In the lecture this week we discussed the ego online, the rise of social media and the digital performativity that is so prevalent in society today. During our discussion group we also discussed the monopoly american tech giants hold and the concept of digital colonialism. Especially seeing the statistics of how the majority of the services we use are from the United States got me thinking about our own local digital medias, and how more often than not they end up failing or dying out.
This brings me to my research topic of today, the Netherlands’ very own big social media phenomenon: Hyves.
Hyves
For those unfamiliar, probably anyone who is not Dutch, Hyves was the Netherlands’ first and only big social media site. Founded in 2004 Hyves was started as a photo sharing website, much like Facebook. What made Hyves so popular was that it was very user friendly. Users did not need any knowledge of HTML to create their profile, they simply had to fill out some questionnaires and add some photos to their profile.
Hyves started out with a small userbase of mostly friends and family, but through their clever use of employing students from Amsterdam the site managed to gain more traction in popularity because students are good ‘connectors’, a term coined by Malcolm Gladwell to describe people who are sociable, gregarious, and are naturally skilled at making — and keeping in contact with — friends and acquaintances.
After using their connections in the student unions Hyves implemented another feature that caused the userbase to grow exponentially: A button that allowed users to invite every contact from their @hotmail.com account to Hyves.
Hyves grew exponentially after that, and in 2007 it reached 5 million accounts, as well as becoming the most visited webpage in the Netherlands, even beating out Google.com!
To say that Hyves was a cultural phenomenom is an understatement. Growing up around the time when Hyves was at its peak I can tell you it was all the rage. And in my opinion way more fun than facebook. Hyves didn’t only let you share pictures or posts to your timeline. You could customize the whole look of your page, from the background to the banners and text boxes. You could upload songs and playlists from YouTube to create your own atmosphere.
It is my belief that Hyves did everything right, it was fundementally a nice platform to use, an easy way to connect with the people around you, and it was FUN. But why then is it not around anymore? That is because Hyves was in direct competition with Facebook, and as we know, that’s not an easy fight to win.
The Fall
In 2009, after the global financial crisis, the Netherlands also was thrust into what we call the “credit crisis”. This had a major impact on the profitability of online advertisers, those same online advertisers that made it possible for Hyves to run their website at a profit. Through the loss of advertiser revenue Hyves had to find a new way to come up with money, and one such way to do that is sadly to join a larger media group, in this case Telegraaf Media Group. The downside of joing a big media group is that Telegraaf didn’t see the same inherent social value in Hyves, instead it was mainly just an investment, one they paid 43 million euros for. This investment however did not pan out.
Slowly and surely Facebook started to take marketshare from Hyves, and by 2011 Facebook had surpassed Hyves as the prime social media platform in the Netherlands. The Silicon Valley tech giant had bested the homegrown hero Hyves.
The final nail in Hyves’ coffin came when in 2012 their parent company Telegraaf Media Group had to deduct 36 million euros in goodwill. Goodwill is a term in economics that denotes the part of a companies market value that is not measurable in tangible assets. So when TMG in 2009 paid 43 million euros for Hyves, that 43 million included a large part of goodwill: value that was attributed to the potential (and expected) growth of the company through connections, knowledge, and cultural foothold. When you acquire a company with such a large sum of goodwill you are expecting the company to grow and profit to increase, but for Hyves that increase did not come. After already being hit by the national credit crisis cutting advertisement revenue, and now also being overtaken by their American competitor, Hyves simply was unable to meet the profit expectations that were set by the goodwill placed on them by TMG. And so in 2012, when TMG deducted their invested goodwill from the books, this left Hyves in significant negative value. This was the final nail, and Hyves had to close up shop. The head office was put back on the market, and on December 2nd 2013 the website was officially shut down.
Moral of the story
To summize, I don’t think Hyves did anything particularly wrong. It was a good platform, people loved it, and everyone and their mother had a page. But in this particular case, David was unable to beat the Goliath that is Facebook. I think it is impressive Hyves held out for as long as they did, and I wish we could see a return of similar local social networks, because Hyves truly was a cultural staple in the Netherlands, right up to the moment when it died.
This brings back memories! I vividly recall coming home from school and logging into Hyves on our family computer. Being quite young and not yet familiar with English, having a user-friendly platform in Dutch opened up the internet for me in a way that felt accessible and exciting.
It makes me wonder if a platform like Hyves could ever emerge again. These days, it seems that new technological advancements only succeed if backed by massive investments from established companies willing to absorb initial losses. Hyves’ rise, I assume, was largely due to the absence of dominant competitors at the time—a situation that feels almost impossible in today’s internet landscape.
That said, there might still be room for a groundbreaking idea that no one has thought of yet. Let’s just hope that, if it happens, it won’t be immediately swallowed up by one of the tech giants