Facebook Aspires to Be Society's Social Operating System

By Thought Leaders Archives

Facebook is literally MySpace's baby brother, launching three months after the #1 social network, in February 2004. But it wasn't until September 2007 that the platform became accessible to folks outside of the .edu domain. First ten corporations, including Accenture, Apple Inc., Intel, PepsiCo, and Microsoft, were invited to build networks within. Then - BAM - anyone who had a valid e-mail address. At that point there were eight million regulars in the Facebook community. Nine months later, there are 23 million. And it continues to grow by 100,000 registered users a day.

Originally published June 6, 2007

Facebook's Shift Symbolizes Major Change in Web Dynamics

Facebook is literally MySpace's baby brother, launching three months after the #1 social network, in February 2004. But it wasn't until September 2007 that the platform became accessible to folks outside of the .edu domain. First ten corporations, including Accenture, Apple Inc., Intel, PepsiCo, and Microsoft, were invited to build networks within. Then - BAM - anyone who had a valid e-mail address. At that point there were eight million regulars in the Facebook community. Nine months later, there are 23 million. And it continues to grow by 100,000 registered users a day.

So, if it ain't broke why fix it? If you've been offered a reported $1 billion by Yahoo! for your company, why risk a fickle public and a fast-cooling venture capital community? Friendster, anyone?

The answer to WHY Facebook launched F8, its revolutionary Facebook Platform, is both evidence for Facebook's position that they are uninterested in being acquired and are in it for the long haul, as well as a concrete allusion to their mission statement: "Facebook is a social utility that connects people with friends and others who work, study and live around them." They aspire to be no less than our Social Operating System.

While MySpace was growing its wide-ranging community by leaps and bounds, fostering creative chaos, allowing perfect strangers, including creators and consumers, to "friend one another," Facebook was and continues to be based on real-world networks.

And while MySpace continues to be plagued by issues of verification (and consequent hysteria over sexual offenders) Facebook has taken pains to create a seamless connection between one's school or place of business and users online identities by authenticating relationships. So while advertisers have enjoyed the massive reach of 100 million MySpacers, they were aching for Facebook and they didn't even know it. Now the sixth most trafficked Web site, Facebook offers this enviable mashup: a qualified lead that's spread by word-of-mouth.

As Facebook has evolved from a directory of the various Houses at Harvard (the elite school's refusal to publish a single-use "Facebook," unlike other universities, led then-sophomore now-CEO Mark Zuckerberg to create the "social graph," and the decision to open up the community to the outside world was inevitable. But the manner in which Facebook decided to do so this last month has marked a paradigm shift, not merely for developers and advertisers, but for the Web itself.

Simply put, the Facebook Platform is a business opportunity. Developers (working on behalf of brands) have access to a toolkit that allows them to not only build an application that seamlessly conforms to Facebook's standards, but to immediately introduce their widget into the Facebook community via "canvas pages." Either you can search all applications (there are now 300 since launch) or, if you find that someone in your network has an app you like, you simply click on it and add it to your profile. It couldn't be easier. With this move, Facebook has shown that the acquisition model is no longer an endgame. Rather, in a manner similar to how BBC opened up its data via Backstage [April 17] and Twitter [May 23] has grown by encouraging its users to innovate, Facebook's new platform will allow it to leverage its size on behalf of startups and new brands.

ILike is a music recommendation service that has a vast library of profiles of artists from both major labels and unsigned artists, offers the ability to add songs to your profile, and delivers information on upcoming concerts. ILike president Hadi Partovi saw a demo late winter and he was smitten: "In the history of computing, there was the personal computer, there was Windows, there was the web, and now the Facebook platform." Pass the Kool-Aid? Not so fast. His application was added by 10,000 users within the first ten hours of the service being live. It reached 40,000 in the first few days of platform launch, and is now adding 200,000 registers a day. ILike soon issued pleas to the Bay Area community for servers merely to keep up with user demands. We should all have such problems.

Less hyperbolic in growth, but still bullish is long-term partner PicksPal, the fantasy sports betting Web site started by Tom Jessiman that's now known as the Home of Genius Picks (at last count PicksPal's "geniuses" were accurate 62.5 percent of the time). Jessiman thought that PicksPal and Facebook were a match made in heaven from Day One and was an early advertiser. Over a two-year period the two companies began working on projects, including a widget Jessiman designed for March Madness that took one's picks for a bracket and published them to users' profiles. Jessiman terms the Facebook release nothing less than "a company changing event." He's a convert to the Social Graph and believes in the future of hyper-marketing (high-volume, low margin). Says Jessiman, "It's not like an ad buy where you reach 4,000 eyeballs/day if you spend X dollars. When you install my app, you go into your profile and your Mini-Feed (Facebook's internal RSS) and all of your fifteen friends can grab the widget and then show their friends. You install it with one click! Our stats have gone up 50 percent every day since we started it. If we went the traditional marketing route [and they have, they've advertised on Friendster and MySpace] it'd be the same number of eyeballs when we ended as when we began."

If there's any risk associated with the policies behind the launch of F8 it's that Facebook isn't taking a cut. At all. The revenue opportunities are all there for developers. They can advertise and decide to charge (or not) for their widgets on their landing pages (the "canvas pages") or not, and Facebook allows them to "keep" the real estate they create. Facebook is making a calculation that they're going to grow like topsy (analysts like eMarketer's Debra Aho Williamson estimate $100 million in revenues; others speculate that Facebook could quadruple their profits by year end) and become that much more valuable to advertisers. So much for "foregoing" profits.

 

Is Facebook the Next Google?

Facebook Aspires to Be Society's Social Operating System

Facebook's new platform opening the site to all-comers might be new to the marketplace, but Marc Canter, late of Macromedia, has been touting its basic ideas for some time. The CEO of Broadband Mechanics came up with the concept of Digital Lifestyle Aggregators (or DLAs) some time ago and has since remarked that Facebook is the first Web property to embody its ideas. [07/12/06]

Comparisons of Facebook to MySpace have become instantly passé. Instead, industry-watchers are asking if Facebook is the next Google. If you're involved in building a consumer-facing Web site, the Facebook model is so powerful you might instead consider applying your energies to a Facebook app. It offers developers building blocks, faster access to a rich source of data and capabilities otherwise unavailable, brand exposure opportunities, deep integration throughout Facebook, and revenue opportunities that make Facebook the hot web-property of the moment.

The 'widget' marketplace has received $250 million in investor funding over the last 18 months, drawing attention to the contrasting widget policies of Facebook and. MySpace. Whereas Facebook invited dozens of developers to play on its platform, MySpace limited all its widgets to Flash, and consequently has a track record of banning developers including Revver, vidiLife, Stickam, Imeem, and Photobucket (first banning the latter, then buying them late last month, perhaps as a miscued reaction to Facebook's dominance in photosharing).

But is Facebook's newly launched platform F8 a MySpace killer? There is consensus that the Rupert Murdoch property must act. If one has a fixed advertising budget and has to choose between the two platforms, it's a no-brainer as things stand. Naturally, PicksPal founder Tom Jessiman is given to a sports analogy: "It's MySpace's time to hold serve."

Facebook advertisers like PicksPal, Twitter, and iLike find they can develop a richer, more evolved relationship with the community. Jessiman, for example, rather than building pages or aggregating a community, can stick to what PicksPal is best at: building a game kernel.

Regarding the Photobucket banning, wrote a poster on Gigaom: "MySpace is totally chump for pulling this kind of crap. Friends shouldn't let friends lock themselves into closed networks." Indeed. Canter holds that "The new lock-in is no lock-in. The giant chess game surrounding white-labeled social networks has shifted to a new level. Now all platforms have to be open. Now all platforms have to let their end-users control their own data and content." And he doesn't stop there. Canter maintains that "DLAs are the solution for convergence, a way to bring together all the aspects of one's digital lifestyle into one comprehensive, distributed open platform made up of multiple vendor's products and services."

How have Facebook members actually reacted to this new Open Door Policy? Very favorably. Facebookers continue to be able to browse clean, usable profiles within their networks (particularly compared to MySpace's interface) and they will have access to virtually limitless tools, beginning with a roster of eighty-five applications on launch, which will in turn increase retention time on Facebook. (There are now 300 applications at press.) But more than a few have crowed that Facebook is then going the way of MySpace: open to spam, visual noise, and people who aren't what they seem. Facebook can address this partially, at least at the outset. It continues to have what chief revenue officer Mike Murphy calls "spectacular privacy controls" and settings that the individual user can control, reassuring its community that they can block both spam and imposters.

And advertisers? In addition to the greater reliability of Facebook vs. MySpace members, the Platform allows for unmatched deep integration on the Social Graph. ILike is proof positive of a level-playing field. iLike's widget was built to support their music recommendation service inside Facebook. It had no publicity but took off like a rocket. Its audience within Facebook is now larger than its core audience on iLike.com. Its success is less about the user experience than the hunger for a music tool and easy access to it.

As Facebook goes forward, apart from managing growth, interesting questions arise. First and foremost, spam, spam, spam. Facebook's been inoculated, as compared to MySpace, because it was velvet-roped. No longer. Secondly, will Facebook's sixty engineers continue to work in parallel with the hundreds of third-party developers that will be creating widgets for Facebook, or will they begin to act as curators? Just how level is the level-playing field? There are now 47,000 networks on Facebook, including the IRS, CIA, the New York Times, and yes, MySpace. There are three basic applications: official (such as PicksPal); unofficial (a fan created a Last.fm widget); and a sponsored app (Red Bull offers a virtual game of rock, paper, scissors). What happens when CBS, the new corporate owner of Last.fm, decides to launch an official Last.fm widget in Facebook and the unofficial Last.fm widget built by Joe Public comes up against the official widget? The Facebook community has embraced the unofficial widget by downloading/adopting it en masse. Will the two co-exist, battling it out for community respect, or will the official brand and its new owner demand a cease and desist? If Facebook founder and CEO Mark Zuckerberg's vision for collaboration and openness holds, the answer is a foregone conclusion. The two battle it out. While this policy is commendable, when the law of unintended consequences kicks in it's anyone's guess.

 

How Advertisers Can Leverage Facebook's New F8 Platform

Facebook's Mike Murphy Offers Advice to Marketers on The Facebook Economy

Over the last two weeks we have reviewed Facebook's F8 platform and how it changes the ecosystem not only of social networks but of the Web itself. In an exclusive interview, Mike Murphy, Facebook vice president of media sales, offered advice on how advertisers can best leverage Facebook's new F8 platform.

First, the backstory: The genesis for F8 was the success of Facebook's first two applications. Recalls Murphy, "First we did a photo app that soon became bigger than Flickr. Then we created one for events, and it overtook Evite. We knew we were onto something." Noting that a widget could take off like a rocket was crucial, but it was the decision to open up Facebook to developers that was paramount. Giving up control has been everybody's Web 2.0 mantra, but in one fell swoop Facebook made it a core business principle.

In the three weeks since F8's launch, the platform has posted some impressive stats that demand a second look, even for the hype-averse. At last week's Facebook Developers Meetup in NYC, Dave Morin, Facebook's director of platform, reported the following benchmarks:

  • One-third of Facebook's 25 million members have downloaded at least one widget.
  • Launching with sixty-five partners and eighty-five applications, to date the F8 platform has received requests from 40,000 developers to be a part of the project.
  • There are now over 1,000 apps.
  • Facebook's most popular apps went from 0 to 850,000 downloads in just three days. (Its threshold for tracking an app is reached when 1,000 users have downloaded it.)

The host of this event, Amit Gupta, spoke of imminent "app fatigue," but before that time arrives, Murphy suggested opportunities for Jack Myers Media Business Report readers. Murphy, formerly Yahoo!'s VP of Media Sales Western Region, confirmed that Facebook expects to hit 50 million members end-year and 100 million by mid-2008. He pointed out that since opening up registration beyond college students last fall, Facebook's fastest growing demo has been adults 25 to 54 and the reach is global.

Part One of this three-part series observed that "fan-based" widgets [such as the Last.fm app created by a user] might come to loggerheads with "official apps" created by brands (such as the official CBS-owned Last.fm site). Will Facebook take a stand in support of a paid advertiser or preserve its open and level-playing field? Murphy offered that "with any affiliate model it's up to the official brand to build the best. That marketer should win the race. After all, they own the assets! For those who are looking to stand out, my team builds promo platforms for them to create distribution." Apps that have been popular right out of the gate - that is before they are even entered in the directory - have availed themselves of the viral tools that Facebook offers, including invites and Newsfeed postings.

Murphy underlines Facebook's most significant advantage for marketers: Unlike MySpace, which is a proof of the strength of weak ties, "our users are really who they say they are. And we can help you target them with a message." Despite the launch of F8, privacy controls continue to restrict uninvited access.

Nuts & Bolts
With the staggering influx of applications what can aspiring developers do to streamline the development process?

  1. Absorb everything offered within http://developers.facebook.com/.
  2. For those who have want more documentation than Facebook offers, there is now a Wiki: wiki.developers.facebook.com.
  3. Last week, Facebook API update was added as an RSS feed. It has been surprisingly transparent. For example, it recently noted that new code and updates are generally released Tuesdays at midnight. This RSS feed will provides developers with a way to track their application during the approval process.

With literally thousands of apps in queue, will Facebook's in-house developers make arbitrary value judgments? Murphy claims "we do not have nor will we ever have an editorial voice." Facebook engineers are reviewing apps purely for functionality, but interested developers can turn for unofficial reviews to the new www.Facereviews.com, headed by Rodney Rumford, which launched last week.

To contact Mike Murphy write to Mike@Facebook.com.

 

This three-part series was originally published on June 6, June 13, and June 19, 2007.

 

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