite five friends to join, which is how I became a member (though I have not used the site other than to test it for this article). When I joined, Ello, greeted me with the following text.
Hi @dankline. Welcome to Ello, a simple, beautiful & ad-free social network.
Ello's minimal design puts emphasis on high-quality content, and makes it easy to connect with the people you really care about. Ello does not allow paid ads, and will never sell user data to third parties.
The site has two categories -- "friends" and "noise" -- where you can follow people you know or set aside content you like from people you don't. Ello is still in beta, which explains some missing or coming soon features, but it looks sleek, and some of the "noise" content was interesting.
Its founder, Paul Budnitz, explained his vision in an email to TechCrunch.
Most of the excitement we're experiencing comes from a combination of Ello's simple & elegant interface, and the fact that the network will never have ads. Without ads, we are free to design features for users first, without advertisers in mind. We also don't sell data, and even offer our users the option to opt-out of analytic tracking of their sessions when they use the network.
Ello has a long way to go
Not being Facebook will only get you so far. Ello's biggest challenge is that even if it manages to sign up the tens, if not hundreds of millions of users it needs, it has to worm its way into the collective consciousness and become something people check multiple times daily. More importantly, Ello needs an interface that's intuitive and its current design is most certainly not. It's easy to post on Ello, but finding friends and searching for specific content is not. By launching as an unpolished beta, Ello may blow its goodwill.
People may have their problems with Facebook, but they know how to use it. It's one thing to get people to sample Ello and a much bigger thing to get them to integrate into their lives.
Blowback is inevitable
Marketing your company as the good guy, the business that only cares about customers not dollars, means walking a very narrow tightrope. Since Ello is not a nonprofit, no matter how good its intentions are, it eventually has to monetize, and even that vague future promise has already turned off one major supporter. Aral Balkan, an author and designer, was approached by Budnitz in May to advise the Ello team. He participated in a few Skype calls, but has since posted an online rant about the site saying he was "leaving you for your own good."
Balkan left because he is upset that Ello took that $435,000 in seed funding from FreshTracks Capital. His logic is that venture capital means needing an exit strategy, which means having to value profit over people. Never mind that Ello has not done anything to compromise is no ads, pro-privacy mission, but it might have to because it took money, so Balkan is out.
That is exactly the type of backlash that's to be expected when a company bills itself as holier than thou.
It's not going to work
Though Ello has created a bit of a buzz, Facebook has little to fear for the moment. Ello can't be a Facebook alternative for the masses because it can't pull enough people in fast enough. Where it can succeed is the niches and areas where Facebook fails.
The social media leader, for example, requires people to use their real names in their profiles, which has alienated the small but active drag queen community. These individuals use alternate personas and the most prominent drag queen, RuPaul, has spoken out against Facebook and touted Ello as an alternative.
Facebook itself did not start as the behemoth it is today. It grew from one college campus and slowly morphed into a broad interest platform. For Ello to work it needs to downscale its ambitions and target communities disenfranchised by Facebook. To truly disrupt Facebook, Ello will have to operate in the margins and grow slowly, otherwise it risks being yet another fad that went viral then disappeared.
Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends Facebook, LinkedIn, and Twitter. The Motley Fool owns shares of Facebook, LinkedIn, and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.