I read today on ReadWriteWeb that Facebook is updating the way application notifications work. This is from the Facebook developers blog:

To improve the Facebook Platform user experience and to reward compelling applications, we will be rolling out a feedback-based system that allots notifications in proportion to user response. Applications will no longer have a static upper limit of 40 notifications per user per day. Instead the number of notifications per application will be based on a range of factors including the rates that users ignore, hide, and report notifications as spam.

The new system aims to provide users with more compelling notifications and fewer notifications that they are likely to ignore or consider spam. We hope this change incentivizes developers to improve the quality of their notifications and encourage their users to send notifications to interested friends.

This is interesting for a couple of reasons.  Firstly in a week which also saw Myspace launch their developer platform (read about it on Mashable) it is becoming clear that socnets are seeking competitive advantage through the quality of platform they make available to developers.  Some numbers for you which prove the point – there are now nearly 15,000 applications on Facebook, and getting on for 1,000 on Bebo.

Q. Why are socnets adopting this strategy?

A. Because they want to give their users more things to do, to keep them on the site longer and hence drive more page views and revenues.  They are emulating the success of Facebook’s application platform.  It is as simple as that.

But the very fact that all the leading socnets have application platforms in play changes the game.  Having one is no longer sufficient – it now needs to be the best one.  The socnets are now competing with each other for developers.  The site which developers build the most apps for will ultimately have the richest offering for end users.  The dimensions they can compete on include size of audience, quality of API, support for Open Social (i.e. portability of app), business model and platform features.

This piece from Mashable on the Myspace platform shows how they are setting out their stall in this regard, and the announcement from Facebook which I quoted from above can be understood in the same light.

The second interesting thing about this announcement is that it indicates Facebook has reached an important moment in its development.  Socnets can be thought of as emergent systems i.e. they are communities with dynamic systems of rules and behavioural norms.  They grow quickly when the balance of the rules is marginally in favour of growth, but they can quickly stop growing and even die if the balance changes, either because it shifts in favour of the negative, or it shifts too overwhelmingly in favour of the positive.

This latter is what is happening on Facebook.

Back last April or May when they launched their application platform they shifted the feeback balance markedly in favour of the positive – all of a sudden a lot more was happening in our newsfeeds and we were given a lot more reasons to go back to Facebook.  Happy days, and the site experienced rapid growth.  But now, as the number of applications has mushroomed and the app developers have got more sophisticated at working the Facebook system, we have all found ourselves overwhelmed.  There is too much noise and people are disengaging from the system.  The feedback loops are skewed too far to the positive.  The Facebook folks get this and are tweaking the way the newsfeeds work to get back to a healthy marginally positive balance.

This is all theory culled from Steve Johnson’s Emergence, which I have written about in detail before here (check out this post for a case study of how Slashdot evolved their feedback systems to maintain their growth).

This is a critical moment for Facebook because it looks like the existing rules and behavioural norms are starting to break down – which suggests that without changes their growth might start to falter.  They are clearly live to the issue, but whether the tweaks they make will be successful is another matter.  As I think about investing in socnet application businesses I hope that they will be.