Bring it on! Facebook vs Google

Google made a lot of noise when it (pre-)announced OpenSocial in early November. Its alliance with a lot of social networks were, supposedly, going to put some major pressure on Facebook. But announcing before you're live has its disadvantages, especially when your competitor licenses its platform structure to the sites you want in your "alliance". Today Bebo , the largest UK and third largest US social network, said it will launch a clone of Facebook Applications in addition to supporting OpenSocial.

Internet companies in general and social networks in particular might not like Facebook as a competitor, but neither do they like Google. As a third player, hedging your bets and supporting both, and making neither an automatic winner, makes sense.

Update: Or my take on this might be completely wrong.

Facebook and the value of context

Some thoughts on Facebook and the value of context in social networks. Please add your thoughts and point to any glaring omissions. Thanks.

In the discussions about Facebook's Beacon advertising system specifically and Facebook in general there are sometimes a lack of understanding why people share personal and sometimes private information on Facebook. And given that some information is shared openly, why the Beacon type of sharing is opposed.

Facebook started out as a closed system, a walled garden if you want. Members could only see people in their own network, basically the university or college you attended, and people they knew. That effectively erected walls and created context. The important point, I believe, is that what you wrote was not open for everyone to read. The result was fertile ground for semi-public personal communications to flourish. This style of communication has been "inherited" by members joining Facebook in the last year.

In the last year Facebook, by making design changes and growing, has moved away from its relatively closed system. Two examples being the change from relatively small networks, the size of a school, to networks with one million members (e.g. the Sweden network) and opening the site to Google and other search engines. In effect Facebook has shifted from giving a relatively high degree of privacy protection, in a social network context, to giving greater leeway to digital voyeurism. (And this is not taking the Beacon power grab into account.) I don't believe that we have yet seen the changes in social behavior, e.g. less open communication in public areas of Facebook, that will likely follow these changes.

I lean towards believing these changes are bad in the longer term both for Facebook and its members. Opening the site will make the part of the social graph Facebook can see larger, as the number of nodes (people) and connections (friendships) grow in relation to members on Facebook. However, I don't believe it is the number of nodes and connections that is the key value driver for social networks. Rather I believe it is the strength of the connections and the activity between nodes that are driving long-term value for members.

A transparent system with many participants will likely reduce the semi-public activity between members. Basically there are things you will not say and things you will not do in an open, public place, but would do in a closed group or a Friday night in a bar. If certain high-value (because they are fun, interesting or something else) activities become rarer, Facebook could be less interesting even if the number of members grow.

That doesn't mean Facebook will disappear, it won't, but it highlights the opportunity for other social networks to satisfy specific needs for certain people better than Facebook.

Facebook's Beacon is evil

Facebook's Beacon program, where Facebook's partner sites automatically report your activity on their sites to your Facebook account, doesn't pass my smell test. What Facebook has built in Beacon is spyware. If Facebook doesn't redesign Beacon and makes it opt-in and far more transparent than today, I will be very surprised if this leads to neither a member backlash nor regulation by lawmakers.

An example of how Beacon works: Click on Play Now and Joost will report your action to Facebook and unless you actively say no, your activity will end up in your newsfeed.

Facebook Applications as organic search results

Niki Scevak on the newsfeed (of Facebook and others) and marketing. I like the way of comparing applications to organic search results and Facebook's ad system to paid search.

Microsoft invests $240 million in Facebook

Microsoft invests $240 million in Facebook at a $15 billion dollar valuation, giving them 1.6 % of the company. In addition Microsoft secured the right to sell advertising in non-US market on behalf of Facebook. I'm going to write more about this if time permits, but one way to think of the investment is as a advance against advertising to be sold with an option on equity appreciation.

Videos from Graphing Social Patterns Conference

Videos from the Graphing Social Patterns: The Business & Technology of Facebook conference. Presentations from among others Reid Hoffman of LinkedIn, Tim O'Reilly and Jia Shen of RockYou. Worth a look if you want to better understand Facebook as a platform.

YASENR

Time for yet another Sunday evening news roundup (or in short YASENR).

Inside Facebook on Facebook standardizing application invites. Comments from Andrew Chen.

Chris "Long Tail" Anderson: Everything in the music industry is up! (except those plastic discs) And he doesn't take into account the money going to artists because they are brands (endorsements etc).

History might not repeat itself, but it definitely rhymes. The old privacy discussions surrounding online-offline advertising targeting integration (DoubleClick + Abacus back in the dot.com days) will likely resurface as Acxiom is doing the same thing today.

Martin Jönsson comments on the interesting acquisition made by the cash rich and highly profitable Herenco in the Swedish local newspaper market. Previously Herenco-owned Jönköpings-Posten was the only local newspaper without a news web site. Instead of launching one, they acquired the startup competitor Jnytt

Losing context

As "everyone" is using Facebook, I'm experiencing that all my networks, for lack of a better word, are on their way to merging into one connected and transparent "friends" network. It makes me feel uneasy as it raises important questions about context, transparency and online voyeurism. Questions I don't have good, long-term answers to at the moment.