Archives: August 2007

Last night Nick Gonzalez covered SocialMedia’s launch of their ad network to anybody. The advertising market on Facebook is highly competitive and rapidly evolving. Last week I reported on Facebook’s intention to launch an ad network. I’m guessing that we will see that launch in the coming weeks and I have a feeling that SocialMedia will be one of the primary targets of competition. That’s one of the risks involved with launching on the platform.

If you position yourself to take on Facebook in any area, there’s a good chance that they are going to knock you out of the market sooner rather than later. That’s the one conflicts of interest involved with the Facebook platform. While I don’t currently have details on the Facebook ad network, entering the ad network on the platform is a major risk. Fortunately for a few of these ad networks, there are some serious investors that are taking the risk.

One of the other major challenges facing the various ad networks on the platform is finding media partners that are looking to advertise across the applications. The primary ads I have seen within these networks so far are all other Facebook applications. One thing is for sure though: SocialMedia is trying to position themselves at the leader of the pack in ad networks. It will be interesting to see how this pans out!

So I have been planning a video show for a few weeks now and I finally have the team in place to make it happen. We are going to begin making a once a week show that discusses everything related to Facebook, social networks and social news. I’d like to make the show interactive though. Each week I will ask the readers about their thoughts on a given topic and get some feedback. Unfortunately, for this week I have yet to pick a topic! Help me out and let me know what you think the first show should be about. Simply post your comment below and the best idea wins. Just to get your brain going here are a couple I’ve though about doing: poking social dynamics and Facebook in the workplace. Have any other ideas?

You launch your application and start refreshing your application page to see how many installs you have. This is the same thing that people frequently do with their blogs. They sit there and constantly check the statistics about their applications. Appsaholic and Appaholic (now Adonomics) were both created for this purpose. Users could check out the hourly updates of application subscription rates. It was addictive!

Now they have removed this feature. Facebook only updates their statistics on a daily basis now. While you can still track the popular developers and applications you can’t sit and refresh. That’s what makes many of these analytics sites entertaining is the ability to watch hits happen in real-time. I feel like a lot of that is gone now. Truthfully though, there is never much use in refreshing the page anyways. Are you disappointed by Facebook’s metric changes?

Two days ago I deconstructed Lee Lorenzen’s argument that Facebook is worth $100 billion without much thought. Yesteray, Lee posted his response on my blog. I don’t want to get into a mud slinging fight but I thought I would take the opportunity to post a rebuttal. Feel free to comment Lee!

Lee went through and expressed how Facebook is going to reach 200+ million users. This is one area where I totally agree with Lee. Not only do I think they will surpass 200 million users but I think they will hit 500 million users. That is not a typo. Not only will they surpass 500 million but I think they could go even higher. I won’t speculate about that though.

Next, Lee went on to justify his value of $500 per user on Facebook. Here are the five sources Lee came up with:

1. targetted brand advertising — their Yahoo play
2. keyword driven search advertising — their Google play
3. P2P e-commerce transactions — their eBay play
4. B2C e-commerce transactions — their Amazon play
5. Industry Alliance transactions — their Microsoft vs. Google play

Apparently Facebook is going to take Yahoo, Google, eBay, Amazon and Microsoft head on, with one hand tied behind their back. While I am one of the primary Facebook evangelists, it is hard to imagine Facebook generating $500 per user. Conversely, I know that Google has successfully done it. Lee states that, “Facebook’s multiple sources of revenue … are mostly tied to people staying within Facebook’s environment.” All the ads that I click on Facebook seem to direct me to other sites except for those ads being placed by the more than 7 other ad networks that have been launched on Facebook’s platform. Conversely, I can see this shifting in the coming months.

Honestly, I’m playing devil’s advocate here and I see a lot of what Lee is talking about. One thing I don’t agree with Lee on though is how Facebook has dramatically improved email. They need to improve their messaging system dramatically. I can’t browse through my unread messages currently. Also, the notion that they have “effectively killed SPAM” is a false one. I can guarantee that the volume of SPAM will increase on Facebook over the coming months and this will be one of Facebook’s primary challenges.

You know what? After trying to disprove Lee’s arguments, I have suddenly come to believe that Facebook may indeed be worth $100 billion soon enough. I said it! Facebook will be worth $100 billion. Facebook definitely has some serious issues that they are going to have to resolve though including the overload of application invites I’m receiving as well as their highly inefficient messaging system. Once they make those changes (and launch their killer feature) Facebook may just become the next $100 billion web company. I guess this wasn’t really a strong rebuttal was it?

Less than a week ago I discussed the prospect of a killer feature on Facebook that allows you to differentiate between various categories of your friends. Within days, Facebook added two new API methods to their platform: friends.getLists and friends.getListsMembers. Watch out LinkedIn, Facebook is gunning for you!

While these two new API calls are unreleased, I seriously doubt Facebook would add these to the development sandbox without being near completion. This could signal one of two things: Facebook is adding the killer feature or Facebook is adding a feature similar to Slide’s Top Friends application. If it’s the former, Facebook is certainly aiming to become the single resource for social networking on the web (as they should be). If the latter, this would be a direct strike against Slide, in turn creating a statement for developers: don’t develop a utility application that becomes enormously popular. If you do, Facebook will take it and add it to their main features.

One thing is for sure though: Facebook is rapidly expanding their site’s feature set on a regular basis. This is going to keep the users coming back as the company continues to support their position that their number one priority is the users. I’m excited to see what this new feature turns out to be!

[Via]

Are you an ex-MySpace user that is tired of logging into your MySpace to view your profile. Thanks to Jess Martin and Drew Chen you won’t have to do that again. The new SpaceLift application enables users to import their MySpace profile directly into the SpaceLift application. You can also click through each of your friends and view their profiles within Facebook.

My first time through I received an error. After emailing the developers of the application, I came back later and everything seemed to be working smoothly. My profile was successfully lifted even though my MySpace page currently has a template. The only thing that I think is lacking from this application is the ability to view your Facebook friends’ MySpace pages. Personally, I no longer use MySpace. The only purpose of using this application for me is to check up on the profiles of those friends which have yet to hop on the Facebook bandwagon.

While most of my friends have hopped on the Facebook bandwagon, there are a few that I am not in direct contact on a frequent basis and they have failed to convert. I’m sure they’ll move over soon enough! If you want to import your MySpace profile, go check out the MySpace SpaceLift application.

As promised, Facebook has updated their application directory with new statistical models for determining popular applications. They now display “Active Daily Users” when determining what applications are popular. This is a big change from before when all you saw was how many users were present. Are other applications such as Appsaholic going to be forced to modify their statistical models? I believe so.

Actually, after taking a look at Appsaholic, they have now officially been forced to recreate how they measure application statistics. Ouch! I also wonder what determines an active user. As usual, Facebook has not clearly stated what determines an active user so we’ll have to wait to find out. If anyone has found any documentation about it, please be sure to let me know.

This new model is definitely an effective model. While you can still roughly calculate the total number of users an application has, the number of daily active users has suddenly become much more important. Additionally, there is no perfect method for determining the exact number of users for an application. This is a pretty significant change to the platform. It will be interesting to see how this effects application acquisitions!

Update
Facebook has stated what all the touch points are for the applications. According to their documentation, the touch points are:

• Canvas Page Views
• Link Clicks in FBML
• Mock-Ajax Form Submission
• Click-to-Play Flash

If a user interacts with any of those items they will be counted as active for the day. These new metrics are much more effective at determining user interaction.

There has been significant buzz surrounding Google’s recent foray into the Facebook platform. Apparently they launched their application a couple of days ago and since the “launch” it has gone down. Rodney Rumford seems to believe that this application is probably a hoax. Pete Cashmore has stated that it is not.

I have know that Google was building Facebook applications for months now. This is nothing new but this will be their first one to launch. I also know of a number of potential Facebook competitors that are launching applications as well. Everyone involved in web technology is launching a Facebook application. Let’s be honest, it’s the word of the day (Facebook that is). In regards to the application, you can search the web, images, You Tube, blogs, books and maps. It looks like a pretty impressive application but I have yet to try it out. I will be sure to give more feedback once I have.

The application has now been down for over 24 hours and has no signs of coming back. While some seem to think that Google would make an official announcement about their application launch, I think that would be slightly ridiculous. Instead they are going to test the Facebook waters and not comment on the issue. While there is no official word that this is real, I have to believe that it is simply because I know that Google is working on Facebook applications. It is a little suspicious though that there is no about page. Let me know if you get the app to work.

There is a lot of buzz surrounding the value of Facebook. Currently they are growing like gangbusters but there are no signs of similar growth rates in their advertising revenue. One thing that is interesting though is the rapid growth in users from the older demographic. The rapid growth in this area is a phenomenon not previously experienced by other social networks. The wide range of demographics allows for developers to create applications that cater to each of those demographics.

Advertisers also want a piece of the action and that is where all the revenue will come from. Lee Lorenzen likes to project Facebook’s valuation at $100 billion but most would suggest this is due to his stake in Facebook. He developed the Altura Ventures investment fund for investing in Facebook applications. Lee argues that Facebook is worth $100 billion based on their future entry into the people search business.

Even if people search accounts for over 30% of the search online, I’m not quite sure that this values them at $100 billion. Google’s market capitalization is around $150 billion. They have far more capital invested in expanding their reach then Facebook currently does. Obviously I think Facebook is a phenomenal platform but I think at their current size, talks of $100 billion are slightly ridiculous. How much do you think Facebook is worth?

Facebook is making some significant changes to their existing platform. There are updates coming which will “shift the balance more in favor of good apps.” While they haven’t directly specified the meaning of “good apps,” they have suggested a shift in focus with the application directory to focus more on user engagement. While there are little specifics (as usual), this will change the face of the blossoming Facebook economy.

Over the past few weeks I have spoken with a number of people who are now running their own teams that are pushing out Facebook applications. Any significant change to the measurement of successful applications could potentially have a serious backlash. Applications such as Food Fight or Vampires are going to be rewarded less since there is less user interaction within each of those apps.

Another significant change with this update is Facebook’s decision to disable “the ability to display profile content that the user isn’t aware of.” This is a huge change! For all those “daily quote” applications, they are going to require a user to click for a new quote rather than automatically updating the profile. This sounds like each time a user is about to have any application added to their profile, they are going to need to approve the content that is displayed. This is significant!

There is another feature being added that I think is quite useful for developers. Currently, each application typically has an invite box that enables users to choose which friends they invite to the application. Facebook is in the process of launching a standardized UI that each application can use making “it easier for users to understand exactly what they are doing.” One upside of this changes is that Facebook has suggested that they may “increase the maximum number of requests that can be sent out by a user.” This will be a positive result from this new change.

One thing that is sure to receive backlash from the spamming applications is Facebook’s decision to remove email functionality from the API. The aim of this change is to stop “deceptive and misleading notifications.” Ultimately, this is a positive change for users, but a definite hurdle for those that were intending to turn their apps into an email list. As I typically suggest to others, applications will need to have an email subscription box.

Finally, the viral aspect of applications is being improved slightly. Facebook has decided to enable feed stories for users that haven’t added the application. Facebook will “also begin to optimize these stories into higher rotation amongst the other application add stories.” Honestly, this is something that many users were complaining about. That was actually one of the final discussions in my NPR interview yesterday. While the news feed wasn’t the primary source of contention for users, it definitely was one focus. Ultimately, Facebook is going to be forced to allow users to disable application notifications or at least limit them. I for one, have way to many application invites on my homepage and would like to be able to control it.

One thing is for sure: Facebook is striving to make the platform experience better for users and better for developers that are building robust applications rather than one hit wonders. Some of the newly created development companies are going to be forced to rethink their strategy.