Famous Wall Street trader turned writer, Nassim Nicholas Taleb describes a Black Swan as:

an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable. I stop and summarize the triplet: rarity, extreme impact, and retrospective (though not prospective) predictability. A small number of Black Swans explain almost everything in our world, from the success of ideas and religions, to the dynamics of historical events, to elements of our own personal lives.

After reading his book, The Black Swan, I am convinced that Facebook is a Black Swan.  Its success as a “social utility” has gone beyond what anyone would predict from previous online community of users.  Facebook has invaded our daily lives first as a connector between people but now as a connector between people and things in the world.  Of course, now it seems so obvious the value that Facebook brings people and why it would succeed MySpace as your online identity of choice — it’s about privacy control and mutually accepted connections.  

More than many other companies, Facebook is playing a big role in the success of ideas as it becomes a hub for spreading them through its node — users.   This Black Swan as a “community of users” had already been overlooked or at least undervalued by many other companies — Yahoo and Viacom among others.  Nobody would have guessed how many users Facebook would get.

I wonder now whether Google still is underestimating Facebook and lulled into complacency by its own success.  Every quarter, search volume goes up and Google’s ad revenue from AdWords climbs higher.  People in general are increasingly using Google to find stuff.  But this is no different than Taleb’s example of the turkey, which everyday feels safer and gets bigger as it looks at the past for confirmation that the human master is feeding and taking care of it; however, one day after many days of growth, the turkey will be killed.  

In fact, more and more sites report more traffic now coming from Facebook than from Google.  These reports certainly have put Google on notice, and I wonder how the folks in Mountain View will try to turn this Black Swan into a White Swan for them.

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