Metcalfe’s law states that the value of a telecommunications network is proportional to the square of the number of users of the system. The analogy that Wikipedia uses is that “a single fax machine is useless, but the value of every fax machine increases with the total number of fax machines in the network, because the total number of people with whom each user may send and receive documents increases”. Prima face, this looks pretty accurate and logical.
But, does the presence of a fax machine on the network of someone whom I have never contacted, nor will ever contact really increase the value of the network to me? The answer is no. Infact, the argument can be made, that it actually is harmful to me because I’m sharing the same network resources.
I believe the value of a communication network to an individual is proportional to the number of users that connect to the network, but limited by total number of users that the individual would ever (past and future) utilize the network to communicate with. Furthermore, unless networks can utilize the large number of people connected to it to provide a service other than simply connecting, the benefit to an individual user is maxed out when all of his acquaintances are connected to it.
For example, once everyone whom I would ever Facebook is connected to me, the value of the network to me taper off unless Facebook can utilize the rest of the network (that I’m not interested in connecting with) to somehow create value for me.
What this means, I’ll leave to someone smarter than me to interpret.