Short Paper
Published: 13 March 2015
Tencent and Facebook Data Validate Metcalfe’s Law
Xing-Zhou Zhang
, Jing-Jie Liu & Zhi-Wei Xu 
Journal of Computer Science and Technology 30, 246–251 (2015)Cite this article
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Abstract
In 1980s, Robert Metcalfe, the inventor of Ethernet, proposed a formulation of network value in terms of the network size (the number of nodes of the network), which was later named as Metcalfe’s law. The law states that the value V of a network is proportional to the square of the size n of the network, i.e., Vn 2. Metcalfe’s law has been influential and an embodiment of the network effect concept. It also generated many controversies. Some scholars went so far as to state “Metcalfe’s law is wrong” and “dangerous”. Some other laws have been proposed, including Sarnoff’s law (Vn), Odlyzko’s law (Vnlog(n)), and Reed’s law (V ∝ 2n). Despite these arguments, for 30 years, no evidence based on real data was available for or against Metcalfe’s law. The situation was changed in late 2013, when Metcalfe himself used Facebook’s data over the past 10 years to show a good fit for Metcalfe’s law. In this paper, we expand Metcalfe’s results by utilizing the actual data of Tencent (China’s largest social network company) and Facebook (the world’s largest social network company). Our results show that: 1) of the four laws of network effect, Metcalfe’s law by far fits the actual data the best; 2) both Tencent and Facebook data fit Metcalfe’s law quite well; 3) the costs of Tencent and Facebook are proportional to the squares of their network sizes, not linear; and 4) the growth trends of Tencent and Facebook monthly active users fit the netoid function well.
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Author information
Affiliations
Institute of Computing Technology, Chinese Academy of Sciences, Beijing, 100190, China
Xing-Zhou Zhang, Jing-Jie Liu & Zhi-Wei Xu
University of Chinese Academy of Sciences, Beijing, 100049, China
Xing-Zhou Zhang, Jing-Jie Liu & Zhi-Wei Xu
Corresponding author
Correspondence to Xing-Zhou Zhang.
Additional information
Special Section on Applications and Industry
The work was supported by the Guangdong Talents Program of China under Grant No. 201001D0104726115.
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Cite this article
Zhang, XZ., Liu, JJ. & Xu, ZW. Tencent and Facebook Data Validate Metcalfe’s Law. J. Comput. Sci. Technol. 30, 246–251 (2015). https://doi.org/10.1007/s11390-015-1518-1
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Received
25 November 2014
Revised
17 January 2015
Published
13 March 2015
Issue Date
March 2015
DOI
https://doi.org/10.1007/s11390-015-1518-1
Keywords
network effect
Metcalfe’s law
cost
netoid function
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