A small discussion yesterday on Friendfeed after I posted a video that puts up a big warning about the way Facebook deals with your privacy. I do not know if any of the claims in that video are correct. Jason Kaneshiro pointed me to an article posted earlier that mentions some of the same assumptions here.
Privacy and Social media. An interesting contradiction. Social Media allows us to interact over any content on the web. It’s pubic by nature, people are stimulated to join an open conversation, become public figures. Social media does sometimes provide us “private” back channels (the direct message in Twitter). It is an unstoppable process. Any website, channel or technology is making the move towards the usage of social media. We love to be part of any conversation and by doing that we increase the value of any service for the service provider and ourselves.
And it feels good too. I don’t care a bit about the aggregation capabilities of Friendfeed for example. But I like the ability to join in a conversation about that content that gets aggregated. Same thing goes for Twitter. Tweets essentially broadcast something to anyone that wants to listen, and every once in a while, it leads to responses that make you smile, laugh out loud, sad, surprised. All emotions are addressed in a way.
I think it is a great that social media allow all of these interactions to take place. It makes the online world a more fun and interesting place to hang out. But it gets messy when the objective of the one providing the social media capabilities isn’t to let us interact. It gets messy when the objective is to store and analyze our interactions and relations on the web in order to make money. It gets messy when a privacy policy of the service provider is 10 pages lawyer talk that no one bothers to read. It gets messy when users are naive enough to think that this isn’t happening at the service they use. That is the point where privacy all of a sudden becomes important in social media.
The sad thing about this is that Social Media and privacy are holding each other in a death grip. But privacy is slowly choking and turning blue. Social Media can’t really exist unless it facilitates public interaction. But underneath lies the trouble. I can’t think of a single web company that isn’t using the free ad based business model to exploit social media. And it is this business model that really fights the battle with privacy. And unfortunately it is winning, big time.
The generation that grew up without social media still has a grasp of what privacy means on the web. The generation that lives with social media now is already losing sight on the concept. And that i a real threat in my opinion. Privacy control is as important as controlling your own finances. It is not something to think lightly about. That doesn’t mean that there should not be any public interaction through social media! But it’s crucial that the participants can decide for themselves which aspects of their online lives an interactions are accessible and reusable by others, and which aren’t.
The only way Social Media and privacy could co-exist, because that’s what is needed, is to make the user himself responsible for his privacy control. These controls can’t be implemented within the social media. They need to be implemented within the on-line presence of the user!
To explain this consider the following (its’s from that Friendfeed discussion I mentioned earlier). Facebook allows you to set all kinds of privacy controls. Within Facebook you can decide what your friends can and can;t see, and up to a certain level you get to control 3rd party access to your profile. But there is one control missing. It is the ” Facebook, stay away from my profile” control. Facebook helps you to protect yoursef from anyone except Facebook.
Privacy is something the user needs to be in charge of. Who are you to think that you can do this for me? To implement this one could think of a highly localized version. Every user has his own privacy controls on his computer. But a much better solution would be to use the banking model. Create large privacy faults on the web where users can store their interactions and controls. Interacting using social media then simply passes by the controls we have within those vaults. Some will provide full access, some will put constraints on them. And the banker that provides this privacy service only has one business model, that is to protect the user’s privacy. And just like with banking, we want to have choice, privacy banks that compete to provide us the best, simple, easy to use, cheap, customer-centric service possible. A service that can connect with all social media and allows instant, fin-grain controls accessible to the user.
A simple idea, but almost impossible to implement due to the mainstream free ad based business model. Do we really need privacy controls in Social Media? You bet. We haven’t seen the last of this. As more Beacon-like services appear, feeding upon our personal data I think that privacy will wrestle back. Privacy will become a powerful counter force to the public addiction of this free ad based business model and get balance back into this death grip.
Yesterday I spent the evening watching the Dutch soccer team play against Italy in the European Cup 2008 tournament. It was a great game for us. Holland beat Italy with 3-0 and that is a great score against the current world champion. I thought about it this morning and I realized that a sport event of this magnitude can have such impact on social behavior. I haven’t seen the official figures yet but I’m betting that more than 75% of the entire population in Holland watched that game (including baby’s and very old people). In Italy the same thing most likely. They watched it at home, with friends, at work with colleagues or at a local pub on a big screen. You don’t want to watch a soccer match on your own, there is no fun in it. You need to watch it with as many as possible.
What is even more interesting is that the clear winner of this media battle is a very old-fashioned, traditional channel. It’s TV of course. TV is by far the most social media channel known to man. Some of you social media junkies reading this might think “Is this guy an idiot?”. Well, maybe, but just think about it for a second. TV is an incredibly powerful social media channel. Not because it is interactive (it isn’t). Not because you can discuss the thing you are watching with a gazillion others in real-time (you can’t). Not because every user has a unique profile you can look up and engage with (not possible). Not because it is a 2-way medium (no way). TV is old-fashioned broadcasting. You don’t get to choose, it just serves you the images some TV director decides to show. But you can’t say it isn’t a social medium. Not after millions of people watched that game. It’s just that the social behavior isn’t taking place on the media channel, it takes place because of the media channel. The soccer match brought us all a reason to get together. It isn’t the match or the outcome, it’s that the match gave us a reason to get together and socialize.
I can’t think of a more powerful social media channel than the TV broadcasting a major event. TSure, there are millions of people on MySpace, Facebook. Even more that watch video’s on YouTube or comment on weblogs. But a major TV event can bring hundreds of millions of people to a screen the size of some 30 inches or so. In most cases it’s the major sports events, the Olympic games, some major athletic event, soccer, American football, whatever. And these people engage with the screen. They scream, cheer, curse, cry, hug, and probably show every emotion possible during a match.
It is something the web just isn’t capable of capturing. No matter what social network or service is launched. You just can’t get hundred of millions of people showing that much interaction or emotions together. You just can’t socialise like that in virtual space. Why? I don’t think it is the content or the services on the web.
I think that the real reason for it is that the technology we use to access the web, our social networks, our interaction services are A-social. That is, they do not allow us to use it in a social way. It is impossible to surf the web with two people at the same time sitting behind a computer. You can’t interact on a mobile with more than one person holding it. You can’t socialise on a social network while five of your friends are trying to join in while in the same room. The technology is aimed at a single person using it. That same technology doesn’t allow us to user more than 1 or two senses at the same time. It sucks you in, and shuts off your ability to interact with the environment you are in. Just try it out. Get a room full of people, sit behind you laptop, try to engage in some interaction on the web, and at the same time have a meaningful conversation with your friends. It just doesn’t work. Web technology may have brought us the ability to interact using any social media. But it also makes us all lone rangers, sitting behind our computer screens, desperately trying to interact digitally while the rest of the world has meaningful interactions in the physical world. The keyboard or mobile phone as input device. It just doens’t make us social. It makes us very isolated.
Social interaction on the web is a very poor surrogate for the real thing. That isn’t a bad thing necessarily. Social Interaction on the web brings us fun and pleasure too. But engaging in social interaction in the physical world, enjoying the conversations, being surrounded by real people, being able to feel and display the emotions sort of makes the a bit stale doesn’t it?
That is what social media should be about. It isn’t about the technical capabilities, about the 20 ways we can interact digitally with content or people. It is about stimulating social interaction in the both the digital AND physical world. Get your users to interact with their physical world through the content or service you provide digitally. Forget the traffic, the page views, the downloads. Get people to interact with each other over the stuff you provide them. That is what gets people excited. That is what makes hundred of millions of users sit in front of a screen and share their emotions. Maybe the good old TV isn’t that bad after all.
If anything web 2.0 technology has provided us the capabilities to have a continuous 24×7 public conversation on the web. There are blogs, communication services like Twitter, content services like YouTube, search services to help us find the things we need, profile services like Facebook or any other social network, and now aggregation and “noise” filtering services like Friendfeed and The Filter. Social media, or the ability to interact over any kind of media, provides the participants a never ending conversation space. It’s addictive, there is so much being produced, being shared, being launched, talked about that it forces our Internet backbone down on it’s knees and slowly into cardiac arrest. And we haven’t seen the end of it yet. There is an incredible sized population in Africa and Asia that isn’t on the web yet, but they will at some point.
I was thinking about this last night after I had written a post in which I argued that social media is timely. There isn’t a need to be participating 24×7 because there will always be something that’s important when you join in. I see this enormous conversation as a river of information passing by and me taking a plunge whenever I feel like it.
But the early adopters feel there is a real problem with this non-stop social media conversation . It’s the noise problem (Try a search on “noise” here for example). How can we find the things that are really important from that huge pile of information floating around. That is partially why we have aggregation and filtering services. Each of them, using one algorithm or another, tries to compile a tiny subset of the universe and present that to its users. The question that remains is whether or not the right tiny space is presented.
What all these technologies essentially do for us is remove all kinds of physical boundaries like time, distance and space. These constraints prevented us in the physical world to meet 1 Mln people at a time, getting to know people from any place in the world, have anyone that wants to, no matter where or when they are, listen to the things we say. Web technology removed those boundaries, essentially turning this digital world into a giant market square where we can meet.
While I’m writing this, Scott O’Raw just published a post which ties in really good with this one. In his post Scott talks about this very same conversation and worries about people like Robert Scoble trying to become a talkshow host. Robert is very often at the center of conversations (well in the tech world anyway), and that helps him deal with the massive amounts of information. It also makes the brand Scobleizer more sticky. Scott agitates against these shock and awl tactics just for the sake of getting attention. The article is well worth a read, so go over there and give it a shot.
And while all of these conversations seem rather attractive right now I wonder what will happen when not 10 Mln or a100 mln users but 1 Bln users are participating. Or 3 Bln. The entire population in this planet. Everything connected into one uber-social graph. Everyone talking to everyone on the largest virtual market square know to man. The entire digital universe becoming a social media heaven.
I believe we might just get lost in this universe. The conversation simply becomes too large for anyone to even remotely grasp its complexity. Right now we are all creating our own public appearance, getting enough Google or any other kind of juice so that we can actually be found and listened to. Just take a look at a relative small conversation Robert Scoble started just now over on Friendfeed. Imagine not 100-200 people talking and not really listening, but instead 1Mln or 5 Mln doing that. The conversation would lose it’s importance immediately. If the entire planet is out there, connected, wouldn’t that make us all anonymous again? I think so. I believe that once people have had a few experiences with the excitement of being part of this public conversation, they will settle down again. Humans aren’t capable of dealing with such complexity, and computer algorithms, filtering tactics, friend referrals, don’t really reduce the complexity, it just flattens out the conversation until we all hear the same things.
There are two reasons why I suspect that this global social media conversation will be less important in a next evolution of the web. The first reason is that in order to reduce complexity people will eventually fall back on smaller, more personal, more localized communities. The conversations taking place in such communities will be more immersed within the actual physical world the users live in. That doesn’t imply there won’t be a public conversation. I’m suggesting the smaller communities will prove to be much more valuable than large scale ones.
The second reason is that the most important access device that will be used for the web in the coming years is by its nature a very personal device. It’s your mobile phone, quickly turning into a hand held web browser with communication features. One of the characteristics of this device is that it tends to suck you in, leaving you unaware of your surroundings (probably why so many car accidents happen while people are using a mobile phone while driving). It effectively shuts down a few of our senses such as hearing and seeing (except for a tunnel vision). While the monitors on our computers will become larger, TV screen like, the mobile device will remain small and will draw all attention to it’s screen. As a result of this sucking in and the device’s graphical capabilities it is my believe that we simply can’t deal with the complexity of a conversation on a scale of millions. Instead, we will be using that device more effectively with those that we know, friends that we care about and trust. In other words, in much smaller communities. And with that descaling the noise problem will be reduced to a much smaller proportion.
We don’t really need noise filters, the sheer complexity of the social media conversation will resolve itself because we won’t find enough value to continue to participate in such immense structures. We will end up scaling down in smaller but more valuable communities. You can try it out today already. Just stop following people for the sake of it or the numbers. Try to select carefully and notice how the noise level drops to a point where quality and personal interactions take over the enormously crowded marketplace we are all visiting today
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.
Being able to pass relevant information from one person to another has always been part of the evolution of mankind. When there was no technology we used storytelling. People would listen to the oldest, wisest, craziest people in their community to hear about the past or the future. Families used storytelling to teach children their heritage. Slowly drawings were added to this information passing, possibly starting with the earlies cave drawings. Where storytelling was used for 1 to 1 or 1 to a few connections, the ability to draw lead to more persistent information passing. From symbols we went to pictures and written language. Storytelling remained as an important way of sharing information but we added letters and manuscripts to it. Manuscripts were copied by writing them down again. Each manuscript was unique in its own.
With the introduction of printing technology things changed rapidly. Now books could be copied much quicker and at much lower costs. Again, the storytelling remained, but books and newspapers made the information passing process faster and simpler. The technology developments that lead to the telephone lead to the possibility to share information real-time without the need of being at the same location. Much later, the mobile version was created, allowing communication without a fixed position. These different technologies allowed 1 on 1/few/many information passing.
Computer technology gave us the ability to communicate electronically via chat and e-mail. And with the introduction of Internet technology, the possibility to make information accessible to anyone on the net became a reality. The first version of the Internet was a static library of information. Web pages were added and the most important problem to solve was how to find the right information. Information became clustered in web portals, and finding information using search was invented. The cost of information creation/storage dropped to nearly zero and left us with infinite amounts of information, creating the problem of finding the right information.
Web 2.0 provided us technology to tackle this. Partially by clustering people and information into communities. It also gave us user generated content. Instead of companies or professionals, everyone could now create information, video, audio, pictures, and share it with the whole world. the Internet changed from a static library of information into a dynamic world of opportunities. Everyone can now become a storyteller by simply starting a weblog. The subscription to a magazine or newspaper has now been replaced by RSS subscriptions to weblogs. And to structure this world full of dynamic information we need new ways of finding the relevant stuff.
Search engines work to a certain extend but cannot deal with our urge to have instant access to something created right now. the information flow needs to be real-time. The response of web companies is to provide near real-time tools for information flow. With services like Twitter, Jaiku, Pownce, we get real-time many to many conversations. And for our convenience of finding the right information we now have content aggregators that find all relevant content for us. Often specialized for a specific content type and using a computer algorithm (e.g. TechMeme provides us with the latest in Tech news using a special algorithm). Facebook providing us near real-time access to what our friends are doing. Or Friendfeed, a content aggregator that lets people do the content aggregation. By subscribing to people we know, find interesting or trust, Friendfeed provides you with the content those people like.
But the problem of finding the right information is of all times. Just look back into history (not just my short, inaccurate, and incomplete summary ) and we can see that finding the right stuff is a problem of all times. We now have nearly unlimited computer power and storage capabilities, but that leads to nearly unlimited (and often unclassified) amounts of information too.
So the question becomes, what is next? I can’t look any better into the future than you can, but I have a tendency to look at the past and try to see if human nature can provide us with clues for the future. I believe that we haven’t seen the end of content aggregation or search engine algorithms yet. Simply because the web business model drives us there.
All that content aggregation really does is reposition, reclassify or reorganize content that is already out there on the web. Whether it is done by a computer algorithm in the case of TechMeme, or done by people, in the case of Friendfeed. But you can easily spot a few problems with aggregation. First of all, if content aggregation tries to be complete, all it does is try an attempt to get all the content out there back into one place. The more content it aggregates the more difficult it becomes to find the interesting stuff from the pile. The signal to noise ratio drops to the level of the entire web. We quickly need search algorithms and noise filters to get to the good stuff.
If content is aggregated using people, then we get a “democratic” version of the web. It filters out the stuff that the community likes best, leaving the more obscure or less liked stuff behind us. But I’m no so sure that the stuff that comes up this way is always the best stuff. If anything, democracy principles to select information, also leads to predictable and similar content. There isn’t room for obscurity or weird stuff. The people that are in such communities will end up selecting only part of what is out there, governed by themselves and the social community they are part of.
Web 2.0 technology and business models are aiming at the masses, large communities with millions of members, enormous content aggregators with uncountable amounts of content. But I believe that a large part of the Internet population will end up getting lost in this new digital universe. It is like the Star Trek computer that Captain Picard can talk to. It has all the information, but what if we simply don’t know the right question to ask?
Content aggregation is the new thing now. But the problem we should be solving isn’t the many to many flow of information. It is the one to a few, or few to a few that needs to be tackled. I doubt I’ll ever need to know about all the content that is out there. It is just a small part of it that I’m interested in. Content aggregation, no matter what form is used only leads to more content leading to noise, filtering and search. Social networks allowing us to connect to the entire world leave us with too many connections and too much information. It leads to more than we can handle. It leads to so much information, tagged and targeted, that the information itself becomes less valuable.
And when people get lost, they will simply return to their human nature. They will look out for the oldest, wisest, or craziest people out there. I don’t think the world needs more information. We don’t need any more or better content aggregation, search algorithms or noise filters. We need more inspiration. We need storytellers (and that will be the topic of another post).
What do you think? Where do you get your inspiration from? Are there any storytellers out there we should know 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:
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.
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.
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.
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.
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.
Erick Schonfeld has a funny article today on TechCrunch in which he predicts/hopes that web 3.0 is about removing the noise. We all recognize the problem he describes. He is in so many different networks with so many followers that he can’t keep up with the messages that pass by. It made Robert Scoble stop automatically follow other people on Twitter (he has 20.000 followers and 1 tweet per second by now).
The cry out of Erick made me laugh a bit. Let’s face it. It’s a Tech Elite’s problem. Yes, I consider myself part of that, and probably most of the readers of this blog post too ;-). If anything the current web 2.0 trend is fragmentation. There are thousands of social networking sites out there, each fighting a battle to get users. There are a whole lot of services that let you interact, publish, follow or be followed. There are aggregating sites that aggregate it all for you. There are aggregators that aggregate all the content from the sites that already aggregate content for you. And if that wasn’t enough we now need to take it away from the browser and move each of these services into tiny little desktop applications. I can already predict the next wave in desktop application development. Someone is bound to get the idea to integrate Twhirl and all those other desktop applications into one big aggregator on the desktop. A Netvibes or iGoogle, but right there on the desktop instead of on a portal. And after that, who knows
Tech people, including myself, seem to be running away with all these different capabilities. Every time TechCrunch “breaks the news” for yet another web 2.0 service or desktop application people jump on it. Within minutes I see Twitter conversations that talk about the new application. People run around providing the developers with suggestions on how to improve the service. It’s called user feedback I believe. The problem with it is that the “user” in this case is a tech person. Which is fine if that is the target audience. But if you want to become big, if you want to be the next Google or Facebook, then you will have to remember that any non-tech consumer out there will not have the same desires as us techies do. How many people do you know outside your tech community that want to have 25 desktop applications live, running Firefox alongside with 10 tabs open, twittering 100 times a day, reading and commenting articles on Friendfeed, writing a blog post about it, starting riots to get traffic going, AND still have a normal day job and a life after that? I don’t know anyone that fancies that kind of life. It is the life of the tech hero. We need to be out there, be there first. We are all affraid of not being there when it happens.
The cure for it? Not web 3.0, I certainly hope not. The receipe is quite simple (isn’t it always), but the execution much harder. Let go. Let me repeat that. Just let it go. I see Twitter, Friendfeed, and all these other sites as rivers of information, anekdotes, posts, friends. I tap in whenever I feel like it, join the conversation. But I leave when I need to get back to real life. I know the river won’t dry out. There will always be a next scoop, another funy remark, a great blog post. Life doens’t stop simply because I choose not to be drwoning myself into this cyber river of information. I don’t need 20.000 followers, nor do I want to follow 20.000.
If anything, web 3.0 should be about the user, about user value, about letting the Internet evolve around you, instead of around some destination site or walled garden. Web 3.0 should set us free, letting the important things come to us, instead of us having to go to the important things. It’s about freedom of data. And yes, noise reduction or filtering will be nice. But that isn’t really what web 3.0 should be about. Until it is here I’ll be dreaming of a user centric web.
Glenn Derene suggests that Social Networks might replace search giant Google as a place where people will start their search. He bases this on a conversation he has had with a VC. A quote from his post:
So what is my VC friend talking about? The larger the Web grows, the more important search becomes, right? That’s probably so, and as a note of clarification, he changed his statement slightly to say, “Search, as we know it, is dead.” What he means is that, with the rise of social networking sites such as Facebook, MySpace, Twitter, Second Life, LinkedIn and even Google’s own Orkut, the next generation of Web users may find what they want by using their social network rather than a search algorithm. After all, the people in your online social network should know you better than a mathematical equation, right?
I have written about this idea before too. Google and other search engines index an incredible amount of information, but it it often up to the experience of the search engine user to get a good result. If I ask the right question Google delivers quicker than anything else. If I ask the wrong question I’m forced to scroll though millions of search results to find what I need.
There are different possibilities to tackle that problem. We could replace the Google bot indexing by human indexing, like Mahaloo does. Humans can interpret information better than computers, but the downside is off course that they can process much less information too. We can create large encyclopedias on-line which are updated by anyone (Wikipedia), or by experts in the field (KNOL). We could analyze surfing behavior, social interaction and social graphs of people and use that information to provide the user with more targeted information (which for now is used more often in advertisement). This is where the VC friend is pointing too. If Facebook, or any other social networking site knows more about you, and your friends it might be able to do a better job at search. While I can agree with that up to a certain point (I’ll get to that), the article takes a false turn in my opinion. Glenn provies he following example:
But what may turn out to be the strongest signal of all is the footprint you make with your online identity. Consider how much information you voluntarily provide on your Facebook profile. Now imagine if you could combine that with your Netflix renting and Amazon buying habits. Then throw in the suggestions of your friends and the pages you visit the most often. All those various sources of information about you are currently stored in different locations—on your computer’s browser history, on your Facebook page, on the servers for Netflix and Amazon—but just imagine how accurate a search could be if every time you had a query, the mass of data about you that exists on the Internet could inform the results. (Google and Yahoo already do this to a limited extent by tracking your search history to refine results, and surely startups will try.)
This is the Walhalla of search, the pot of gold at the end of the rainbow. A Social Network owners wet dream. But it’s just too good to be true. I don’t buy it. I’m not saying that knowing things about a person might help a service provider provide more targeted results, but I don’t know of a single example where this has been implemented successfully. Every social network site is hogging data to accomplish just this. Whether it is to target ads or to provide the user with search capabilities. But it is likely to fail at least as often as it will succeed. Google provides me in 80-90% of the time with the answer I’m looking for. If a search engine that knows about my profile fails half of the time, I wouldn’t bother using it.
Why would such an attempt fail half of the times (or something in that order)? Because it doesn’t take human behavior into account. There are at least two barriers that can hardly be overcome by any computer algorithm or data hog system. First of all, on-line I’m not who I really am off-line. On-line people can have multiple identities, lie about themselves, provide us with profiles that look better than real life. I wrote about that earlier in an article called “The Future of advertisement lies outside of Social Networks“. I wrote:
I’m hiding behind thousands of friends, only showing you the public me, a persiflage of real life. You might think that this universal social network will provide you better information than demography does now. Yes, I am 39 years old, married to a lovely wife, I have four kids and I live in the Netherlands. But that really is just a small, public part of me.
Here I am
Secondly, a computer algorithm can hardly interpret my mood of the day. Depending on how I feel, what I have experienced earlier, what I’m about to do in the future, the coffee I had for breakfast, etc, etc, I might be looking for different things when I type “I am looking for a car” in the search bar. Chances are that by taking into account my profile information, social graph, interactions on Facebook or any other social network, the “social search” algorithm will be way off.
Depending on the question you need answered, people will start using different search algorithms. If you want to know the phone number or address of a doctor you rarely visit, you will use Google. If you want to buy a new espresso machine, chances are that you will read all kinds of reviews on the Internet (which always contradict each other and are often biased) but will end up in a store tasting the espresso right there (nothing beats that experience). But if you need answers to complex questions, then the best way to go is to ask your family, friends, colleagues, Twitter followers. You will get the best answers there. Finding information is great, interacting about it is even better. No search engine or social search algorithm can beat that.
Social search algorithms will definitely have their place in search the coming years. But I doubt they’ll perform much better than Google does right now. Adding social information into a search query might work really well, but not always. And when it’s off, it’s likely to be way off.
So Facebook allows its users to import content into their newsfeeds now? Competing with aggregators like Friendfeed? Big deal. The service is already loaded with features that provide no value, so adding a new one isn’t going to make it any better. Let me provide you with five reasons I personally don’t like Facebook very much (hey, it’s just my opinion).
Facebook is a large walled garden that allows users in but never, ever let’s them out.
Even after deletion fo an account your data is still within the Facebook databases. Moving to another service with your data is impossible. Getting your data out leads to account deletion (not data deletion, that remains with Facebook). I don’t like customer lock-in, I want customer freedom.
Facebook is based upon a flawed business model.
They use the free but ad-based business model which is fine when you are a giant search company, but really sucks when your main objective should be allowing your users to interact. There is no place for ads in interaction. It’s merely trespassing in conversations between friends. Facebook newsfeeds are highly overrated.
They might have been the first to implement them, but the newsfeed sucks. I recently took a picture of my own newsfeed and it has learned me that one of my friends is playing Scrabble, three people added an application, someone had changed his profile picture (which was sort of obvious as I could already see that it had changed), and some advertisement for large Facebook groups I should be in. I’m not interested to read ‘Alexander went to movie X”. I’m interested in personal message like “Hey, I went to movie X last night. Had a great time, you should go see it too”. The first message was an Orwellian Facebook Big Brother is watching you headline. The second one was a personal message from a friend. Pick the one you like best.
Facebook is spam.
Can’t say it any clearer. While a lot of Facebook’s intentions (and those that create Facebook applications), might be to provide the user a good time, it is spammy as hell. I get a lot of requests to look at things my friends send me, only to find out I need to forward it to other friends too. Often even before I get to see the content. I don’t want to harass my friends with that. Which reminds me that I need to talk to the person sending me that stuff too
Facebook is about data hogging, not about user value
Facebook isn’t there to provide its users with value. It is there to collect all the data it can get out of you, your social graph, your actions inside and outside the walled garden. It needs to do this in order to fuel it’s business model (that is why the business model is wrong). Facebook shouldn’t be hogging data, they should be providing user value. Instead of customer lock-in, they should be thinking about customer freedom. Instead of importing feeds from other sites, they should be opening up themselves to third parties. Instead of locking me down they should allow me to leave if I want to and taking my friends and data wherever I want to go. But they don’t, and you already know why.
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.
In my previous post I spoke about the presentation Charlene Li gave about the future of Social Networks. I ended up analyzing what it would mean for advertisement. But the thought of everything being connected into one big social network, or social graph, remained in the back of my thoughts. I asked myself if this “everything gets connected” thing is something a user wants or something an advertiser needs. And then this morning I realized what has been bugging me about this. It’s the scale of it.
Imagine the scale of a social network (which may easily be overlaying several different services) that interlinks the entire Internet population. Imagine the scale of the social graph that comes along with it. Try to imagine the enormous amounts of interactions that will take place in such a network. Add the number of user actions to that equation. And then try to think about the data that is being stored and analyzed by those that want to get to us commercially.
The scale of such a network would be almost unthinkably large. It is like discovering the nearest galaxy with the largest possible telescope, only to realize that there are many new ones behind that.
In my opinion the scale of such a network would create a number of problems. Lets get rid of the technical issues first. We aren’t very good at designing and implementing scalable solutions so there are bound to be technical issues with such a large scale solution. I’ll park that one aside, but will get back to it in a short while.
On the service provider side there will be a competition issue. If we are talking global scale here, not just physical, but also in terms of population, then most service providers may just as well stop trying to become the next hit. There is really only one company even remotely capable of running such an incredible infrastructure and that would be Google. Not just because they have incredible expertise on handling large amounts of data. Not just because their whole identity is based on handling the unthinkable amount of data (hence the name Google). Not just because they dare think and act this large which is thoroughly embedded in their identity. Not just because they are already acting in every possible relevant market ranging from search, social network, e-mail, office apps, location, maps, and mobile. Besides all of that, think about the way Google has been thinking about infrastructure. They own data warehouses all around the world, they invest in fiber, they are by far the largest global infrastructure owner worldwide. There probably isn’t much data traveling around that doesn’t pass over the Google infrastructure. I don’t see anyone else thinking about infrastructure on a scale that Google does?
While this has benefited the general Internet population enormously and set free incredible innovations, it will become a hurdle that will provide us with a lot of trouble. Google will own the single biggest walled garden, spanning the entire Internet. And that can’t be good. Even the enormous scale that both MySpace and Facebook are operating upon shrink to tiny size when comparing that to the infrastructure Google holds and will further develop. If one company will own that much infrastructure and data traveling around it, there will be hardly any competition possible.
Who can take on such a giant? Who can compete against the sheer power of owning almost the entire Internet. Who can scale to such a level that they can even remotely compete on numbers? Already Google has taken more than 75% of the search market. Now people dare think they can move up to 90%. If that is the case, then effectively there will be no more competition out there. And that will be the death of innovation.
On the advertisers side, having one large social graph and all the data to analyze this might sound like the Marketeers wet dream. People would be profiled in unprecedented ways. Any cross-section can be made. You could target any thinkable set of characteristics you want. But there is one thing you can’t target. It’s called human behavior. People might show certain patterns on-line, show certain behavior that profiles them in some way. Might have friends that seem similar through some set of characteristics. But human nature isn’t all about patterns. There is always the wild card of the unexpected. Just because you mightbe able to map me in some chart, doesn’t mean your commercial message will hit me between the eyes. You might know a lot about me, but unless you will provide me with value I won’t be listening to you.
What would happen to the user in such a global scale network. With the transaction cost of finding and interacting with people around the world dropping to zero we will probably all have enormous amounts of on-line friends in our social graph. There would not be a single thing unnoticed on-line. Every step we take is being watched by a Big Brother. We can scream out our message to the entire world only to find out that no one is listening anymore. We could have millions of friends, only to realize we really don’t know any of them anymore. By joining the network consisting of the entire population we will have reached something we thought we got rid of, anonymity. There will still be the influential, and no-influential. The haves and have nots.
At the same time we will find that it is almost impossible to have a life without this network. Most of the needs we have will be supported in this on-line network. Most of our identity has moved on-line. We probably can do anything on-line. Besides some basic stuff we really need to do in the physical world (eat, drink), most of our dealings that are needed to make a living, run our finances, obtain services are moving on-line. Here comes the danger of reliability I talked about earlier. What if we have a universal identity on-line that we use for all our on-line activities. From social interaction to professional services. What if, due to some technical malfunctioning, our on-line profile wouldn’t be available? We wouldn’t be able to participate or interact in this global network. We wouldn’t exist, even if it was for only a short while. A scary thought really.
Is this really what we want when we talk about the need for openness, for data portability, for lowering the walled gardens? The consequence of it might be that one of them takes it all. I sure do not want one single company to have that much power and control over the biggest influence of the lives of coming generations.
But there is always hope. It’s called human nature. If we can learn one thing from history it is that when things go up, they will come down again too (simple matter of gravity I suppose). There isn’t a single empire build in history that was strong enough to last for ever. If the trend is that the entire population will be connected in one super social graph, then there are bound to be people that refuse to join such a future. They will find ways to travel around this network without being seen by the owner of that network. They will find ways to communicate and interact without Big Brother watching them. They won’t feel the need to be always connected. They don’t want to be mapped, to be labeled, to follow a specific predicted pattern. They don’t want to be part of something, but instead be a unique individual. And they will be perfectly happy knowing that at one point people will want only one thing, freedom.
What do you think? Will a scenario like the one above be likely to happen? Or am I overestimating the strength Google has (or underestimating the power of possible competitors)? Will Google hit an Innovators dilemma at one point and overtaken by something new? I’m interested to hear what you think of the possible consequences of a global network that connects us all.
Just a small update. Charlene Li has written her own post about the presentation she has given. Definitely worth a read. You can find it over here.
I read a report on a talk Charlene Li gave on the future of social networks. In this presentation she goes through a number of interesting things. A copy of her presentation can be found here.Charlene talks about user profiles, social graphs, identity, social activities and social influence. In essence each of these topics boil down to the same overall theme. Currently, our on-line social activities are scattered around many different services. As a result we have multiple identities, sets of friends, walled gardens between services. She predicts there is a need for a universal identity (one profile across all services), a single social graph (my friends are available through all services) and relevant context across all services when a user performs an action (if I buy a book at Amazons I want to read the reviews of my own friends). She ends her presentation with the idea that social influence might be the most important marketing value in the future.
Read her presentation if you want to get into the details. Charlene knows what she is talking about, so it is good reading.
It got me thinking a bit about this future. To understand the future, we sometimes need to understand the past or present. I assume Charlene is making these predictions based upon the current social networking practice and uses examples such as the platform and social graph wars being fought in different walled garden services like Facebook and other social networks.
When we look at current behaviour there are a number of interesting things to note. Lets look at our on-line friends and interactions first. Charlene uses a fractal like image to describe her current social graph and goes on by saying that half of her social life isn’t even included in that graph. So our relationships are complex.
But I would argue that they are also thin as air. I can have conversations with people around the world I have never seen or will ever meet in real life. It takes zero effort to communicate with these “friends”. But I don’t need to maintain these relationships. I do not need to invest in them. They are virtual, provided to me because it is so easy to get into contact on-line. The cost of having interaction with many on-line friends has dropped to zero. These relationships sometimes provide me fun, interesting information, great conversations. But often they simply are there, untouched, or hardly interactive. The social graph of human beings might have exploded because of the lowered transaction cost to build and maintain it. But I would argue that the value of that social graph is also highly volatile.
I can emerge myself into a social graph with literally thousands of friends, only to hide my real self behind this mass of people. I can be anonymous, an alter ego, a persiflage of myself because it really doesn’t matter either way. There is hardly any investment into such on-line relationships, nor is it expected. I’ll get to the implications of that in a minute.
Here I am
Second, despite of the possibility to have thousands of on-line friends, multiple identities, different services, human behaviour isn’t really equiped at handling all this diversity. In most cases we tend to favour a few roles and identities as well as friends. I currently have one hundred or so followers on Twitter (which is a small number compared to other users), and I follow each of them back. But I do not interact with every one of them. Instead I tend to favour a few, based upon earlier interactions, shared interests, or plain old fun. Think about this for a moment. What do you do when you join a new social service? You immediately look up, or try to import the friends you had on a previous social network right? We might have thousands of on-line relations, but only a few of them really matter to us. We can’t handle the complexity and volatility of too many on-line friends. It is great to have thousands of unknown, far away, on-line friends, but in the end we only invest more effort in a few of them. Nothing wrong with that, as this networking generation has no expectations regarding on-line friendship. Interacting without really getting to know each other is an accepted way of communicating with each other.
What about the future of social networks? I think Charlene is right in predicting that there will be some kind of “standardization” or integration of multiple user identities into some universal identity. The same will happen with social graphs. They are bound to be tied together at some point, creating one big, complex, social graph for each of us.
But the question to me is whether this will happen because the user wants it, or because the advertiser needs it. Just think about that for a second. I’m sure people like Mark Zuckerberg have. They see the social graph as the new marketing pot of gold.
Having access to the most influential beings in any social network. Where influence determines marketing value. Where all relevant personal profile and social graph data is centralised and available for commercial exploitation. It is a marketeers wet dream isn’t it?
ButI said it before, all marketeers are idiots. I have serious doubts that they will understand me in this new ubiquitous social network. They won’t really understand my profile, my interactions. They will have a false illusion that by centralising things, cooking it all into a giant soup bowl, they will get a better grip on their customers. Locking them in, providing them with relevant commercial messages based upon the ingredients of this soup.
But there are at least 2 relevant issues with that assumption.
First of all, you won’t find the real me there. I’m hiding behind thousands of friends, only showing you the public me, a persiflage of real life. You might think that this universal social network will provide you better information than demography does now. Yes, I am 39 years old, married to a lovely wife, I have four kids and I live in the Netherlands. But that really is just a small, public part of me.
As a marketeer, you might even have the illusion that the most influential people in such a network are your target audience. The social networks will battle to get these influential people on board of their network as Charlene puts it. But I doubt it will do marketeers, or users for that matter, that much good.
Second, social networks are primarily there for us to interact with other people. That is the real power of a social network. It isn’t about a social graph, which is a static representation of the connections between people. It is my day to day interactions within that social graph that makes it valuable. And, as I have stated before, advertisement has no value within these interactions. Marketeers are merely trespassers in our on-line conversations.
Does that mean there isn’t any hope for marketeers in this future of social networking? Sure there is. But not within the social network itself or within the interactions that take place in that network. Mark Zuckerberg is right to think that having access to my profile, my interactions, and my social graph is valuable. But the value of having that data lies outside of Facebook or any other social network for that matter. 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. Facebook won’t become the next generation advertisement machine. Facebook and it’s data will merely complement the already successful commercial targeting process that companies like Google and Amazon execute so well.
The future of Social Advertisment lies outside of social networks.
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.
Sometimes when you look at a specific situation or problem it helps to think opposite. When you think opposite or try to do things entirely against existing rules it helps you to understand the system or to find new ways of dealing with it.
I was thinking about that last night while going to bed. I entered this half dreamy state right before you fall asleep and my thoughts were uncontrollably unleashed. A stream of thoughts appeared, related to activities on the web. I remember thinking about Facebook, MySpace, YouTube, all the major websites that drive traffic all the time. I linked it to current on-line advertisement models and thought about how everyone is locked into this advertisement trap (all of this sounds like a conscious stream of thought, but it wasn’t really ;-)). The portal, the network, the traffic, all of that is important for advertisement revenues. But this catch 22 leads to lock-in of the user instead of freedom. It leads to data hogging, instead of setting your data free. It leads to non-portability instead of the user travelling free around the web globe.
And then it came to me, what if we would turn it all around. What if we would think opposite? I fell asleep with this feeling that was a great thought, although now I’m awake again it is difficult to get that positive feeling back again. But I decided to think it through a little to see where it would take us.
What if customer lock-in was changed to customer freedom? Instead of portals and (social networking) sites trying to lock you in (for advertisement revenues) they would set you free. Customer lock-in is a term thought up by marketeers. It helps them get a grip on their work, but
a bit stale doesn’t it?
