Posts about facebook

How would Google compete with Google?

So when someone came along who actually managed to compete with and even frighten Google — namely, Facebook — how is Google competing? By going open. There’s a lesson in that for the rest of us.

I keep saying that media companies should ask WWGD – what would Google do — in formulating their digital strategies. Well, in Google’s Open Social, we see that the best competition against a growing monopoly is openness.

So how should we compete with Google or at least challenge its monopoly? Openness. I’ve argued for sometime that we need an open-source ad infrastructure. If the rest of the world other than Google — that is, those who have the other half of advertising Google doesn’t yet have — can gather together and create standards, then Google would be faced with the same decision Facebook is now faced with: whether to use those standards. What organized Facebook’s foes? Ironically, it was Google. Who could organize the nonGoogle ad universe? I see no one on the horizon. That’s why Google keeps growing. We’re letting them.

Social value

$15 billion for Facebook doesn’t sound so crazy when you consider this: A Deutsche Bank analyst says that a newspaper reader in 2004 was worth $964 a year. Today, that’s $500. Facebook’s 50 million active users translates to $300 per at that valuation. And newspapers are shrinking while Facebook is growing by 200,000 new users a day. A day. And those users spend an average of 20 minutes each day inside the site vs. 41 minutes a month on newspaper sites, says DB.

By the way, the analyst says newspapers will come back into the black in 2012 but I see no rationale in theh E&P story for that prediction.

(Link corrected. Thanks, friends.)

The Facebook economy

You know a platform is gaining traction when it spawns an ancillary economy. The Facebook platform has not only supported apps companies that are, in turn, supported by venture capital, but now it yields conferences that can charge $400 at the door. I don’t see why such a conference is needed when Facebook developers have been gathering in hackathons thanks to Meetup, which is a helluva lot cheaper, or thanks to organizing on Facebook itself, which is free. But this is capitalism at work. Next we’ll be seeing the equivalent of SEO: app optimization consultants and conferences and books and new job descriptions and ads for them.

Recommending the tail

Wharton and O’Reilly just released two provocative reports on whether social distribution and recommendation really get into the long tail.

First, O’Reilly’s on the distribution of Facebook apps:

The good news has already been widely disseminated: there are nearly 5000 Facebook applications, and the top applications have tens of millions of installs and millions of active users. The bad news, alas, is in our report: 87% of the usage goes to only 84 applications! Only 45 applications have more than 100,000 active users. This is a long tail marketplace with a vengeance — but unfortunately, the economic models (for developers at least, though not for Facebook itself) all rely on getting into the very short head.

I think there are a few reasons for that. First, the Facebook platform is so damned new. If the same analysis of the entire web had been made in December, 1994, two months after Netscape’s release, it would have shown that Netscape got most of the attention along with a camera on a coffee pot. It took a long time for the Web to develop its incredible depth: its tail. The Facebook platform is very much in its infancy. It’s far too soon to draw any grand conclusions.

More substantively, I think one reason for this undistributed distribution is the nature of social apps: They gain in value the more that people — especially you know — use them, and so the community is uniquely motivated to create blockbusters. It’s one matter to simply recommend things to people (more on that from Wharton in a minute); it doesn’t really affect you if more people watch the movie you recommend, except that you feel as if you’re part of a trend and maybe you can discuss it with them. Those are light motives. By contrast, many Facebook apps are all but useless if your friends don’t use them; that’s the social in it. This creates more of a gathering point than mere recommendation.

I think there’s a lesson in this for old, blockbuster-oriented economies — entertainment and media, mainly: How do you improve your product for all by having more people involved in it? And how does that motivate people to spread it for you? We have seen this happening in online forums: the more people who are involved, the more people get involved (though there is a tipping point; you can have too many people). I wonder whether collaborative media could take on this effect. Lonely Girl 15 may be an example: people made media around the media and spread the original along with their creations. How can newspapers and TV shows do likewise? How does the collaboration and the involvement of your friends improve the product and how then do you get your friends involved? If I were trying to produce a social news or entertainment product, I’d investigate that formula.

Now shift to mere recommendation. The Wharton report (via PaidContent) says that as presently implemented, automated recommendation systems tend to cluster people around products and create blockbusters.

Online retailers may be shooting themselves in the tail — the long tail, that is, according to Kartik Hosanagar, Wharton professor of operations and information management, and Dan Fleder, a Wharton doctoral candidate, in new research on the “recommenders” that many of these retailers use on their websites. Recommenders — perhaps the best known is Amazon’s — tend to drive consumers to concentrate their purchases among popular items rather than allow them to explore and buy whatever piques their curiosity, the two scholars suggest in a working paper titled, “Blockbuster Culture’s Next Rise or Fall: The Impact of Recommender Systems on Sales Diversity.”

Hosanagar and Fleder argue that online recommenders “reinforce the blockbuster nature of media.” And they warn that, by deploying standard designs, online retailers may be recreating the very phenomenon — circumscribed media purchasing choices — that some of them have bragged about helping consumers escape.

The problem is with automated recommendations and that a critical point:

“Because common recommenders recommend products based on sales and [consumer] ratings, they cannot recommend products with limited historical data, even if they would be rated favorably,” they write. “This can create rich-get-richer effects for popular products and vice-versa for unpopular ones, which results in less diversity.”

That could be solved or balanced, I think, if you shift to reliance on human recommendations: ‘My friend Fred finds good stuff for me…. My friend Sally finds better stuff than Fred…. My friend Jeff has no taste.’ Then a critical mass of historical data doesn’t really matter; relationships and taste and shared knowledge do. And we find the friends who like the stuff we like. We live in the tail. We can also live in the head of the curve: We all watch American Idol, too. More on this later…

Friendship is complicated

Via Facebook friend Kathryn Corrick, here’s a good post by Meg Pickard on the issues raised by Facebook’s one-size-fits-all definition of friend and the need for more subtle layers. I agree; most Facebook friends of all stripes I know would agree as well. Combining college friends with work friends with friend-friends with family results in strange and for some uncomfortable juxtapositions of lives — the keg party next to the romance next to the job. And that will only be amplified as young people on Facebook grow older and get new lives.

On the other hand, one can easily overcomplicate this, trying to fit friends into strict definitions. And I think that’s where Meg may be headed in her post. There is a natural reflex to try to order everything in our worlds. But life is essentially disordered, isn’t it?

The bottom line, I think, is that what we want from Facebook is more tools to show some folks some stuff and others other stuff and let us deal with that. Pownce is doing that with the ability to publish to everyone, just friends, or just a group of friends. Smart.

But what I want from the larger web is also the ability to present different identities made up of various bits of my stuff: a combination of the work me (this blog or most posts from it, boring Flickr conference photos, Twitters from those conference, and so on), the home me (family photos, including an embarrassing one I’ll soon share of me on a Segway, and the occasional personal post from here), past me (college friends), local me (my Zip Code blogging organized thanks to Outside.in), and so on.

Pickard lays out the problem simply and graphically:

The trouble with Facebook is that it’s a confused social space. There are too many different facets of personality being exposed through social openness. So much so, in fact, that it gets a bit difficult to manage. For example, at present on Facebook, I have (among others) the following listed as “Friends”:

* My husband
* Several people I’ve known since I was 11
* College friends I haven’t talked to in 15 years
* My boss
* A couple of people from university I’d lost touch with
* Several people I know from t’internet, but haven’t met / don’t actually know
* A few people on a mailing list I belong to
* A handful of family members
* A few people who work for me
* At least one ex boyfriend
* People who I’ve seen around the office but never exchanged more than words of greeting with

While I obviously wouldn’t have connected with these people via Facebook if I hadn’t wanted to, it’s pushing the definition a bit to lump all of them together into the same bucket, labelled “friends”. Why? Because most of them aren’t strictly friends (although they’re all lovely, obviously).

Yes, and I also wish on Facebook that I could add unfriends — the people I don’t know but may want to and vice versa, the people whose befriendings I’ve ignored because of the way Facebook works. This isn’t a matter of privacy, which is usually where the discussion heads: Facebook allows me to show certain people next to nothing of me, but I find that practically insulting to them. No, the real issue it that there are other side-effects of becoming Facebook friends: They enter into my News Feed and have an unknown impact on it (if 12 of the people I really know add an app, that means one thing; if 24 people I don’t know add it, that means, well, not less, but at least something different). Also, my friends say something about me and I about them; the fact that identities and relationships on Facebook are real is, I believe, the essence of its value. So it matters when I befriend someone; it doesn’t mean I’ve made a new friend but rather than I’m confirming a real-life friend. There’s one rather, uh, eccentric fellow who keeps trying to befriend me and everyone out there. I know he’s no more their friend than mine in real life. So when I see him befriended on someone’s page, I know that they are not, shall we say, discriminating. And that says something to me about their relationships with other friends on their lists. It devalues those links. So I try to keep my friend’s list real.

Now having said that, the irony of this post is that I asked the aforementioned Kathryn Corrick to befriend me even though we don’t know each other outside Facebook. But we have a number of friends in common and I bumped into her following the same interests. I had a question for her about something she’d done that related to something I’m doing and CUNY and after a helpful email exchange — and because her smiling Facebook picture makes her look so, well, friendly — I made the ping. And because I did, I saw the link to Meg Pickard’s post in my News Feed and I’m the better for it. Happy ending. But danger lurks there. No, not that I’m a masher; I mean danger for Facebook. It is not, as Mark Zuckerberg has pointed out, intended as a place to make friends but a place to organize friendships. Indiscriminate friend-making is what did in Friendster and devalues MySpace and turns LinkedIn into human spam (I just had to go through 20 clicks to stop its incessant email). So that’s why someone created a Facebook app that enables friends to recommend friends to others, to put some order on that process, too (sadly, I can’t get it working; guess I don’t look friendly). That is the genius of the Facebook platform: People will likely use it to solve Meg’s issues and mine.

But it’ll never be perfect. Life isn’t. Friendship is complicated.

Faceboom

I went to a Facebook developers’ hackathon last night at Thumbplay in New York. I wasn’t the invited participant. Son Jake was. I was merely the chauffeur. Nonetheless, it was a nonvirtual Facebook for me, for I found all sorts of friends there: developer colleague, show-biz pal, investment guy, political geek. Everybody’s into Facebook.

The excitement of having this easy, quick platform and built-in audience and new architecture of content and interaction was palpable. David Henderson of Social Media reminded the group that this has exploded in only 45 days. There have been 125 million app installations and it just keeps growing: more people, more apps. . . . and we haven’t even hit Labor Day and the return to school yet.

What we don’t know is the churn of these apps — only the net growth, not the number who drop off and are replaced. A lot of these apps have a half-life like show business, only accelerated: cool comes and cool goes. But others will become fundamental to this new social architecture. I don’t think the fundamental ones have been invented yet.

There was, of course, a lot of discussion about monetization, with one skeptic in the crowd drawing everyone else’s justification and inspiration regarding revenue: the discussion turned into a human wiki. There’s advertising, of course, and direct-response and barter and loyalty points systems and virtual currencies and also research. Henderson said that at the food fight app, users started with $10 to buy rotten tomatoes but wanted more and so they offered food fight currency in exchange for answering market research questions. To date, he said, they’ve received 20 million responses: 80,000 users per day, 25 per user. That’s what excites them all: instant scale.

There was, of course, much discussion of what Facebook allows and doesn’t allow and what’s behind every decision. Jake chuckled at all the Kremlinology that was going on. “They’re overthinking,” he said. Some things are done just because they’re done, no vast conspiracy.

What excites me most is the prospect of the pipe reversing: using Facebook to help organize the larger social infrastructure that is the web already. I’ve suggested to folks that they use Facebook’s real identity to feed real identity on their sites and forums. One participant said Facebook will plug into the social grid of the web. Or was that vice versa?

Open your drawers

I’m getting pissed off at people on Facebook who have their privacy settings adjusted so that when they try to befriend me and I try to see who they are, they keep me from seeing anything about them. A fine way to start a friendship. I am ignoring them all. Pshaw.

And who says Facebook has no value?

It just informed me that I share a birthday with Arianna Huffington. Happy birthday, Arianna. (It’s Sunday, by the way. We also share it with my Facebook friends Tara Hunt and Iain Dale.)