Dear Google, Yahoo, Facebook, Microsoft, you don’t have to control my data to provide me value

Yesterday John Furrier and Robert Scoble dominated tech discussions when they wrote about the possibility of Microsoft buying Facebook and then locking Google out of part of the web (the Facebook Walhalla that is). It seems like a possible scenario. Facebook has an incredible amount of users and is one of the largest walled gardens in the world (MySpace would be the other and bigger one). Microsoft can’t beat Google in advertisement or search, but they really want to be a serious competitor. That is why Microsoft wants to buy (part) of Yahoo now.  And if they were to buy Facebook they could possibly have access to a holy grail with 100Mln users and their interactions with their friends (e.g the Facebook social graph). They could then build search on that social graph and possibly become the “next-generation” Google. That is a search and advertisement giant on social networks. These take-over rumors have already been denied by Facebook but that really doesn’t matter much. I’m not interested in such a deal, but I am interested in the thought that some might be delusional enough to think they can lock down millions of users and confine them to a small part of the web.

There are some serious flaws in such a scheme. I named the most obvious and important one already yesterday and it’s that human nature doesn’t like to be confined (within a specific area of the web). We don’t like walled gardens and we are bound to find a way out. The argument against this (Facebook is a walled garden and has already 100Mln users) is weak as there currently isn’t a viable alternative. But there will be one once the web is divided into an open and a closed section.

But underlying this customer freedom there is another big issue at hand. The current fight between the big Web companies isn’t really about users or web. You might think its data, but that is only a trigger for something else. The fight is about control. Most web 2.0 company, with the social networks leading the pack, think they can control part of the web (and therefore part of the revenues) if they can control the data that flows through it. That is the main reason for building walled gardens, its about control.

Facebook now controls the data of 100Mln people. With that control they can decide who gets a share in the pie and who doesn’t. Scraping attempt (e.g. data removal from Facebook) gets the penalty of removal. The argument provided is that the user’s privacy is at risk, but that is a ridiculous argument. They might even believe it a bit, but underneath that argument is always the fear of loss of control.

There isn’t a single web 2.0 company that can guard the user’s privacy. It just doesn’t fit the business model they are executing (unless your main product is privacy, but then you don’t need the web 2.0 FREE business model. You can get users to pay for it the old fashioned way). In the end there can be only one responsible for data and privacy, and that is the user.

The ability to control data is highly overrated by social networks. Every network hogs the data of its users as if it were pure gold, but the real value of a social network doesn’t lie in the data. You can’t map me into a profile by hogging my data. On the web you only get to see a fraction of the real me, a public persiflage. I might even have multi facet identities, or a different identities for different things. If you are going to map advertisement to me it won’t take into account my mood of today, the things I experienced yesterday, the things that interest me right now.  You could take away my data from me, but how are you going to take away my interactions? Do you think that if I’m banned from your service or a network I can’t interact with my friends any more? There isn’t any control, just an illusion of it.

That is why a User Centric Web will be more valuable. In a User Centric Web the roles are switched. In a User Centric Web the user controls his data and the service provider does what it needs to do, provide service. No battles over data, users, social graphs, networks or walled gardens. Only battle over what matters most, user value. The service provider that provides the best service will win.

Can you feel the power of such a paradigm switch? Put the user in control means letting go of the false illusion that you as a service provider had control in the first place. It forces any service provider to think about user value, about how to be more attractive to the user than any competitor ever could be. The paradigm switch would immediately break down walled gardens and create an open space where the user can travel anywhere he wants to and take his friends and data with him.

And the great thing about it is that you really don’t need all that data to service me in the best possible way. You can provide me value without controlling my data.  If you provide me value I will even hand you the data that is needed for you to provide me value. You don’t have to guess what I’m about, I’ll tell you if it helps you to help me. Does that mean that having data has no value. Of course not. But hogging data from users and trying to control the user through that data doesn’t make sense. Context, interactions, actions, needs, emotions, experience. They are all much more important than data. I like what Fred Wilson says about this.

Social web services need not fear data portability. They need to fear others providing a better experience. Because when others do that, the flow of data moves and they aren’t in the middle anymore. They might still have your data but they won’t have you. And that’s where the value is.

And remember, just when you think you have control, a new generation of users arise and they’ll want revolution. Dear Microsoft, Yahoo, Google, and Facebook. You don’t have to control my data to provide me value.

Update

Bruce Schneier just wrote a really good essay on the issue of data and privacy. Ties in nicely with this post.

5 ways Facebook can leverage their platform and start justifying a $15 Bln valuation

Paul Buchheit wrote an interesting post a few days ago called “Facebook knows who you are, and that is worth more than you think”. As an ex-Google employee and now one of the founders of FriendFeed, he knows what he is talking about.

It’s very fashionable to declare that Facebook is an over-hyped fad and will never make any real money, certainly not enough to justify it’s insane $15 billion dollar valuation. At first glance, it’s easy to understand why some people might think it’s a toy — most of the activity there seems to involve biting, poking, and joining groups with funny names.

However, I think that assessment misses out on something very interesting: Facebook is capturing everyone’s identity and relationships. Of course there’s some noise caused by random friending, but by examining the larger graph as well as other details such as location, affiliations, interactions, and of course explicitly entered relationship details (”how do you know Paul?”), they can get a pretty good idea of which people are actual friends and acquaintances.

He goes on and writes that people that rant about Facebook and its business model aren’t using enough imagination.

Perhaps a people directory doesn’t seem terribly valuable, but if you can’t imagine how to make money from knowing everyone’s identity and trust networks, then you aren’t being very imaginative.

I believe that this last sentence is important. It not only discusses opportunity, but it also shows how incredibly vulnerable such a business model is (will get to that in a second).

Facebook stores one of the largest social graphs in the world. With their incredible user base, and their viral methods to gain more insight in users and their relationships they are building an unprecedented people’s directory. Facebook asks users that add friends about their relationships, it has viral applications that only work if you “infect” your friends with it too, and it seems to be moving in the direction of interaction, providing its users with chat functionality. Every action of every user on the Facebook platform is stored, analyzed and added tot the social graph they are building.

The database must be immense by now and growing every minute. From the perspective of Facebook this database with identities and relationships forms the value that is to be leveraged. The Facebook business model depends entirely on that leverage.

The information stored in the Facebook databases must be a marketeers wet dream. Instead of working with “old-fashioned” demographic information to reach customers, Facebook provides the marketeer with a platform that allows almost any kind of dissection of user groups into specific customer types. Talk about possibilities to target customers (what a terrible phrase that is). Marketeers are idiots of course (no I didn’t mean you ), so they won’t really be able to leverage the possible value.

There are a gazillion ways to use the information and create value from the Facebook database. Targeted advertisement, brand campaigns, specific customer interactions, targeting specific customer types, “social” search, “friend referrals” (Beacon was a very poorly implementation of this), etc. etc. But having all of this data does come at a cost. Facebook has created a perfect conceiled advertisement trap, but it’s a trap they had better not fall into themselves. The trap is formed because Facebook has chosen to make the social graph the most important aspect of their business model. Instead of directly leveraging customer value, they are leveraging network value.

The problem with this choice is trust of course. You have to be extremely careful that you aren’t leveraging too much of the data you collect for commercial purposes. The users, often unaware of the data collection and purpose of it, will not see the added value in that. They will most likely lose trust in the service that hosts their user profile and friend network if it turns out to collect data for commercial purposes. Facebook already has to deal with this problem with the increased friend spamming that is taking place, for example with 3rd party developed applications trying to collect their own social graph data.

A great example of a friend spamming application I received. I have to forward it to other friends to see its content (didn’t do it BTW).

So what can Facebook do to leverage their social graph data? How can they turn Facebook not only into a success in terms of nr of users and traffic, but also in terms of revenues? Here are my 5 tips how to make Facebook more valuable to its users and more profitable at the same time:

1. Focus on user value first, then leverage the data, no the other way around. It means getting rid of advertisement in user interactions on the Facebook platform. It doesn’t add value to the interaction and it often hurts the trust relationship Facebook has with its users. Alan Stern writes about the poor quality of the ads in Facebook. Its sits in the way of interaction. It also means getting rid of the 3rd party applications that have the purpose of collecting user data. Especially stop the friend spamming apps.
2. Focus on interaction. Social networking isn’t about user profiles or social graph data, it’s about interaction. Stimulate interaction, provide services that allow users to interact in ways they couldn’t before. That’s user value. And advertisers have no purpose or any value in interactions between friends. They aren’t part of the conversation, they are trespassing.
3. Think mobile. What is the single most successful business model that is entirely based upon interaction and user value? It’s mobile of course. People love to interact. They use their mobile many times a day to call and send SMSes to each other. And they are obviously willing to pay a lot of money for it. I can’t understand that a service with such web presence isn’t capable of mobilizing its users. The applications are there, but they aren’t being used. Facebook lacks focus on mobile, a possible revenue generator.
4. Open up the walled garden. Even though a lot of users aren’t aware of it, there are bound to arrive new competitors that provide valuable social interaction services without locking the customer in. Human nature will always find a way out. We don’t like to be trapped. Opening up has two important upsides. It forces you to think in terms of user value, because now you have to deliver a better service than any competitor. And it makes you have to trust your customer, and not ruin that trust by doing something evil. Opening up is also needed to be successful at point 5.
5. Leverage the social graph data outside of the Facebook platform. The future of Social Advertisement lies outside of the network. There is no value in trying to become commercial within Facebook. Facebook should be about interaction, remember. But outside of the Facebook platform these users will perform actions where the social graph data becomes handy. Think about it for a moment. The real value comes only within the context of a user searching or buying something on-line. That is where the data becomes valuable. Why? Because it helps the marketeer to provide me with advertisement that, in itself, has value within my context. I don’t want advertisement in my social interactions. But I do want them when I’m searching or buying stuff. It’s a knife cutting both ways. The user gets value, and Facebook can maintain it’s trust relationship with its user base. I’m not so sure automatic friends recommendations will work the way everyone hopes it will. if I need a recommendation from a friend, I’ll ask. No automation needed there, unless I can find it at the place I’m buying (e.g. finding a bookreview at Amazon written by someone I know). The newsfeed and beacon implementations of it do not even get close to real life recommendations. We need conversations, not Orwellian messages telling us about the shopping behavior of a friend.

I agree with Paul Buchheit that with imagination there is a lot of value to be gained from knowing the identity and relationships of people. But I also believe that leveraging that value is pretty difficult and requires a constant balancing act. Facebook has the users the traffic, the data. But it remains to be seen if they will be able to convert that into enough revenues to justify a $ 15 bln valuation.

I’m sure there are many other ways possible too. Let me know what you think.

Dreaming away about a user centric web

FactoryJoe wrote an interesting post earlier called “Relationships are complicated”. In this post he talks about the (technical) difficulties to support complex (on-line) relationships. He provides (an excellent) example of the way Facebook deals with this complexity, reducing your relationship to a static tic box in which you can set a few options.

(image taken from FactoryJoe blog post)

Even though human relationships are complex to model, FactoryJoe still feels there is a need for something he calls the portable contact list:

Put another way, it’s not good enough to simply dismiss the trend of social networking because our primitive technological expressions don’t reflect the complexity of real human relationships, or because humans are just one of kind of “object” to be “semantified” in TBL’s “Giant Global Graph“… instead, people are connecting today, and they’re wanting to connect to people outside of their chosen “home” network and frankly the experience sucks and it’s confusing.

He defines a few possibilities to support this need:

I can say that, from what I’ve observed so far, these are things that computers can do for us, to make the social computing experience more humane, should we establish simple and straightforward means to express a basic list of contacts between contexts:

• help us find and connect to people that we’ve already indicated that we know
• introduce us to people who we might know, or based on social proximity, should know (with no obligation to make friends, of course!)
• help us from accidently bumping into people we’d rather not interact with (see block-list portability)
• helping us to segment our friendships in ways that make sense to us (rather than the semi-arbitrary ways that social networks define)
• helping us to confidently share things with just the people with whom we intend to share

Read his post for more detail. It’s good reading! After reading this, I thought about this for a while. I agree with FactoryJoe that human relationships are very complex. It would be very difficult to model them correctly, even if you would try to infer information about these relationships from my interactions. The value of a relationship depends on so many complex factors that I doubt this could ever be automated. Just think about it. Factors like how you’ve met, mutual experiences or friends, earlier interactions, mood, physical meetings, character, the list goes on and on.

There is one “program” that can handle that complexity easily and instantly. Why, that is you of course! Humans can deal with the complexity of handling these relationships. I may have thousands of (on-line) contacts, I usually know which are important to me and which aren’t. It is a dynamic process that has different outcomes depending on my mood of that day, the interactions I’m having, the things that interest me most at a particular moment, the amount of coffee I drank etc.

I believe that the concept of a portable contact list is a nice technical solution to the wrong problem (will get to that in a moment). FactoryJoe and all those working on it are using the current web 2.0 models to describe the problem (’have your friends with you”) in the context of current walled garden social networks (aka social graph data hoggers). Each social network has it’s own “contact list” format. They are unwilling to set that free, or have it accessed from outside of the walled garden because their entire business model is is build upon the assumption that if you “own” the social graph you can make an advertisement fortune out of it. This is a pretty dumb business model really. People use social networks for interaction, and there isn’t room for advertisers when I interact with my friends.

Recently Microsoft joined in on this ‘lucrative’ business model. Partnering with some of the largest social networks, Microsoft has defined a new standard for the portability of contacts. Using that standard users can now safely exchange their relationships between Microsoft Messenger, Facebook, Bebo, Tagged, Hi5, and LinkedIn. While this sounds like a great solution for the user, it really isn’t. Just think for one second about this. Why do these social networks all of a sudden allow the user to move his data in and out of the network? They aren’t doing it to provide the user with value, that isn’t their main business model. No, they all simply want a larger piece of the social graph. If they can get their hands on interactions the user has outside of the social network, it makes the social network as a social graph data hogger more important.

The real problem isn’t a portable contact list. The real problem is that none of the services today provide the user with the tools to allow himself to be responsible for his on-line relationships. My interactions with others are mine, they shouldn’t be owned by a social networking service. So instead of thinking about a portable contact list I would like to see a solution worked out in which users own their own on-line relationships, regardless of the service they are using. The data belongs the the user themselves. If we decide to become on-line friends, then there is a mutual exchange of the most relevant information that allows us to interact. If I then choose to go over to Facebook and use it for interaction, I already have my friends with me. I can make intelligent decisions on what information I allow Facebook to see, but essentially Facebook becomes a broker service that allows me to interact with friends, even if neither my friends or myself are on Facebook! Any social network would just be there doing what it should be doing, facilitating interactions. I could Twitter with friends, follow a few using Friendfeed, or whatever, without having the need to import my contacts. They are already with me. They are in my pocket, like a small address book, privately kept away. Secure, perhaps similar to a credit card. I can make transactions on-line (e.g. interact with others), the site that services me would simply be the intermediary that lets me interact with friends. It’s like a jigsaw puzzle piece. if I provide it to a service, connect it so to say, I have my friends to interact with available. But it’s only temporary. As soon as I’m done, I’ll disconnect and taking my friends with me again.

The great thing about this is that it solves a number of (privacy) issues. The users get to own their data, interactions, contacts. But more importantly. It forces the service provider to become just that, a service provider. Not a social graph data hogger, not a destination site, but an organization that services travelers passing by. No need to fight over data, over social graphs. The user has needs, and the service provider that services them best will win. It puts the focus of the service provider on providing value to the customers it serves. It is the analogy of a gas station. A traveler drops by, gets some gas using a universal connection method, pays for the value he gets, and moves on to his next stop on his journey.

And the things FactoryJoe wants to resolve would still be possible. I could allow my friends to catch a glimpse of my interactions with other friends, so that new connections may be born (social proximity). I could find people if they want to be found. I can block interactions with the people I don’t want to interact with. And most important of all. I am responsible for my own address book. I can manage it the way I want, segment it the way I feel like.

This sounds like an easy to resolve problem. But of course it isn’t. It requires thinking through what such a personal address book would have to look like. What maintenance services the user needs to keep it updated and managed. Exchange protocols allowing unknown people to become on-line friends.

But the most difficult thing to resolve is the fact that web 2.0 service providers need to rethink their entire existence. Instead of becoming social graph data hoggers they would have to become user value service providers. That step may very well be too big for them to take. Most likely we would need a web 3.x revolution to make that happen. I don’t mean semantic web here, instead I would argue for a user centric web.

In a user centric web the user is in charge. He owns his personal data, his privacy, his own interactions. He can connect to the user centric web anywhere he wants, using his personal, always fitting key. From any of the contact points he chooses, he can start interaction with his friends. The contact point becomes a user centric service point. The user simply pays for the value he gets, instead of getting bombarded with unwanted advertisement. Interaction with friends is the responsibility of the user. Meeting new friends too. He isn’t forced to go to a specific destination (a walled garden approach). He simply starts his interactions from any place he wants. It would force the services to open up, to be available anywhere the user wants. And I don’t mean by providing programmer’s API’s so that programmers can interact with a site (a site is a destination and the API is there too lock users into that site). That is patching up flaws in web 2.0. No, I mean opening up in the sense that I can always access the service, no matter where I am or what I am doing. It’s a bit like having no urls in advertisement really. Instead of focusing on destination (= url) we might focus on finding the service (=search).

What have I been trying to prove with this post? Well, first of all, I can’t draw a good picture no matter how hard I try But I’m a bit of an idealist about the user centric web. It sounds great, but I don’t think it will happen anytime soon. We need to get the power to the people first. And I doubt that Facebook, Friendfeed, Twitter, and the web 2.0 likes will be willing to give up control over “their social graph” just like that. But then again, it doesn’t hurt to dream about it every once in a while.

It’s about interaction stupid!

Justin Smith has an article up this morning (well for me anyways ) in which he suggests that Facebook isn’t trying to be the biggest content or entertainment platform, but instead tries to dominate as a communications platform. In his words, Facebook wants to “own”communication with your friends”.

Justin is, in my opinion, only half-right about Facebook’s intentions (more on that in a second). Communication is important, more important than anything else.  Last year Tim O’Reilly mentioned a comscore report that showed that people on Facebook spent most of their time browsing heir own or other people’s profiles, followed by interaction with Facebook applications. Shelly Farnham just published research results in which she looked at the success of Facebook applications. Why do some work and others not?

Her research shows that people interact mostly with applications for communication needs. Or as she says it:

In reviewing the dominant types of applications, it is clear that most of the applications are helping users achieve social goals such as improved communication, learning about the self relative to others, finding similar others, improving self-presentation, engaging in social play, and engaging in social exchanges via gifts and media. Despite its shifting demographics, Facebook is still very much a social arena in the private, personal domain, not the professional domain.

I believe in interaction. Communication is just one aspect of interaction. But interaction is what’s most important. It’s what makes us tick so to say. Now back to the article written by Justin. He feels that Facebook wants to own your communication with your friends. While I think he is right about that, I doubt that Facebook is setting that as an end-goal for themselves. Facebook isn’t a communication platform first.

Facebook is a social graph data hogger. Their sole purpose and existence on this web is to own the biggest social graph in the world. If communication gets them that graph, then they will use that. but only as a means to an end. Owning the biggest social graph helps them to maintain their business model. Justin touches the subject a little when he says:

While I hope Facebook can co-exist with and reward developers of communication-oriented Platform applications, I think Facebook is smart to want to own the most important channels used to communicate with your friends. While it may take a while to figure out how to monetize these new communication channels most effectively, people will always stay most engaged with services that provide the most value, and core communication tools are some of the services that can be most enhanced by ownership of the social graph.

Facebook wants to hold the largest walled garden social graph they can get their hands on. It is the main fuel for their business model, serving ads. But I don’t believe in that business model within the context of social networks. And the main reason I don’t believe in it is precisely because of the way people use social networks. They use it for interaction. And advertisers have no purpose or any value in interactions between friends. They aren’t part of the conversation, they are merely trespassing.

The irony in this off course is that Facebook doesn’t really “own” the social graph. The social graph only exists because of the users within that. If it is “owned” by anyone, then it should be owned by the users that create it.

Facebook only gets to see a small part of that graph anyways. I have many friends I communicate with (both on-line and off-line), none of which are on Facebook. While Facebook does have a mind blowing amount of users worldwide, the amount of communication that actually passes through their platform is infinitely small.

Let’s see. According to this site there are currently 1.3 Bln Internet users worldwide. Facebook has some 33Mln users according to Mashable. So some 2,5% of the Internet population is on Facebook, a pretty impressive number I’d say. But there are a few interesting things to note. First of all, I suspect that much of our communication is spread over a lot of different communication channels. We have physical communication, mobile phones with SMS and voice calls, e-mail (probably more than one address), IM, and at least 5-10 different social networks where in 2,5% of the cases Facebook is one of them. So an average person probably has at least 20 different means to communicate.  We probably interact anywhere between 100-1000 times a day over those means (unless you are cut off and isolated from the world around you). Just think of all the e-mails, SMS, IM’s, voice calls, physical conversations you have on a day to day basis. I would argue that less that 5% of our communication goes through social networks. It means that 95% of all communication of those 1.3Bln Internet users worldwide isn’t passing through social networks. Even e-mail, already dead and buried by most web 2.0 evangelists sees way more interaction than all social networks together. So let’s burst this “Facebook want’s to own your communication with your friends” bubble right here and right now. They can’t and will never be able to own that.

Another interesting thing to note is that the Internet growth is dominated by Asia, Africa and Latin America. These are all regions where Facebook is not dominating social networks. I seriously doubt that Facebook will “own” the biggest social graph in the world. Google’s Orkut, for example, is much more popular in these regions.

The thing with any walled garden service is that user’s find ways around that. Where Facebook and other social networks try to lock-in their users, the users simply use other services to get around that wall. It’;s human nature. We like freedom and will always find ways around any old-fashioned web 2.0 walled garden business model.

Facebook won’t “own” my communication with my friends. If they try to do that they will fail.  My interactions with my friends belong to us. Anyone that doesn’t understand that and tries to interfere with that will not provide users with value. And a business model without user value is sure to fail.

If you want to enter this communication arena then you first need to get rid of the destination based business model. If I have to go to Facebook to communicate then Facebook has already lost the fight before it started.  The web entrepreneur that puts me in the center of my communication needs allowing me to communicate any where, any way, any time using the means that fits best will provide me the best value. Owning a social graph or a walled garden isn’t really what matters. Allowing the user to interact any way he wants is what matters. Fred Wilson understands this. Read his post called everything, everywhere. That is where the real value lies. I guess I will say it just one more time. It’s about interaction stupid!

Facebook popularity will decline because of a wrong business model

In Dutch culture people rarely stand out of a crowd. There are a lot of sayings that (badly translated) essentially say something like: “just act normal, that’s crazy enough”, or “don’t stick your head out”. We all try to fit in, be the same and feel uncomfortable when people stick out of the crowd. If someone performs better than others, he or she almost apologizes for it (I was just lucky). In Holland it is not abut winning, it’s about playing the game. That’s probably why we will never win the world cup in soccer, in general perform good but not great on important tournaments like the Olympics or world cups.

Interesting enough a very similar tendency can be seen when people discuss the success of web companies. There are a few untouchables, companies we never speak badly off. Google is great, and there isn’t much it can do wrong.

In other cases however we tend to be more harsh. Think about the monopoly Microsoft had the past years and the way people started reacting to that. In some cases this leads to annoying customers or press, but sometimes it also leads to innovation and competition. If Microsoft hadn’t tried to monopolize their Internet Explorer there wouldn’t have been a Mozilla organization that is now celebrating it’s incredible 500Mlnth download of their popular Firefox web-browser.

It seems that when a new web initiative is showing incredible growth figures we tend to wait for it to start making mistakes or showing decline again. After the initial “wow” people start thinking about how this unnatural growth can’t go on forever and when that day comes, we all knew it would happen, right? This is exactly what seems to be happening with Facebook right now. They have been able to create unprecedented growth in the past 2 years and are now one of the largest Social Networks worldwide. But now bloggers are declaring Facebook to be dead after they had a first dip in their growth figures. In January 2008 the number of Facebook users declined from 8.9Mln in December 2007 to 8.5 Mln in the UK. This was the first decline after a 712% growth overall in 2007.

Why does Facebook stir up such emotions? Why are people waiting for them to fall? Is it because they grew too fast? Because they are constantly measured against the success of Google? Is it because Mark Zuckerberg seems to be having a difficult relation with the press and the blogging world? Or is it because people just love to see something so successful break down again?

I’m not sure. But I do know that screaming out loud Facebook is dead because of a small dip in the number of users in just one country is plain stupid. There are web services out there that wouldn’t mind having such a dip if they also had the number of users and traffic Facebook still has.

Personally I think Facebook will face some really difficult times and I have doubts if they will remain as popular as they are today. But I’m not basing this on a small dip in the number of users. I’m basing my opinion, for what it is worth, on their chosen business model. Facebook has fallen into the $16 bln advertisement trap and they can’t and won’t get out of it. I started a countdown on the downfall of Facebook a while back already. The business model, based upon providing a free service and compensating that with ad harassment, has an incredible upside. It allows services to attract users really quickly and show remarkable growth figures. But with the almost unnatural growth comes the pain. Facebook has faced platform issues. They face the backlash of unsatisfied users that organise themselves in protest groups within Facebook. They face the press and blogging fury that arose when they tried to monetize the build network using SocialAds and Beacon. They have to deal with friend spamming, which is caused by 3rd party application builders that want to lift off of the success of Facebook to create their own glory and fortune. And now they face the press that can smell blood. And all of this isn’t because of Mark Zuckerberg, the incredibly childish or lobotomy like applications Facebook has to offer its users. It’s the business model.

If your business model is based upon monetizing of the Social Graph or network that has been build then you are bound to make the network more valuable than its users. It means that spamming friends is ok, because in some cases these friends might just sign up for yet another zombie-like application. It means that showing ads to relevant profiles is more important than trying to get a meaningful interaction between a user and a brand. It means that customer lock in is much more important than customer or data portability. It leads to the false illusion that sheer numbers of traffic and number users are more important than the quality of the service you provide. And most important of all, it distracts you from the one thing that makes you different from all your competitors. The fact that you are there to provide the user value. Once you lose that notion, your business is likely to decline. And that is what will happen to Facebook and the like in the end. As long as they aren’t monetizing user value, they will be fighting a cause that will be lost in the end.

That is why we like Google so much. Google monetizes user value. They use advertisement, just like Facebook. But they have managed to make the advertisement in itself valuable within the context the user gets to see it.

That is also why Firefox will win in the end over Internet Explorer. Not because of their 500Mln downloads or their technically superior product. No, it will  be because they have chosen to open up the browser. to develop and innovate it with and by its users. To be open about the mistakes they have made and the bugs it still contains. And the assurance they will resolve those to make it a better product.

Facebook isn’t going down because we are all jealously waiting for them to fall down. Facebook is in trouble because they are forgetting the one thing that is really important in business. Provide the customer with value!

I will end this by quoting Rolf Skyberg who has said it better than I could have:

This “luxury lens” also puts close scrutiny on some topics like “social networking”. Is the value you get out of social networking in any way a luxury?

If you had unlimited resources (money), could you deliver a better and more profoundly useful experience than we’re seeing with FaceBook and MySpace?

If the answer is yes, then you should get on building it, because obviously somebody is not delivering on an opportunity.

It’s about interaction stupid!

Yesterday I wrote about the problem I have with the Facebook business model (actually, it is a web 2.0 business model flaw).  I am not concerned about advertisement in general. Advertisement is fine. It is a way for a brand to expose itself to its customers.  Its a way for Google to become the most successful company ever.

But the common mistake most web 2.0 companies are making is that they treat advertisement as the main  revenue stream or even as venture capital. They try to leverage the need for a brand to expose itself into a business model. It sounds like a great plan. It provides the web 2.0 company a stream of revenues by providing the advertiser with a podium. And it provides the advertiser a “cool” way of exposure towards potential customers. But the flaw in the business model comes with the third actor on the platform, the user.  It is easy to step over the needs of a user, when your business plan clearly shows sky high advertisement revenues and potential acquisition by one of the biggies like Google or Yahoo.

But the user is not always in need of exposure to advertisement.  That is where things go wrong. We are building these great advertisement podia, but the fans aren’t there to see them. The easy way out is to provide the user with something else that is valuable to him, and then hassle him with the advertisement anyways, cause that’s what the business model says we ought to do. The user gets free social networking capabilities, free storage, free profiles, free social graphs, and a free podium to express himself. That’s great, honestly, but it doesn’t resolve the main business model issue. As a consequence, the web 2.0 company starts monetizing the social graph, the profiles, the platforms by introducing “targeted” ads to its users.

But what happens to things that contain no value to the user? Exactly. They get ignored. And there is your catch 22. The web 2.0 business model is financed by advertisers who pay Facebook and others over $16 Bln advertisement this year, with a false illusion of reaching their targeted audience. The harder they try, the more they will be ignored.

And the user? He doesn’t care. He gets all spoiled with “free” stuff, that isn’t free at all. But the bill isn’t payed by him, so who cares. It is the most worthless driver for a business model. The Facebook user doesn’t mind SocialAds, is the tech blogging community fighting a lost cause? I don’t think so! If ignorance and indifference were the main driver for a web 2.0 company I’d fire the CEO and proclaim the main investors to be idiots!

I just don’t get it. The people I admire most are always those that think in terms of user value. But do we really need icons to tell us what is right? Do we really need marketing research telling us what the customer thinks? We only need a basic understanding of human nature. And as we are all part of this, we can always ask ourselves what is important, what matters.

Following Rolf Skyberg’s idea to keep Maslov’s hierarchy of needs in mind people have physiological, safety, love/belonging, esteem, and self actualization needs. Lets skip the physiological needs for now as the web can’t really provide any solutions (other than e-commerce) for that. Look at the other needs.

I would argue that it is interaction that drives most of these needs. Love and belonging, self esteem, respect from others or for others, self-actualisation. These needs are fueled by our interactions with others. Interaction is the most important thing that defines us. My interaction says more about me than any profile. We invented transport, the telegraph, and the telephone to break through physical barriers and interact with others far away. We invented the mobile phone, e-mail, chat, social networks, blogs, twitter to break physical barriers and reduce transaction costs of interaction. These virtual tools bring us new barriers, but technology always finds a way to clean up its own mess.

E-mail brings us spam, and an asynchronous demand of the sender to get an answer of a receiver.  Chat brings us synchronous on-line conversations, demanding our immediate and full attention. Social networks bring us the social graph and a poor excuse for interaction called a newsfeed. It also brings us privacy and data portability barriers. Twitter brings us easy sharing of thoughts and emotions, but at the same time, due to its asymmetrical relationships, sometimes makes me a groupie instead of a friend.

But these barriers can be overcome. And it starts with the acknowledgment that the current web 2.0 business model has got to be replaced by something better. No more free ad-based services leading to walled gardens, user and data lock -ups or -ins, indifference, waisted advertisement spend, the illusion of providing value to a user.

Instead we need business models that are user centric and monetize user value.  And the great thing about such a business model that it solves the current issues with data portability and privacy automatically. It’s what Chris Messina calls the citizens web, I prefer calling it the user centric web. If user value is the core of your business model, then privacy controls are included, and your data is your own. We wouldn’t need Tim O’Reilly calling out rightly “It’s the data stupid“,  or Doc Searl pointing us to VRM, because service providers thinking user value would make it a priority to put the user in charge. We wouldn’t need Dick Hardt to call for privacy and identity 2.0 because it would be in the genes of the business model to implement this correctly across the web. And we wouldn’t be thinking about mobile advertisement but concentrate on mobile interaction, because that is what the device is really about.

All it needs is investors with balls, willing to invest against the mainstream  but deteriorating web 2.0 business models. And entrepreneurs who build user centric services and aren’t afraid to let go of the $16 Bln advertisement trap. It also takes courage from the advertiser, who needs to understand that spending all that money on social networks is a total waist. It is an illusion to think you are adding value to the interaction, that you are adding value to Maslov’s hierarchy of needs. Forget it, you are merely trespassing the conversation. Instead, use that money to build your brand by improving your products  and services thus providing true value to your customers. And use real interaction with your customers to ensure you know how to improve your products or services. And finally, it takes courage from the user. To understand that “free” always comes at a price. And that, even though you seem trapped in your favorite social network, someone will come along and set you free.

I want us to work on the user centric web. But first, we need to get rid of the web 2.0 business model. We must break through this immense tough barrier to become free again. I know I will give it a try, because it is the right thing to do. If there are investors out there willing to give it a shot, or service creators that think user value is the way to go, you know where to find me!

Let Facebook be a data hog. User centric thinking will win in the end

Facebook is under fire, this time over data portability. A lot of debate is going on right now, but few address, in my opinion, what is the real issue. More on that further down the post, first a short overview and some comments.

Jason Calacanis has given Facebook a final warning this weekend and is now preparing for a (tech blogging) war. In his post called “The wonderful horrible life of Facebook users and their data (or, ‘data hogs get slaughtered’)” he lashes out to Facebook.

He starts with:

All of this comes up because Facebook has done three things that are at once extremely innovative, extremely rude, extremely helpful, and extremely disconcerting:

1. They are collecting and republishing user data on a level not before seen by users.
2. They are allowing advertisers to use this data to reach these users.
3. They are not giving this information–information that has put their value at $15 billion–back to their users.

He goes on and focuses the rest of his post mainly on the problem of Facebook collecting data, but not giving it back to the user:

Facebook is pushing themselves into a position of being viewed as ungrateful data hogs: amassing tons of information, selling it under false pretense, and not sharing it with the folks who gave it to them.

Not good.

You can get away with this kind of behavior for a short period of time, but not for the long run. There are just too many folks out there like Doc, Dave Winer, Marc Canter, Robert Scoble, Steve Gillmor, and Leo Laporte out there today who will call you on it.

Again it comes back to bloggers and their influence of the marketplace… I love it.

The message from bloggers to Facebook is clear: if you’re a hog you’ll be slaughtered. 

His post, triggered by Doc Searl, started a series of responses making the topic end up high on the TechMeme list. Jason addresses some valid points, but Frederic, from the Last Posdcast, downsizes the rawl noting that Facebook users don’t seem to care about data portability or Facebook trying to monetize that data.

FactoryJoe has written an excellent post on the subject of data portability. He writes about the Citizen centric web (he has written about it before, look it up on his blog):

This notion is what I think is, and should, going to drive much of thinking in 2008 about how to build better citizen-centric web services, where individuals identify themselves to services, rather than recreating themselves and their so-called social-graph; where they can push and pull their data at their whim and fancy, and where such data is essentially “leased” out to various service providers on an as-needed basis, rather than on a once-and-for-all status using OAuth tokens and proxied delegation to trusted data providers

In response to the commotion Nick O’Neill from AllFacebook writes:

If I choose to use someone else’s service and enter data into it, they own it. That’s why I call it “someone else’s service.” If you want to own a bunch of data, go create your own service and get people to use it. Suggesting that Facebook let a user export all of their data in XML or CSV format as Jason Calacanis suggests, is slightly ridiculous. I can understand having ownership of my own social graph but that’s where it ends. Even that would be a huge step for Facebook.

……

In theory this makes a lot of sense but personal user data is a competitive advantage for many services. If a user invests hundreds of hours rating movies, books or anything else, they aren’t going to want to go somewhere else. Letting users own their data will force competing sites to compete on services alone. This could be a good thing but it also could be a bad thing when the technologies developed by many of these sites are ultimately commodities. Letting users own their data could be the downfall of many web 2.0 sites.

Oh boy, Neil, either you don’t get it, or your defending a lost cause. You feel threatened by customers that want to own their own data? I wonder what Neil would do if he knew an insurance company is sponsering his local supermarket and analyzing all his buying behavior to see if Neil has the optimal insurance package. And when Neil finally decides to go for a new health plan he gets the “What’s up with the unhealthy food you bought last weekend…..?” treatment. Fear is a lousy motive for defending a flawed business model. Who cares f it is the downfall of many web 2.0 businesses. They probably aren’t providing true value, otherwise there wouldn’t be a downfall.

I think that data ownership, portability and privacy are all sub problems of one main issue. The one issue that doesn’t seem to get addressed as much as I would hope it to be. The issue is not data, the issue is Facebook’s faulty business model.  If you are going to provide a “web 2.0″ service for free you need other ways to earn revenues. Someone has got to pay for all those servers zooming and that data being transferred. The current web 2.0 free (but ad-ased) business model is the easy way out. But I have noted before that it is fuelled from the wrong side. It isn’t based upon user value. It is based upon network and ad monetisation. And although this can be a perfectly legitimate business model in some cases it doesn’t work in social networking. It has a few major flaws that make it a terrible business model:

1. It enforces walled gardens because ad revenues must be protected. If you are “on” the network, Facebook makes a living, if you are “off” they don’t
2. It enforces network value thinking (or social graph if you prefer a more sophisticated term) not user value thinking
3. It provides the user no value, and it provides the advertiser an illusion of value
4. It spoils the user, thinking everything comes for free, thus making business models that are based upon value creation hard to implement

I could make this list longer if needed, but the point is that the fundaments of the business model are not based upon user value or user centric thinking.  I don’t agree with the idea that the user doesn’t care. Of course he cares. But right now there aren’t serious alternatives for Facebook or MySpace. And because they protect their data so fiercely the user is trapped into a $ 16 Bln advertisement trap and is unable to get out. I have called out for a revolution before, to get out of this trap, but I wonder if that is really needed now.

What we need now is people that think user centric. People that build and invest in user value business models. Models in which the user pays for value, thus ruling out the need for a flawed advertisement business model.  You know it is the right business model, because it inherently solves the”who owns the data” problem. Data portability would be a standard asset of the business model, as would be privacy controls, and user value services.I’m not against advertisement, there are $20 Bln reasons to get advertisement right. 

I say we leave Facebook alone to do its thing. Let them exploit the user and make a living out of advertisement. If the user doesn’t care? Fine, let them be. Let us then work on a new web, a user centric web in which the user gets value, controls his data and privacy, and in which he is willing to pay for it. Let’s see how long any walled garden can survive once the user finds out there are much better alternatives around!

Maybe Howard Linzon predicts it right when he says:

But, we can count on this ‘who owns my data issue ‘ to be resolved much quicker now that Facebook has to monetize. Tempers will continue to flare and something is going to give.

The user doesn’t care about Web 3.0 or the Social Graph

Interesting post by Sir Tim Berners-Lee about the developments of the Social Graph. He writes:

We are all interested in friends, family, colleagues, and acquaintances. There is a lot of blogging about the strain, and total frustration that, while you have a set of friends, the Web is providing you with separate documents about your friends. One in facebook, one on linkedin, one in livejournal, one on advogato, and so on. The frustration that, when you join a photo site or a movie site or a travel site, you name it, you have to tell it who your friends are all over again. The separate Web sites, separate documents, are in fact about the same thing — but the system doesn’t know it. There are cries from the heart (e.g The Open Social Web Bill of Rights) for my friendship, that relationship to another person, to transcend documents and sites. There is a “Social Network Portability” community. Its not the Social Network Sites that are interesting — it is the Social Network itself. The Social Graph. The way I am connected, not the way my Web pages are connected.

We can use the word Graph, now, to distinguish from Web.

He goes on and discusses the effects of thinking in terms of a Social Graph:

In the long term vision, thinking in terms of the graph rather than the web is critical to us making best use of the mobile web, the zoo of wildy differing devices which will give us access to the system. Then, when I book a flight it is the flight that interests me. Not the flight page on the travel site, or the flight page on the airline site, but the URI (issued by the airlines) of the flight itself. That’s what I will bookmark. And whichever device I use to look up the bookmark, phone or office wall, it will access a situation-appropriate view of an integration of everything I know about that flight from different sources. The task of booking and taking the flight will involve many interactions. And all throughout them, that task and the flight will be primary things in my awareness, the websites involved will be secondary things, and the network and the devices tertiary.

I’ll be thinking in the graph. My flights. My friends. Things in my life. My breakfast. What was that? Oh, yogourt, granola, nuts, and fresh fruit, since you ask.

Nicholas Carr in response asks himself whether or not Web 3 is the Social Graph. He rightfully wonders whether or not the user cares about this.

But while it’s true that technologists and theoreticians desire to abstract the graph from the sites – and see only the benefits of doing so – it’s not yet clear that that’s what ordinary users want or even care about. That’ll be the real test to whether the graph makes the leap from mathematician to mainstream – and it will also tell us whether a social network like Facebook has a chance to become a true platform or is fated to remain a mere site.

Sir Tim says a lot about technology (after all, he was the founding father of the World Wide Web), but I like his final observations about human behavior best. And while we can already predict this story will lead TechMeme, and the whole blogging world will be talking about Social Graphs from now on (the master has spoken), I am more worried about the language we are using to describe “next generation” services.

Let’s face it, the user doesn’t care about web 3.0 or social graphs. The user likes interaction, likes to meet friends, likes to share experiences. Right now there are entrepreneurs and existing platforms thinking about monetizing the value of web 3.0 (ehh I meant to say Social Graphs). Too bad. That is not what it is all about.

We need to think about user value, about user centric services. Forget about building social graphs, forget about social advertisement within those graphs. Think user centric, and design services that allow the user to do what he wants most, interact with his loved ones, friends, business, without being restrained or held back in some graph.

Monetizing user value instead of Social Graph value will lead to the most optimal use of the Social Graph for anyone in it. You may call that web 3.0 or the Social Graph. Not that the user really cares about it.

Getting the turkey ready for Thanksgiving

A lot of fuzz this morning about Facebook’s SocialAds and Beacons. Charlene Li from Forrester got her first personal, unexpected and unwanted encounter with Facebook ads as she found to her surprise that in her Facebook newsfeed there was a reference to a purchase she had made at overstock.com. Her biggest complaint about Facebook ads is the lack of transarency.

There is a whole movement arising now that want to put the pressure on Facebook. MoveOn.org is taking on Facebook Beacon ad strategy. They think it is a violation of Facebook user privacy. Facebook has respondend, saying the information is only shared with your friends, so no privacy issues there. Josh Catone responds to this and says that MoveOne.org might not be making a point that really concerns Facebook users, as it only has 8.000 people joining up right now. He is not so concerned about the Beacon project, but warns that a better and global opt-out switch (which isn’t there) would be good for the user. But he comes with another privacy issue, Facebook applications now seem to have access to your e-mail address.

I feel privacy is an issue, but not a major one. Lets face it, if you join Facebook and assume your personal information is only shared with your friends then you are, to say it nicely, a bit naive. I have to answer numerous questions these days about my relationships with friends on Facebook. This is all part of the Social Graph exploitation model in Facebook. I don’t answer any of these questions. Not because Facebook would use that information for SocialAds, but because it doesn’t provide me any value as a user. I already know I went to high school with you dude, no need to write it down.

Looking at the different comments sections the readers are at least widely spread in their opinions about Facebook SocialAds. Going from “They got to make a living” to ” I’m leaving this overhyped crappy service”.  Mathew Ingram gets it right (yet again), stating these woes are overstated.  He says:

As Justin notes, 100 times as many people got upset about the news feed as joined the Moveon protest, and that one blew over eventually. Maybe Facebook will tweak things so it’s more obvious, or give you the blanket opt-out ability — or maybe not. I think it’s mountain and molehill territory myself. Will I have to ignore news feed items about people like Charlene buying coffee tables? Sure. Just the same way I ignore people telling me they just added the Zombie application. Big deal.

And that is exactly what will happen. People will ignore it. It doesn’t provide them any value so SocialAds and Beacons will be yet another play toy for the advertisement industry that is ignored by the consumer! The business model just doesn’t work, as it isn’t based upon user value. I always like reading e-Bay’s Rolf Skyberg about user needs. He breaks it down into things that matter to a user. And that is still the best business model there is.

We are all getting ready for thanksgiving dinner. I wonder who is the turkey to be served by Facebook. Is it the user, or might it be the advertiser who has  spent $16 Bln in 2007 and will be spending $42 Bln in 2011 in on-line advetisement and thinking he gets  targetted audience from Facebook? I think Mark Zuckerberg will have a great meal, either way.

20 Bln reasons to get advertisement right

I do not dislike advertisement. If you are a regular reader of my posts, then you might get that impression. For example, I have started a countdown for the downfall of Facebook when they first mentioned their stealth ad system.

It is not advertisement I dislike, it is the effect advertisement money has on current web 2.0 business models I don’t like. It is the easy way out for investors and service owners. Provide something for free, and as a user deal with the consequences (you get ads). The current ad word auction model and underlying pay per click is fraud sensitive, and enforces walled gardens. The revenue generation machine of a “free” web 2.0 service is based upon locking users in the platform. Getting them in, and not letting them out. Of course, you need really massive amounts of traffic in order to get enough clicks to make an advertisement revenue living. But with size, operational costs increase, and with increase costs you need more traffic and lock in users harder. It is a deadlock situation where the user, the advertiser and service owner are trapped into. And a deadlock situation where everyone is held hostage rarely provides real winners. I have discussed other possible business models earlier, and will elaborate on that in the future. Some suggest that there lies an opportunity to offer customers premium ad free services, replacing the ad model. I have written about that as well, but from a different perspective. Don’t let people pay for not getting ads, let them pay for value they get.

We should try to rethink this advertisement model by taking the user perspective. It is his valuable attention the advertiser is looking for in this attention economy. If attention is a scarce commodity and economics is needed to control this, then the economic laws better start making some sense out of this user.

So what do Internet users do most? I’d say they spent most of their time on activities like: search, discover, interact with others, share things, publish, and buying and selling stuff. During some of these activities ads are good, and in some they are bad.

Lets start with the obvious one, search. Google gets that right. Search can be monetized with ad revenues. If a user is searching for something then a sponsored link addresses the need of the user. And as John Battelle points out, all search entries (often not controlled by the advertiser) are important brand building aspects. Let’s make no mistake about the value of this type of advertising. The IAB just reported a new all time high Internet advertisement revenue this quarter, passing the $5.2 Bln and up 25% with respect to last years 3rd quarter.

But lets also not forget that the majority of these advertisement revenues go to Google, as they have reported a $4.3Bln revenue the 3rd quarter, an increase of 57% with respect to last years 3rd quarter. So Google takes perhaps 75-80% of all on-line advertisement revenues and they do it with search!

Discovery is another activity. Whereas the goal of search is to find, with discovery the process is the goal. Earlier reports show that Facebook users do a lot of discovery. They look at other people’s profiles, pictures and interact with applications. Profiles feel as private space to a user. Combining those with ads is probably not a good idea. Building up social graphs will provide valuable information about relations, bu it cannot be exploited easily within the same network as the user is likely to distrust the motives of the advertiser. It becomes what Nicolas Carr has called the Social Graft. Discovery in relation to Facebook applications is different. Here is a chance to provide the user with value (through the application) and combine it with branding or advertisement activities.

People love to interact. A profile in a social network is filled with information about the way I would like to be viewed, it doesn’t necessarily depict reality. But interaction is more pure. It reflects much about me and my relation to the one I interact with. As interaction is mostly personal it is difficult to combine it with advertisement. The “this message was sponsored by” advertisement is invading my private space and won’t do. The same thing goes with more subtle forms of SocialAd advertisement. If I mention in my activity feed that I went to the movies, this might have value to my friends. But having this news being accompanied by a complementary SocialAd doesn’t provide my friends with value.

What SocialAds try to do is help advertisers influence word of mouth advertisement. Amazon makes a fortune out of it. If I get a recommendation for a product from a friend it will be worth much more than an advertisement from the product owner. We all know this phenomenon. Tara Hunt describes very well how advertisers should be connecting to communities.

It starts with trust and the buildup of social capital. It is about listening to your customers, not talking. But an advertiser who buys a Facebook page does not have trust in the community just by being there and adding fans as a friend. It needs to listen first, it needs to build up social capital within the community. But here is exactly where I feel Facebook might take a false turn with its SocialAds and Beacon scheme.

These fans are not fansumers and displaying their like of a brand or product in their newsfeed is hardly a “word of mouth” advertisement. In essence it is more like a personalised billboard which loses value very quickly as friends will see it for what it is, not what it was meant to be (an advise from a friend).

So let’s try to get rid of the illusion that the advertiser has active influence on word of mouth via SocialAds. Direct interaction with your customers is far more influencing. Word of mouth in the physical world is based upon a different process. By exchanging thoughts, emotions, speech, touch, look, feel we have meaningful interaction. In this interaction a recommendation from a friend builds up and creates value for me. By agreeing or even disagreeing the advise of our friends gains importance. This interactive process leads to word of mouth advertisement. It is futile to think that an advertiser can influence this process directly, unless they are in direct contact with their customer. People are thinking for themselves, better deal with it. The whole power of word of mouth advertisement lies in the indirect influencing.

There is one exception to the interaction activity. If a user is publishing, or self-expressing himself to a bigger audience, then advertisement may have value. It can create a podium for the user to self express and find an audience. Like an artist being sponsored by a brand.

That leaves buying and selling. Here advertisement can play an important role. People looking to buy or sell something won’t mind if advertisement is added to the orientation or transaction phase. Advertisement adds value to the user action, especially in the orientation phase where it acts as a specialised for of search.

So what do you think about this? I’m interested in hearing if you know examples where advertisement creates value for the user (not including search). Do you think that SocialAds will add value (besides making services “free” to its user?

There are $20 Bln reasons to get advertisement right. Google probably takes up 75%, leaving the rest of us with $4Bln to figure out how to apply advertisement in such a way that it draws the attention of the user and actually provides him with value. We better start working on it.

Google hits back hard with its OpenSocial plans but will the user benefit?

Well, there it is. TechCrunch reported it first (but everyone else has the same scoop!). Google is now revealing its social networking plans. Under the projectname OpenSocial, Google will launch a new set of APIs that application developers can use across social networks. This is definitely good news for the application developers. Instead of having to invest in yet another markup language or platform API they can do it all with one API. Very smart Google. It also matches a lot of the speculations I had on their strategy. As Mathew Ingram points out very nicely, Google has created the one ring that binds them all.

But let us not forget what that “one ring” was about. The real power of it lies in the hands of the creator, not in the hands of the one that wears the ring! Of course Facebook and MySpace have figured out that one for themselves, so they won’t be inclined any soon to join this Google blow to their kneecaps. I’m watching John Battelles take on this, as I always like his analysis.

It does take away a lot of the hype around the attempt of Facebook to launch SocialAds (here and a good analysis here). If Google can claim this central position (and they certainly have the capabilities for it) then Facebook’s attempts to leverage their closed network of approx. 50Mln profiles will be completely wiped away by the “We have access to approximately ALL Internet users worldwide” Google effort.

But what about the user. Will he benefit in the end? I have written a lot about flaws in web 2.0 and some of my wishes to correct them. It remains to be seen if he actually benefits. For example, I haven’t seen anything on privacy in the leaked Google plans. That will be an interesting one, especially if Google gets access to not only web pages and user profiles, but might also be able to leverage my interactions. A scary thought indeed, unless I get to control my own privacy. But the greatest threat to the user in my opinion is whether these Google plans will increase ad pressure on the web user. I am not a big fan of the advertisement model that currently is used as the mainstream web 2.0 business model. It inherently creates walled gardens, limits my options as a user and provides me with often unwanted confrontations with advertisers.

Having said all this I still think the world is better off with Google introducing these OpenSocial plans. It will scare the hell out of current successful but walled garden platforms like Facebook and MySpace. it will fuel an explosion of new and more open innovations. That is definitely beneficial to the user. But a warning is in place for Google. It only took a 3 ft small hobit and a lot of will power to end the domination of the ring that tried to rule them all!

Google’s assault plans on social networks

TechCrunch just posted an article in which they reveal that Google might be planning a “major assault” on the social networking scene.

I have written on the Google strategy before, and it seems that a lot of the things written down then are now becoming a reality. Google plans to open up all their applications, creating a social layer across all of them. But, in contradiction with Facebook, Google seems to have plans to open up the network two ways, not only allowing a user to us this layer across many different Google applications, but also across different social networks. It’s what many call “the web as a platform”. Scott Karp dismissed that term a while ago, quoting Google’s Jeff Huber:

A lot that you have heard here is about platforms and who is going to win. That is Paleolithic thinking. The Web has already won. The web is the Platform. So let’s go build the programmable Web.

This of course being a direct declaration of war on Facebook.

The most important asset according to Scott is data, and Google has plenty of it. Actually, I don’t really agree with Scott on this. Data is static, it is the application or usage of data that is important. It is not just about data, it is about interaction.

Google is definitely in a position to open up the social network space and even fill in some of my wishes to get out of the web 2.0 trap, I am wondering if they are going to make the right choices, especially when it comes to privacy. Google probably already knows everything there is to know about me, but can they handle my privacy as well?

And more importantly. Will they think user centric, or simply connect everything because technically they can create the APIs.

But my main interest will be on their plans of their mobile strategy. Opening up the web is one thing, being able to connect the web to the mobile space is much more interesting. That is where the money is. Through the mobile space we can get out of the web 2.0 advertisement trap and create working business models that are not based upon ad harassment.

Will Google understand this? They will, but as their business model is advertisement, I doubt they will fill it in the right (user centric) way.

Letting go of the connected age

This weekend I went away with my wife and horse to the countryside somewhere in the Netherlands.

It was somewhat a hassle to get on our way as we first had to pack, then get the horse trailer behind our car. Pick up our horse, called Glynnedd (see her picture below), and then drive a few hours to our destination. We were pretty excited, as it was our first trip with our horse outside (We started riding only a few months ago).

For some reason this weekend was the first in a while that we didn’t have access to any computer. It seems that everywhere we go there is always a way to go on-line. Not here. So what do you do as a 24×7 connected tech hero?

Obviously I took out my Nokia N95, my only life line to the (digital) connected world. I surfed to a few sites, looked at my blog, entered my first blog comment using a mobile phone (not very efficient), and remained connected a little via Twitter.

It got even to a point that I took my N95 with me on the first horse riding trip and took a few pictures sending them away to Flickr using Shozu. The quality of the pictures not being very good, as a horse rarely holds still while taking pictures.

I turned the phone to silence mode so that I could receive tweets without the message sounding through the Dutch countryside.

It was my wife that eventually put a stop to this connecting madness. When asked why I needed to be connected all the time to the world, while I could enjoy myself right here and now, I didn’t really have a good answer (don’t you hate it when that happens?). So I decided to disconnect altogether and focus on the event itself.

It made me realise that not being connected all the time is a good thing. Social networks, blogs, twitter, or any other web 2.0 service want you to be in their network all the time, living and sharing your life with others. But it doesn’t work that way. Sometimes you need to disconnect and be part of real life.

It is like riding a horse really. You need to go with the flow. The horse feels what you want and acts upon it, and you feel everything the horse is doing and can  respond to that. It is this interaction that makes it so much fun.

A good example of this interaction is when you are riding with 10 horses together. The fun starts when we get into a gallop with them. Horses are herd animals. Their natural instinct is to stick together. So if one takes off really fast, before you know it the rest follows into this stampede.  As a rider you can do two things. You pull on the bridle (the leather straps you see to control the horse’s movements. The resulting effect is that the horse tries to fight you as her instinct tells her to run along with the group. If you pull harder, the horse merely becomes stronger and will resist you even more. However, if you have enough trust in your ability to sit without falling off, you can also let go and allow the horse to follow the herd. Just go with the flow. The horse might make some unexpected movements (for example if one horse tries to kick another in gallop, or when the horse sees something unexpected). But in this flow you can see it coming and help the horse find its balance and path. And it is this flow that makes it so incredible and energizing to ride the horse in gallop with a group. If you are able to do a gallop while standing up like a jockey it is even more fun. The pressure is off the saddle, allowing the horse to go faster and the rider getting less tired (picture taken from Wikipedia).

Back to the always being connected web 2.0 thing. Do we really need to hang on to this concept. Does it really provide the value that the service creators are telling us? I don’t think so. It is the real life interactions that makes a difference. The web 2.0 services that we are confronted with are really only just tools to support this real (or digital) life interaction. So let’s stop acting as if our life depended on it. It is a tool stupid (stole that from Clinton), nothing more. It is not your social life, your  friends, your life supporting network (social graph) that is out there. It is just a tool that may support aspects of your real or digital life. And what can you do with a tool? Put it away sometimes, disconnect, and live happily ever after!

Counting down the downfall of Facebook as they set to introduce major ad play

Well the countdown has started. While the blogging and advertisement community seems exhilarated about the plans Facebook is about to reveal monetizing not only their user profile base but also the relations between its users (what is being called a social graph), I remain a skeptic of this move.

Ads and promotions in a personal space just do not work very well together. Imagine yourself hanging out with a friend in a bar and you are constantly distracted from your talk by the bartender waiving a poster in our face saying that the next Heineken sponsored concert of your favorite band is coming to town. What would you do? Embrace the barman for being so thoughtful, or leave his joint to get a beer somewhere else? Or imagine putting on your make up at home or somewhere in a bathroom and in the mirror there are these constant flashes of companies trying to get you to use a better product because it will make you look good (how does that make you feel)? Or, you are sending your friend a picture of the two of you together romancing in a beautiful restaurant somewhere in Paris, sponsored by “Nokia connecting people”.

It just won’t do! I am going to make a fool out of myself and predict the downfall of Facebook and the likes for pulling the advertisement trick on us. The countdown has started, lets see how long it takes for the user base to start moving to another place with no ads.

The future of social networks lies in interaction (not perse in voice)

Tim O’Reilly writes a good analysis about the announcement of MySpace and Skype that these will integrate MySpace IM and Skype Voice capabilities. Tim predicts that Social Networks will turn into smart address books, that a social network operating system will require interoperability between many applications people connect through and that many niches will appear from all of this. Read his article to get the details.

I like this analysis. Why? Because I believe that social networking isn’t about the network. It should be about the interaction between people. So adding voice capabilities will help support this interaction. But honestly, I don’t think it will be the main driver for change. Earlier I wrote about my 10 wishes to change web 2.0 and move into an era of interaction.

I believe that the first thing that needs to be done is a change of attitude by the service creators. As long as they feel that their way to create value is to protect the value of the network that the users create, things will not change. It is what Tim calls the social operating system. Google has the best cards in hands to accomplish that, with Search, Orkut, Jaiku, the Gphone, rss feeds, the buildup of user base in Asia (where payed mobile services actually work). But a bit of competition here would be welcome. Facebook won’t last, as their monetizing method forces them to use walled gardens and increased ad pressure on its users. This may be a bold prediction, as some think they are worth $15Bln nowadays. But, as with many of such services, in the end, the user will move away because the value he gets from the network is much less than the value he puts into the network.

Voice will be a nice add on, but it won’t be the main driver for interaction. Looking at the behavior of users they spend most of their time using e-mail, SMS, IM. Voice comes way behind that.

So what will do the trick? I think it is our need to formulate questions and search for answers! The true value of having a network of friends around you is you can leverage that network while searching for your needs. Search can be looked at in many ways:

1. The “What is the capital of the United States” question , use Google or any other search engine to do that
2. The “What is a good place to go to on holiday” question. There are two convenient ways of answering that question. First, exploration thought all the different holiday sites. Second, referral from people you trust, a friend providing you with he advice of a possible destination or site to look at.
3.  The “Can anyone explain to me what Newton’s Universal Law of Gravitation is about” question. Well, you could go to Wikipedia and read the information there, but a very good alternative is to see if anyone you know can explain it to you in words you can understand
4. The “What are you doing now”  question. This is always related to someone you know. Twitter like functionality or SMS will serve you right here.
5. The “I didn’t know I had that question”question. A surprise! Where did that come from? Not from search engines, more likely from a friend pointing something to your attention
6. The “I need an urgent answer now” question. Here a search engine might do the trick, but more likely an urgent call, SMS, or IM to a friend might work better.
7. The “I want to be entertained”question. Exploration, or simply sitting back and viewing what is happening to your friends or the world work best here. But honestly, t me, nothing will work better than to hang out in the physical world with people I like. No on-line experience can match that.

I could probably increase this list with more examples, but you catch my drift. There is a lot of discussion whether or not opening the social graphs of people will do the trick. Well, it will certainly help! The search for interaction is what will truly alter the way we think about social networks. Read my 10 wishes to improve web 2.0 and get a much better interaction if you want to know more about that.

The flaws in web 2.0 and how to correct them

While there is lot’s of enthusiasm and sometimes over hyped investors reactions to what now is commonly known as web 2.0, there is also serious warning that it is flawed. I have written some earlier posts on it (here, here). Rolf Skyberg wrote a very nice article in which he basically states that social networking platforms such as Facebook and MySpace are really crappy interaction platforms. A quote from Rolf: ““Social networks” are the crappy proto-versions of a coming integrated “online” communication system. The future is not in social networks, but in the type of communication they represent. Social networks are just one form of that communication.”

And this morning I saw an interesting article by Seth Porges, called “Will Human Laziness burst the web 2.0 bubble“. In this article he states that although initially everyone is enthusiastic about setting up profiles in social networking applications, this enthusiasm wears down due to laziness. In the end people will not put the effort into these platforms.

I agree with Seth up to a certain level. People are spending far more time on their profiles, than on what these networks should be about, communication. We all have experienced this laziness once the initial “coolness” factor wears down.

There is also an interesting sidestep to this. I was pointed to Andrew Keen by this article in Emerce (in Dutch). Andrew argues that “the Internet is killing our culture and assaulting our economy”. He basically objects to the enormous amount of anonymous additions to the content of the Internet (Wikipedia as an example). The sources are not verifiable and the crowd that fills Wikipedia, Digg and other sites is essentially very small.

But,I don’t think that is the only reason why web 2.0 is flawed. A much more important reason why most web 2.0 platforms will not be sustainable in the end is that they were essentially not build to provide true value to its users, but instead they were build to create en leverage the value of a large network! The larger the network, the more value it creates to the platform owner in terms of advertisement revenues and of course the possible take over by one of the larger companies which have too much money to spend anyway. Nothing wrong with that, but it doesn’t really help the user. Users are putting much more energy and creativity into the networks than they get out of it. Be honest, have you really gotten as much value from other (often unknown) “friends” on Facebook, Myspace etc than the amount of effort you have put into this?

So, what to do about it? Well, for starters, creating services that are truly centred around the user, instead of the network itself. Easy to say, very difficult to do.  I don’t really believe in the yet another social network start-up in all kinds of niches. The efforts of service creators and the user should be focused on interaction, communication, not on profile building. Your profile is your communication and interaction with others.

I believe that next generation services will provide the user easy ways to do just that. Be in touch with their friends whenever they want, in which way is convenient to them. With open interfaces to all services (check out this article on developments here). No walled gardens on social networks, which basically enforce the seeking value in the network, instead of providing value to its users. Communication with true friends should be private, interaction with larger groups may be public (but only if the user chooses too). Sharing emotions, stories, pictures, real-life events will remain the main driver of such platforms. But not necessarily public, more e-mail like (but better). Social networks are not the main issue, Social interaction should be. It is this social interaction that creates value for the user, and in the end will also create value for the service provider and advertiser!

What do you think, what will next generations services be like? Do you agree that the current services will not survive once the dust clears, or am I missing the point?

Opening up your Social Graph

John Battelle pointed me to an excellent post by David Recordon from SixApart. He talks about the possible privacy and security issues in sharing information on the Internet. He argues rightly that your Social Graph (your list of friends and connections) belongs to you, not to others. Read it and look at the examples he provides. It gives you a nice idea about the possibilities to start getting aback control of your privacy, without losing the opportunites to connect to your friends in social networks. Excellent work. If this really takes of it will have great implications on existing social networks, but even more, on the behavior of the users in those networks.