Facebook's Power, and Its Weakness.

Witness the power of Facebook. About a month ago, one of the social networking site's users set up a discussion forum titled ''No I will not pay $3.98 a month to use Facebook as of July 10th 2010!'' Within a few weeks, more than 825,000 people had joined the page. Trouble is, the whole thing was based on a faulty premise: Facebook has no such intention to charge. This perfectly illustrates the so-called network effect that is both Facebook's greatest strength, and its potential Achilles' heel. In its most positive iteration, the network effect works like this: the more people who join Facebook, share their information and make friends, the more compelling the proposition becomes. This creates a virtual barrier to entry in a business where conventional barriers should, theoretically, be very low. [ABSTRACT FROM PUBLISHER]