There is an interesting dynamic that I wanted to highlight – the value of social media sites plateaus for individual users once the individual reaches a critical mass of content.

Have a lot of friends? Good luck trying to follow all of their twitter streams or their postings on Facebook. The overflow of content produced by the masses has diminishing marginal returns. The next tweet a friend makes will either be lost or push another tweet off of the first page of the queue. There is no way to consume all of the content presented to us, leaving the value of these services to plateau in their current form. Scouring the postings on Craigslist is a pain and so is trying to find a contact in LinkedIn whose name I can’t remember.

Consumer driven websites often need to rapidly scale their businesses to create network effects and grab market share. Getting big quickly was key for old-timers like eBay and Craigslist, and has been critical for new comers like Facebook, LinkedIn and Twitter. Network effects play an important role for all of these companies, as they scaled it became increasingly difficult for other players to challenge them.

While the amount of nodes (users) in the network gives the company the benefit of barriers, the amount of content that these users create can give the company the burden of clutter. Internet users are creating an astounding amount of content and for some of these Internet darlings this can create a big problem.

To be clear, this isn’t a knock on these services. They generally create a huge amount of value for an individual before they plateau. They do plateau, however, and that’s unfortunate.

This begs the question – what can these companies do to ensure that their services don’t plateau (or at least plateau less)? Ultimately it comes down to sorting data as granularly as possible (e.g., by person, by topic or by group).

Interestingly, ecommerce platforms do not appear as affected by the clutter issue as they can easily use directories and other sorting mechanisms to help users navigate the excessive amounts of data. Ecommerce sites can leverage the objective nature of the product characteristics or descriptions ot create these hierarchies. Social media sites, however, often have more difficulty structuring the data as categorizing user generated content is often based upon subjective characteristics.

So, what should these companies do to solve the clutter problem? For now, they’ll use sorting features to Band-Aid the problem. In the future, I suspect that more intelligent engines will help prioritize content in these streams for the users. The problem is growing and as always, I suspect hundreds of tech wiz-kids will emerge with new ways to solve the problem.