Have you ever seen the old Fabergé shampoo commercials? The commercials featured an actress talking about how she used the shampoo and then told two friends. Those two friends "told two other friends and so on and so on." The idea here is that the love for a product can spread by word of mouth at an exponential rate.
That's pretty much the idea behind the viral expansion loop. It's a marketing term that's been around for a few years. It describes the phenomenon of how a product or service can experience exponential popularity over a short amount of time. While any product, service or even idea can experience this kind of growth, these days you'll see the term used in reference to Web sites and services.
Adam Penenberg, a writer for the magazine Fast Company, reported the use of the phrase in 2008 in a story on a social networking service called Ning. Ning lets you join and create networks around topics, activities and interests. It's the brainchild of Marc Andreessen, one of the creators of the Web browser Mozilla, and Gina Binachini, former president of Harmonic Communications. Penenberg interviewed the co-founders and introduced the phrase to the world at large. The term itself had been around for a few years -- the story in Fast Company simply gave it a wider audience.
Not everyone cares for the term. Rafat Ali of paidContent.org goes so far as to call viral expansion loop a case of "magically minted words." Ali says that the phrase was invented as part of an effort to boost visibility of Ning. Ali's point is that the concept of the viral expansion loop has been around for years and is better known as a combination of the network effect and viral marketing. In other words, the term doesn't add anything to the conversation about how to market a site -- it's just a series of buzzwords meant to inspire venture capitalists to hand over some cash.
Is that a fair assessment? Could it be that the phrase has more substance to it than as a clever marketing pitch? Or does Ali have a point?