What Facebook and Google Can Learn From Thomas Edison and Alexander Graham Bell

by adam on June 28, 2009

Battles between standards are nothing new, but ever since the dawning of the world wide web, there seems to be more and more of them as they ever become more fiercely contested.

Take the case of the telephone greeting (eventually standardized by Thomas Edison) as follows.

…when telephones were equipped with bells ato announce incoming calls, the more pressing issue was hot to answer the telephone. This was a touchy issue; in the 1870’s it was considered impolite to speak to anyone else unless you had been introduced! In 1878, when Edison opened the first public telephone exchange (in New Haven, Connecticut, on January 28, 1878), his operating manual promoted “Hellow!” as the proper way to answer the phone. (”What is wanted?” was noted as a more cautious alternative.) At the same time, Alexander Graham Bell, the inventor of the telephone, proclaimed that “Ahoy!” was the correct way to answer the telephone. By 1880, “Hello” had won this standards battle. This is an early example of how control over distribution channels, which Edison had through his manuals, can lead to control over interface standards.

Source:Information Rules: A Strategic Guide to the Network Economy

As evidenced by Edison’s triumph over Graham Bell, it isn’t always the creator of the platform that has the power to dictate it’s standards. Rather, it is the person who gains control over the distribution channels who gains upper hand.

Another more relevant example of this is the case of PayPal vs. Ebay in the late 90’s/ early 00’s. While Ebay controlled the platform, PayPal was able to better leverage distribution channels (such as email) in addition to providing better fraud protection and security.

Fast forward to today where there are a plethora of standards battles raging across the web from Web Services (SOAP vs REST) to Site Syndication (RSS vs Atom) to Universal Login (Facebook Connect vs OpenSocial vs OpenID etc).

Similarly the battle to control users’ “Social Graph” is being fought between Facebook and Google et all. It will be interesting to see who comes out on top here since both companies have access to very large, yet different distribution channels.