I Don’t Agree with the Hog Pile on Facebook

There’s a growing trend in the media to attack facebook.  It started when their redesign got pretty bad reviews, continued when their CFO left, and now is gaining steam as mainstream outlets are questioning it’s core business proposition. There are three different things here and the media is pointing to them as an indication of Facebook’s failure.  I disagree.  Here’s why:

Product enhancements. One thing i’ve admired about Facebook is their ability to keep pushing their product forward.  They introduced a great photo experience before any of their competitors (and have grown to be #1 on the web).  Even as they were experience phenomenal growth (they hit 8 million student readers), they completely redid their home page when they introduced the News Feed.  While initially hated by their users (FB blog) and the media (Time article), it set the standard for how social networks should display user activity and is now seen as a stroke of genius.  And growth climbed even higher.  At 70 million users they then completely redid the profile page to be a feed-based page as this is the best way for users to continuously portray themselves (see Tumblr for an example).  This was hated at first too.  Now, they redone the Facebook Home page to better showcase conversations and user activity.  Is it like Twitter? Yes.  Is it hated by their users? Yes. But it is also an improvement.  More than any other company i know of, Facebook is constantly pushing to get better in all areas and doing it fearlessly.  Even if they misstep, I applaud them for it.  From my experience at AOL i’ve seen that when yoy have a large user base it’s very easy to become tentative and second-guess every move.  Not changing becomes the easiest path.  It also means you start dying.   This latest change is more an indication that they’re not dying but moving forward.

Valuation.  Facebook got an absurd $15 billion valuation from Microsoft when it sold them some equity.  That deal was more than just equity sales but it also solidified Microsoft’s relationship with them as their exclusive third-party ad provider (story).  That valuation has become a problem as every new raise that happens in the industry (Twitter,  FriendFeed) is evaluated against it.  Facebook is now raising at a more reasonable level at a $5 billion valuation.  I don’t think this is an indication of failure of FB but rather a reflection (a) that these raises are straight equity and not part of an ad sales agreement, and (b) the market is the worst it’s ever been.  I think it’s ridiculous to think that the environment is the same as it was in October 2007.

Business Model. The media talks about Facebook’s failure to make an ad business out of their inventory.   Time’s article this past week was called, “Facebook Takes a Dive: Why Social Networks Are Bad Businesses.” This is completely ridiculous.  First of all, MySpace is making money.  Let me repeat.  MySpace is making money.  They were bought by Fox for $580 million and they then immediately did a deal with Google to sell ads on their search page from 2006 to 2010 for $900 million dollars (details here).  That’s a quick profit of $320 million.  Everything else on top of that year-in and year-out seems to be gravy.  The article in Time continues to say:

What is true is that social network sites have had trouble making money. MySpace was supposed to be a big part of the revenue growth at News Corp. Wall St. thought Murdoch was a genius to buy it. Last year, News Corp had to admit that MySpace would not hit its revenue targets. That is usually not the hallmark of a property that is going to take over the Internet.  Analysts believe that MySpace rival Facebook had revenue of $265 million last year. That is astonishingly low for a company that had 57 million unique visitors in the U.S. last month. And, Facebook also has a very large international user base.

So let me get this straight, even though MySpace is profitable at $500-800 million dollars a year in revenues and even though it’s generated hundreds of millions of dollars for News Corp it’s a bad business becuase they missed their revenue target last year?  That is completely ridiculous.  Facebook is a differnt issue.  They have repeatedly said that they are deprioritizing ad revenue and instead focusing on growth and user engagement.  Since they started saying this (starting in late 2007), they have grown from 50 to 200 million users.  I’d say that’s pretty good execution.  Facebook makes about $275 million a year.  Could they make another 100-200 million if they started selling more ads on search pages and profile pages?  Absolutely.

All of these reasons above are why sensationalist articles discussing the demise of the social network drive me nuts.   Nobody knows what the future holds, but one thing that we can pretty much be sure of is that sites that have great user engagement and activity – and facebook has over 20 million users update their status at least once a day – will get the ad dollars.  Nick O’Neil has a good post on AllFacebook today on why he’s willing to pay a $34 CPM on facebook.  It’s not the silver bullet but it shows that there is a profitable end in sight for the company and it’s not necessarily the horrible business the media would like it to be.

Google Latitude

A new feature was released today from Google called Google Latitude.  It’s allows you to post your location onto Google Maps and to see your friends’ locations.  It’s done using GPS and other technologies (Gears, etc.) and works really well.  Here are some thoughts i have on it

First, I like the way it looks and works. The interface is extremely simple.  Entering in info is done inline and the interface is definitely not cluttered with too many bells and whistles.  Adding and viewing friends is also braindead simple.  Overall, it’s a snap to use

It’s a social app but it’s different than a social network. For instance it’s (a) only really useful for people you know, (b) more interesting for people you live close to, and (c) limited to only location information. It’s only a map.  Again, very simple

Not everything is great though. One thing i don’t understand is why they force you to access it (on the web) through iGoogle.  I have a homepage already and see no other reason to go to iGoogle.  That’s annoying and i wish it had it’s own site like Google’s Calendar, Reader, Maps, Mail, etc.  Also, I also wish it would use my profile from other Google products. It seems now that i have a different profile for Gmail, Calendar, Orkut, FriendConnect and Reader.  Why can’t there be just one?

Since i’ve had a iPhone, i’ve become much more aware of the usefulness of my location.  When this information is layered onto web services, those services can become much more useful.  I like this new app because it shows that there’s a whole other layer (location) that is just starting to be explored. I can imagine many applications starting to layer in location and serve information based on this.  Ad targeting, ticketing, messaging, groups all change when this is added.

Related articles:

• Google’s Latitude Adds Location-Sharing to Mobile Phones (radar.oreilly.com)
• Broadcast Your Location To Friends With Google Latitude (techcrunch.com)
• Ten Reasons why Google Latitude will succeed (thenextweb.com)

Recording Life

I just read a great article by Clive Thompson called “Head for Detail” about Gordon Bell’s latest experieement.  Please just read the first 2 paragraphs.  It’s about Gordon and how he is recording everything he’s doing (video, audio, emails, web, everything).  He’s been doing it for the past 14 years and is able to bring up almost eveyrthing.  Clive writes about Bell, saying:

He[Bell] had a tiny bug-eyed camera around his neck, and a small audio recorder at his elbow. As we chatted about various topics–Australian jazz musicians, his futuristic cell phone, the Seattle area’s gorgeous weather–Bell’s gear quietly logged my every gesture and all my blathering small talk, snapping a picture every 60 seconds. Back at his office, his computer had carefully archived every document related to me: all the email I’d sent him, copies of my articles he’d read, pages he’d surfed on my blog.

This really resonated with me as i am already trying to record my life. I have photos up on Flickr, i have my ideas going to my blog, i have my mundane thoughts going to Twitter, my videos going to YouTube, and my friend interactions recorded on Facebook.  I’m already on the web but just in the totality that Bell is.  Storage is getting cheaper and cheaper it’s gone from $233,000 for a gigabyte in 1980 to less than $1 today.  Soon there will be enough storage in your cell phone for your entire life to be stored.  I do this because i want to remember. I want my memories to be accesible all the time and reading the article made me realize how inefficent i’ve been in capturing them.

I really like articles like this becaues they make you think about where the world is going and wonder how human interactions and functions will change.  It touches on how humans will change when we no longer have to remember stuff.  I already don’t remember phone numbers beceuase of your cell phone. What if you don’t have to remember people’s names and interactions and you free you mind to be more creative.  Just imagine – that’s what i’m doing now….

Related articles:

• In Defense of Friendships Formed With People We Meet Online
• 2009: Products I Can’t Live Without
• If You Liked This, Sure to Love That (Clive Thompson/New York Times)

Twitter thoughts

I read this article by Tim O’Reilly called “Why I Love Twitter” and it has some good points. Specifically:

1. “Following” instead of “Friending” – in my opinion, only true/proper social networks that are primarily about social interactions (like Facebook or MySpace) should use 2-way friending.  The rest should allow for 1-way following.
2. “Ambient intimacy” is about deepening people relationships via short messages and thoughts.  Similar to how you get to know someone who’s desk is right next to yours because of offhand comments, you can do the same via twitter
3. Cooperating with others – Twitter allows others, even competitors, to utiilze them.  And it seems to only strengthen twitter.
4. A true mobile app – for me this is the first mobile application that works better on mobile than the web.  It has truly changed how i think about working on a mobile device

Twitter is an interesting beast because it’s still niche but gaining steam.  People also love to bitch about how it doesn’t have a business model.  This is true, it doesn’t but neither did email for a long time and now it’s one of the biggest driver of pageviews and engagement on the web.

Related articles:

• Why Twitter Didn’t Sell to Facebook – Really
• Twitter: Just like Family
• Biggest Battle Yet For Social Networks: You, Your Identity And Your Data On The Open Web

How many people can you know? What’s your Dunbar number?

In the same NY Times article i just wrote about, there’s a great section the “hard-wired upper limit on the number of people he or she can personally know at one time” and compares that number between humans and apes.  It reads:

In 1998, the anthropologist Robin Dunbar argued that each human has a hard-wired upper limit on the number of people he or she can personally know at one time. Dunbar noticed that humans and apes both develop social bonds by engaging in some sort of grooming; apes do it by picking at and smoothing one another’s fur, and humans do it with conversation. He theorized that ape and human brains could manage only a finite number of grooming relationships: unless we spend enough time doing social grooming — chitchatting, trading gossip or, for apes, picking lice — we won’t really feel that we “know” someone well enough to call him a friend. Dunbar noticed that ape groups tended to top out at 55 members. Since human brains were proportionally bigger, Dunbar figured that our maximum number of social connections would be similarly larger: about 150 on average. Sure enough, psychological studies have confirmed that human groupings naturally tail off at around 150 people: the “Dunbar number,” as it is known.

The big question then is: Are people who use Facebook and Twitter increasing their Dunbar number, because they can so easily keep track of so many more people?

I find my social networks work against/for this number in 2 ways:

1. For my good friends the relationships are strengthened through social networks and Twitter. I learn more about them and we’re able to interact more often
2. There are weak friends that i normally would discard and never talk to again but instead they hang around on Facebook and Twitter and i gradually grow to learn more about them.  Over time they turn into actual friends or i delete them and they turn into nothing.

Being Digitally Close

There is an article in the NY Times a few weeks ago called “Brave New World of Digital Intimacy” and i think it’s one of the best pieces i’ve read in a long time at explaining why Facebook Status, News Feed, Twitter and other new digital platforms are useful and popular.

The online area that the article talks about is “incessant online contact” or as some call it, “ambient awareness.” In the offline world people pick up on moods by little things like body language, sighs, little comments, etc..  In the online world this is being done by microblogging tools like Twitter (140 character updates), Dopplr (where are you traveling?), Tumblr (what web items do you like), and Facebook’s Status Feed.  The article asks the question that i get asked all the time, Who cares?:

For many people — particularly anyone over the age of 30 — the idea of describing your blow-by-blow activities in such detail is absurd. Why would you subject your friends to your daily minutiae? And conversely, how much of their trivia can you absorb? The growth of ambient intimacy can seem like modern narcissism taken to a new, supermetabolic extreme — the ultimate expression of a generation of celebrity-addled youths who believe their every utterance is fascinating and ought to be shared with the world.

This is indeed how many people view it.  But the genius of the article is how it explains the subtle usefulness of the information:

Each day, Haley logged on to his account, and his friends’ updates would appear as a long page of one- or two-line notes. The updates were indeed pretty banal. One friend would post about starting to feel sick; one posted random thoughts like “I really hate it when people clip their nails on the bus”; another Twittered whenever she made a sandwich — and she made a sandwich every day. Each so-called tweet was so brief as to be virtually meaningless.

But as the days went by, something changed. Haley discovered that he was beginning to sense the rhythms of his friends’ lives in a way he never had before. When one friend got sick with a virulent fever, he could tell by her Twitter updates when she was getting worse and the instant she finally turned the corner. He could see when friends were heading into hellish days at work or when they’d scored a big success. Even the daily catalog of sandwiches became oddly mesmerizing, a sort of metronomic click that he grew accustomed to seeing pop up in the middle of each day.

This is the paradox of ambient awareness. Each little update — each individual bit of social information — is insignificant on its own, even supremely mundane. But taken together, over time, the little snippets coalesce into a surprisingly sophisticated portrait of your friends’ and family members’ lives, like thousands of dots making a pointillist painting. This was never before possible, because in the real world, no friend would bother to call you up and detail the sandwiches she was eating. The ambient information becomes like “a type of E.S.P.,” as Haley described it to me, an invisible dimension floating over everyday life.

This is exactly how it works.  Now, i don’t have ESP through this but i do enjoy the knowledge of how my friends’ lives are progressing. These tools have enabled that to happen and it has certainly enhanced my relationships with them.

Twitter the most pure social network

Some social network thoughts…..

I’ve been using Twitter more and more lately and i have to say that i’m really enjoying it.  I love the simplicity and ease of use.  The fact that they limit the characters, is only text and is just a list of your friends thoughts makes it always interesting.  Of course, Facebook used to be like that for me too.  I’m not sure if it will ever catch on for the masses.  The fact that only a subsection of my friends use it makes it more useful for me so i don’t get too many updates.  I’m not sure if it’s fun enough for everyone just yet.  I do think the mobile aspect of it could tip it over the edge. I wasn’t that into Twitter until i started doing it on my iPhone and then it became a must-have app.  I still don’t see much difference between the AIM away-message, the facebook status message and Twitter other than the mobile/cell-ness of Twitter and the simplicity.

More and more i think facebook will develop into a utility instead of a place of expression.  I think it will be like the yellow pages – where is a tool people use to look up people, find out about friends of friends and find phone numbers, emails, etc.  It’s a social address and people directory. It’s a tool

MySpace continues to be about self-expression and i think that’s a good differentiator as they could never beat facebook at their game.  However, i do believe self-expression can be done even better.  Something like Uber or Virb or something could be better – if it had more of Tumblr-type experience int it.  We did some focus groups the other day and everyone used both Facebook and MySpace.  They liked Myspace b/c it really represented them – it was a good badge but they hated the sketchiness about it.  “Too many old weird guys” they said.  They had facebook b/c everyone had it and it was easy to connect but it didn’t seem like it was fun to them.  It was interesting.

What are your thoughts

Like Hansel, these are so hot right now

My cousin P-Walk asked me what sites are “hot” right now. My list of sites that may be below the radar of regular people but getting some well-merited attention is:

• yelp – anyone who loves food in a city should use this
• dopplr & tripit – for travel sites they are both good
• imeem – getting some mean traffic
• mahalo – really interesting for search (challenging Google by doing it person/wikipedia style)
• twitter – the most pure social interaction. It could be monstrous. Give this one some serious attention.
• Tumblr – a great little microblog tool

What am i missing?

(i’m just happy i went the entire post without saying Web2.0)

Building Participation & Cognitive Surplus

Clay Shirky has a great speech about cognitive surplus. A phrase that refers to the free time we have away from our jobs or studies to do stuff. Over the past 30-50 years, what everyone did with this cognitive surplus is watch TV. Sitcoms were the big universal thing everyone did. In fact there is 200 billion hours of cognitive time/surplus in America that is spent watching TV. Over time however, this time spent has been shifting from TV to participatory activities like social networking to video games.

First there’s talking about participation and how it is THE new phenomenon of this generation and how it is hard to calculate. I like this passage:

The physics of participation is much more like the physics of weather than it is like the physics of gravity. We know all the forces that combine to make these kinds of things work: there’s an interesting community over here, there’s an interesting sharing model over there, those people are collaborating on open source software. But despite knowing the inputs, we can’t predict the outputs yet because there’s so much complexity.

It is a big shift from the past when we would sit and watch Price is Right all the time or other mindless crap. I loved those shows but those days are over…

This is something that people in the media world don’t understand. Media in the 20th century was run as a single race–consumption. How much can we produce? How much can you consume? Can we produce more and you’ll consume more? And the answer to that question has generally been yes. But media is actually a triathlon, it ’s three different events. People like to consume, but they also like to produce, and they like to share.

The big concept in the speech of the idea of cognitive surplus and how that it is dwindling. We are now participating in activities. Whether it is video games, social networks, or other items online – we are doing stuff.

One good story he concludes with is:

I was having dinner with a group of friends about a month ago, and one of them was talking about sitting with his four-year-old daughter watching a DVD. And in the middle of the movie, apropos nothing, she jumps up off the couch and runs around behind the screen. That seems like a cute moment. Maybe she’s going back there to see if Dora is really back there or whatever. But that wasn’t what she was doing. She started rooting around in the cables. And her dad said, “What you doing?” And she stuck her head out from behind the screen and said, “Looking for the mouse.”

Here’s something four-year-olds know: A screen that ships without a mouse ships broken. Here’s something four-year-olds know: Media that’s targeted at you but doesn’t include you may not be worth sitting still for. Those are things that make me believe that this is a one-way change. Because four year olds, the people who are soaking most deeply in the current environment, who won’t have to go through the trauma that I have to go through of trying to unlearn a childhood spent watching Gilligan’s Island, they just assume that media includes consuming, producing and sharing.

I do like the thought of all one-way media becoming more interactive. This is definitely happening. It’s one of those concepts like “The Long Tail” that you can feel happening but it’s not until it’s written in a cohesive manner like this speech that it all comes together.

We’re looking for the mouse. We’re going to look at every place that a reader or a listener or a viewer or a user has been locked out, has been served up passive or a fixed or a canned experience, and ask ourselves, “If we carve out a little bit of the cognitive surplus and deploy it here, could we make a good thing happen?” And I’m betting the answer is yes.

Facebook let’s you add to your mini-feed

Lots of folks do stuff around the web that is outside of Facebook. For instance, i post lots of Flickr photos and i save web sites to delicious. I’ve always loved the Facebook News Feed as it does a good job of letting me know what my friends are up to. Today it got even better because Facebook now allows me to add Flickr, delicious, Yelp and Picassa actions into my mini-feed. Nice

This is great for a variety of reasons. First, it shows that facebook isn’t the walled garden that AOL was. Facebook is a walled garden, but only for certain things (social graph, photos, social messaging, etc.). For everything else, they are willing to open up and reciprocate. They made a platform to allow users to interact with their assets (people) and have a messaging feature so emails can come in and out but not replace. If they were a basketball team, they may not go around the country and play everyone but at least now they’ll let other come to their court and play a game.

Second, it shows they aren’t trying to be everything to everyone. It could be very easy for Facebook to believe that they can build better products than everyone else and try to compete. This is what AOL did for email, video, destination sites (Sports, News), communities, photos, maps, music, etc – and they lost big. Facebook is clearly maintaining its focus on social activities and even recognizes the difference between their photo app (social photo sharing, not for storage) and Flickr’s (photo blogging, archival) and embraces that. Kudos to them.

Speaking of handing out kudos, you should watch this video (below) of Andrew Bogut’s high fives after his free throws. Not everyone is that eager to congratulate someone.