facebook

I just read an article on wired about how Google is not doing very well monetizing social networks (synopsis: traditional Google ads don’t work on SNs). It’s a quick read and doesn’t say too much other than hinting that someone thinks there is an answer - but it’s a part of a very interesting problem. Despite the fact that social networks do a great job of getting users and keeping users on their sites for extended periods of time they haven’t really figured out the best way to turn users into dollars.

I won’t pretend to have the answer and I think it is different depending on the type of social network - a network that includes localized content obviously has different monetization opportunities than a network that has a more generalized focus. However, it seems to me that the focus really isn’t in the right place. Text ads work on search because they are almost the exact same thing a person is looking for when they do a search - if you’re searching you’re looking for links to relevant content, and that’s what text ads provide. When you’re on a social network you’re looking for information about people and things you care about. That’s not as easy to monetize - you can’t expect one of your “friends” to pay so that their photos are given priority over another one of your “friends.” It’s tough because you don’t care who views your content on most social networks that aren’t for businesses. This changes when you either have a social network that people are using for business, or when you let others develop on your platform. Let’s face it - I hate platforms - but I also think they might just be the best way to monetize social networks.

When facebook added the developer network and then the app platform they created something that they can get businesses to pay for. It’s all free now, but if Facebook charged fees for setting up apps, fees for premium placement of apps, a fee per user, or any other fee based on their apps platform - companies (and some people) would pay it. The true value of facebook NOW is it’s ability to expose new ideas to a large audience. You can’t monetize the content created by individuals for their “friend” individuals - you can monetize providing companies access to a huge network - and I won’t be surprised to see it.

But… what do you think?

I know… I’ve been a little harsh on Facebook in recent post on the book, but there’s something wrong with the whole apps concept. I think it benefits Facebok immensely, the app developers slightly, and overall hurts the web.

The future of the book.
Probably the best benefit to Facebook is that it no longer has to deal with the vicious cycles that come along with being trendy. Instead of putting out ‘cool’ products and new features on a regular basis it looks to the community for the work, and it reaps the ad revenue and traffic benefits. Nice work if you can get it. Eventually, it will likely make sense for Facebook to begin charging its largest developers a hosting fee for their apps and give them some sort of premium placement in exchange - essentially charging app developers to do the work for them. Pretty smart, right.

The future of the apps.
This picture isn’t as pretty for apps and their developers. For some app developers success will come, but those will really only be those that can put out a large number of apps, and add to their collection on a consistent basis. The one-off developers (the majority) are the ones that get lost in the shuffle. As I see it, the product cycle of a FB app compared to a web app looks something like this:

Crude, I know… but I think it illustrates my point. The hot-now apps are now the ones exposed to the ‘fate-of-a-trend’ life cycle. They are enticed by the early rush, but are left with little to show for it before long. Facebook has a huge user base to expose your app to, but really all that does is speed up your product life cycle. It’s quicker to start, but also quicker to die. The users don’t care about the individual apps, they care about a steady stream of ‘hot-now’ items. And as long as new apps come out to replace the dying apps, the book maintains its stance.

Should I care? Maybe not. But, I generally dislike this trend of large companies acting as lords over the smaller. It’s a strange re-ordering of web power that’s taking place right now, and I for one, will not be creating facebook apps.

Web 2.0 is over… in case you weren’t aware… and I think Facebook killed it. Facebook has been the talk of the web since it launched the developer platform, and continues to steal headlines with its ridiculous valuations and ad network that is a little too perfect. These things have changed / are changing ways in which we use the web, and I’m pretty sure it is for the worse.

I was getting ready to write a post on Hulu and Facebook and how the tide has turned into a state in which we are seeing the potential of the web being realized… then I realized how far off I was. Facebook hasn’t revolutionized the web, it has stifled it. I remember not long ago always reading about new independent startups coming from all over the globe… now I hear about Facebook, Google, Microsoft, and efforts like Hulu that are born out of corporations not individuals. The swing hasn’t taken full effect yet, but while the world is applauding the brilliance of Facebook developer platform and Google’s “Open”Social, I’m a little scared. This is a serious detraction from innovation. Instead of trying to build the next great website the developer community seems to be focused on building the next great Facebook app. That’s a big problem. As a result of Facebook platform and the notion that, “you don’t have to build a network, you can just use Facebook’s,” I think we at the beginning of a downward spiral in terms of independent innovation.

And now Google has entered the game with its “Open”Social. A platform that masks itself as open when all it really does is steer developers away from developing for the web and into developing for large corporate sites. Developing for social networks rather than for the web does little to drive real innovation. What it really does is perpetuate the success of sites like Facebook and gives the developers of the insignificant parts of the whole a false sense of accomplishment.

When I think of what Web2.0 was, I think of big-eyed independent entrepreneurs out to change the way the web worked… not followers out to build a little piece of a big site. I think back to the early days of del.icio.us (before it was purchased and entered into the unfortunate life cycle of a corporate product) and the first time I used Digg (a product I openly hate, but did respect), and I wonder when we will see innovation like that again. I don’t know when it will be, but I do know that it won’t come from a Facebook app.

Facebook is not the internet, it’s a part of the internet. Your Facebook app is a part of a part, that seems pretty insignificant to me. The web needs innovation, challenge, and a ton of voices… if we just develop for a handful of large companies (and only use the services of those companies) the power of the internet is lessened. We need more independent developers and leaders, and less followers. Platform is not a buzz word it’s a death knell. Of course, I’ve been saying that web 2.0 was ending since January 06… so maybe I’m wrong.

This one comes solely from the high quantity of searches that have been getting people to my site since Facebook Apps launched. The queries in question are things like: “facebook gmail” or “get gmail in Facebook” - as many of these as I see a day, I think it’s fairly clear that people would like to read their email through a Facebook app. I haven’t looked enough at the Facebook platform documentation to know if this is possible, but I can’t really think of why it wouldn’t be - other than it would appear to have a point to it, and I think it may be a requirement for Facebook Apps that they all remain useless.

Thoughts? Is anyone doing this?

What I think is most brilliant about Facebook’s openness is the branding behind it. Really. I haven’t heard this mentioned and maybe it’s an unintended consequence, but this move really switches Facebook from being a “Cool” brand to a “reliance” brand. The sustainability of the brand greatly increased through this initiative… and Facebook didn’t have to do that much.

If you’re not familiar with FB apps the elevator pitch goes something like: people build applications that run completely within facebook. This exposes the app to a huge number of users and takes advantage of the viral nature of facebook. It’s working very well for some - for example, iLike has more people using the site on FB than on the iLike site.

So I know what you’re thinking - if it’s all about the third party apps how does that boost FB’s brand? I’d say that there are two ways. First, the creators of the apps will be pushing big time for them to spread on the site. This is what I mean by switching to a reliance brand. It’s no longer just cool. If I develop an app strictly for FB I have to rely on that brand being around and the site working flawlessly. Essentially, the third parties will be promoting their own apps, which in turn promotes increased usage of Faceebook. It’s one thing to promote FB because you like it, an entirely different thing to promote because the success of your business (yes some of the apps have business models) depends on it. If I tell someone to use Facebook because I like it, and they don’t sign up, there’s no real loss. If I tell them to sign up because I depend on having people use the site to grow my web apps, and they don’t sign up, then there is a real loss.

Second, Facebook no longer has to create the next big thing - they just have to have the next big thing created for Facebook. Has Facebook added anything new since the launch of Apps? I really don’t know. But, I can tell you about a ton of new features that have been created by companies not called Facebook. So all these great new things are happening, but since they are created on Facebook, FB gets the most recognition all while doing the least work. That’s a pretty sweet deal.

So maybe $2 billion would have been a good deal.

Last week Om Malik mentioned that Facebook and Jobster appear to be hooking up to provide job search on Facebook. My initial reaction was, that makes sense, but now I’m not so sure. Yes, in terms of being a utility it makes sense, but in terms of being a social network it does not.

I think a lot of the success of Facebook comes from its closed door / walled garden status. If Facebook was more open, I’d probably be reading about how it, rather than MySpace, is destroying the morals of America’s youth. It’s too closed off for most journalists to realize the things on FB are just as bad as those on MySpace… or any other Social Network. So, many use it because they feel it is a little more private and they don’t have to be as conservative or restrained as they are on other sites.

But jobs seems to take some of that away. If you know an employer is watching you’re going to censor yourself in some way. The more conservative and restrained the users feel they must be, the less interesting the site becomes.

This leads me to believe that the best social network will be one where no one can see anything about you unless they are your friend. However, most SNs have a constant desire to add more features and make more money. Those desires will ultimately lead to some sacrifices of privacy. So, I have two questions:

1. Will we ever see the craigslist of social networks? Sacrificing profit to give people what they want.
2. Is job search on FaceBook a good idea?

It’s no secret that Digg and Facebook - two of the most publicized social sites - have faced backlash from some users as of late. Digg is angering only a few, while facebook has angered the masses. The problem is that Digg gets it strength from a few and FB gets its strength from those mind-numb masses. We’ve all seen the numbers of FB users joining the ‘new FB sucks’ groups, I was invited to join one myself (and no I didn’t join), and it seems that most of the users are joining the groups the same way that they joined FB… without any real thought.

The FB situation is bleak, many say that 400,000 is just a drop in the bucket, but enough wrong drops and 100’s of thousands turn into millions. And I don’t care who you are, no one likes to lose 100s of thousands of users. [Palopia are you listening - launch NOW!] To make matters worse, the Facebook blog has essentially told users, ‘you don’t like it, and we don’t care.’ That may not be what the blog post was going for but that’s certainly how it comes off. Starting the post with Calm Down, is enough to turn most users off - turn down the arrogance or lose your base. Remember you’re trying to flip a site for $2B based on the strength of the network, lose the network and you lose everything. Am I overreacting, yes, but so are all of the users that are joining the anti-FB groups. Who wants to buy a product that has an ever growing chunk of users pledging their hatred for the product? Either look confident and lose your users or look like you care about those users and re-gain their loyalty. I don’t know how long I’ve been hearing about how loyal of a user base the FB users are (based on how often they visit the site) - that loyalty only lasts as long as you give them what they want. Sure the numbers have been good in the past few days - but that’s similar to the Digg effect, people are going just to see what the buzz is about. Speaking of Digg effect…

Digg on the other hand is in great shape. Get rid of the users that are gaming the system and the system gets better. I applaud the efforts. I’ve recently had to put in some extra security that prevents users from gaming Lopico and I couldn’t be happier with the results. Digg is for the masses, when it starts being about a few you have to change. The confusion is with the power users that thought that they could game Digg forever, and that think that there aren’t users #20-30 who would love to take their spot as the highest ranked Digg users. This is probably the first positive Digg post I’ve done in a while, because this is the first move I’ve seen from Digg in a while that gets them closer to what they claim to be - socially driven news made by the masses.

Digg Blog: Digg Friends
Facebook Blog: Calm down. Breathe. We hear you.

- J.D. Amer is guy from akron who is about to launch motask.com

A large number of College graduates are faced with a common problem right now: which email service should I switch to? Most universities that I know of, don’t allow students to use their .edu account forever. Instead, they ask you to set up a forwarding address within a few months of graduating. This makes sense for them in terms of storage, and it makes sense for the student in terms of no longer appearing to be a college student. Doesn’t this present a great opportunity for an email provider? And since these students are also on Facebook, wouldn’t it make sense to publicize your email solution on Facebook?

From the other side, Facebook has walls and you can leave messages, but having an embedded chat application on the site similar to what gmail offers could give Facebook something that other SNs lack - a live social interaction.

To me it seems obvious for an email provider to work with a compnay that has a large number of users in need of an email solution, but maybe I’m missing something, because I certainly haven’t seen any Gmail or other solicitations when I log in to Facebook.

I write a lot about social networks for someone that is more in the local vertical, but I’ll have plenty of time to talk about local search. Who knows how long the new SNs will be around.

There’s a pretty good write up on publishing 2.0 about the fall of MySpace. I don’t agree with the rejection of seasonality as a factor, but I do think that certain signs point to a downturn. Seasonality is a factor, it’s spring people at college are onine less, that’s just a fact. The argument that it wasn’t a factor last year is misguided. MySpace’s penetration in the college market is much higher than it was at this time last year (okay it’s just bigger in general), isn’t it possible that the new users that were added are more of the trend-following-less-loyal type of user, not the always-on-no-matter-what-time-or-day it is early-adopter? The same thing happened with facebook’s herd of college students last year. Facebook’s data from when it was thefacebook is no longer available through alexa, but it went through a huge downturn when schools let out - the same trend seems to be starting up again (weekly traffic rank 66, 3 month avg. 55).

More important however, is Guy Kawaski’s (gasp) Focus Group. Seasonality is something that will always happen, but Guy’s focus group seems to indicate that permanent changes are coming. Sure the sample was way too small to mean anything, but the implications from the study are pretty much in line with what I would expect from a “trendy” company. The problem is a company will never survive by being cool. Being cool means sooner or later everyone is going to want what you have, when the mass-audience arives early adopters will leave and eventually the rest will once again follow, leaving your “cool” brand behind. In 5 years no one will talk about MySpace or Facebook unless they drastically change their focus. To survive, both companies need to find target audiences with higher loyalty and greater attention span. Hello Boomers.

Related: The Wrinkled-Facebook

I seem to be writing about FB more and more, a habit I would like to stop. However, I have not seen this talked about anywhere else.  Facebook will be sponsoring the Silicon Valley Boomer Ventures Summit, an event that gathers persons that invest in or serve the 40+ boomer consumer. A seemingly stange move for a college focused software company, but less strange for a company that is looking to enhance its professional image and move beyond the college market.  I guess I just didn’t realize how quickly Facebook wanted to turn off its core consumers.

Related: The Space v. The Face: it doesn’t make sense; Facebook for $2 Billion?

I’ve changed my habits lately.  I’ve finally started using MySpace and I’m rarely on Facebook anymore.  This is mainly because I just wanted to try out MySpace… prove that pages don’t have to be ugly, also wanted to download some free songs.  What I’ve found is that I really don’t think any MySpace-Facebook comparrisons make any sense.

Facebook seems to be supporting my general thought about the distinction - that it is more of a LinkedIn than a myspace - through it’s recent moves to add limited networks at large employers.  FaceBook seems to be going more for a “this is what I’ve done” and “this is where I am” focus rather than the MySpace focus of “this is who I am.”  The problem is that FaceBook’s users haven’t really figured this out.  I believe that most of them view this as a social tool to post pictures, leave messages for friends, and put jokes in their profiles.  Truly it is little more than a glorified aim profile.  There’s nothing wrong with that but that’s probably not the direction FB would like to steer its users. I believe FaceBook is trying to move away from “the place to keep in contact with the girl you hooked up with” and move towards “the place you keep your professional and actual educational contacts.” Personally I think this is the right move, I don’t think FB can last forever just on being a cool website that a lot of people are using.  It needs to morph into a tool that people can actually use for some life purpose.  Otherwise it’s the next abercrombie - everyone on campus is doing it for a while and then it just gets a little old.

MySpace on the other hand is strictly personal which I think makes it likely to suffer a Friendster type fate.  The main advantadge is the Music that will help keep it around as long as MySpace can keep the musicians happy. Personally I like it because I like hacking up CSS, others just stick templates in, and that’s fine, but there’s some scary stuff on MySpace. Flexibility is nice, but also seems to make it hard for the site to do upgrades.  If MySpace changes its core code most templates would not work anymore.  That fact seems to make it something that people are likely to get bored with. I don’t know I’ve been using it and have to think that it’s not as bad as everyone claims. I even reccomend that someone that I know in the entertainment industry set up a page - it does have its role.

What both are lacking is real interaction - and this palopia promises.  We’ll have to wait and see, but I’m pretty skeptical.  Even after the valleywag interview.

Lastly, Sphere (blog search) launched today - it’s pretty good. I like how the profiles of the blog work, but then again I always like useless statistics. I first heard about this a long time ago, and it was worth the wait - hopefully this will crank up the innovation in the blog search industry.

I just read that Facebook is on the block for $2 Billion, and as much as I like the Book’s potential, that number is way too high.

Facebook has some big challenges. Right now it’s cool, but it’s targeted at college students, where things tend to be cool for 3 years max. What happens when a generation that has had other means to stay connected (ie MySpace) and hasn’t had Facebook gets to school? How do you keep advertisers happy in the summer when no one is using Facebook? What about the number of features? It’s definitely behind MySpace and other competitors in the number of features. Facebook hasn’t really even figured out how to leverage all the data that it has yet.
It’s a great product and the market it reaches is viewed as a goldmine, but come on, 2 BILLION!?