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Facebook’s Like Button – What’s Not To Like?

facebook like button

In 2010, Facebook introduced their famous Like button.  Since that time, it’s found its way across the web.  Back in 2011, celebrating the one year anniversary of the Like button, HubSpot published statistics on its use to that point outlining “2.5 million websites have integrated with Facebook (including more than 80 of comScore’s U.S. Top 100 websites and over half of comScore’s Global Top 100 websites)”. Fast forward to 2012 and the time of it’s S-1 filing, Yahoo! reported that Facebook was generating 2.7 billion likes and comments a day…31,250 every second!  And that is only half the story, less than half.  Even if 10% of Like button impressions were clicked (which is a stratospheric number), that means the “Like” button is still collecting data on the other 90% of traffic.  Very rough math:  27 billions data collecting events from not only on Facebook but across the most popular sites on the web.  ClickZ has a good article of the gold mine that is Facebook’s Like button and cite:

the company creates an impression log every time a signed in member views a Like button or social plug-in on a third party site, regardless of whether or not they interact with it. That record, which is tied to members’ unique user IDs, includes information on IP address, URL, date, time, and browser, and is retained for a period of 90 days.

This is an amazing accomplishment.  Many in the industry including investors already know the power that this represents.  Facebook has an engine that is learning with every page view about users and for certain, is synthesizing it into a data warehouse that marketers can only dream about.  The possible use cases for such an engine are profound ranging from more astute targeting on Facebook with advertising and offers, to building an internet wide advertising platform (aka Beacon) that is every bit as powerful (if not more so) to Google Ad Sense.

Think about it from the perspective of a publisher on an online web site, for example, the New York Times or WSJ.  They strive to learn about their audience and their behaviors so that they have generate more online revenue.  However, they have an issue:  their users have to register and be logged in so they can tie the profile of their user to their activity.  Many publishers sit on a ton of anonymous cookie data that they cannot identify at a personalized level.  This is why online behavioral targeting and ad exchange solutions are vital to them.  In the case of the Like button, users have already registered at Facebook (you have to register to use the service) and thus an ID is in their system tied to an actual person.  Each time the Like button is sent somewhere on the internet, Facebook knows who is looking at that page.  A click on the Like button is just additional data.  So in this scenario, Facebook most likely knows more about the users behavior than the publisher themselves.

Plenty more to discuss on this topic.  If you are interested, the lastest edition of MIT Technology Review has an article entitled What Facebook Knows as its centerpiece.

 

 

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Merging of Worlds, Look Out!

As most know at this point, Facebook has acquired Friendfeed. There seem to be 50 plus posts on the topic on Techmeme. Mixed reviews at best on this one. From my reads, most seem more negative slanting. Scoble is excited but thinks this is end for Friendfeed as we know it. I would agree (with the this being the end part), Facebook clearly has no interest in running a separate brand and best we can hope for is to have full open data streaming into the Facebook platform. Louis Gray is watching and comments in a funny “girls in high school” parody. Steve Rubel has an interesting take that this is the next step towards true lifestreaming.

Quick take on first glance:

  1. Can’t blame the Friendfeed team.  They built a great product and an exit to Facebook makes good shareholder return sense.  The fact the price tag was $50M really shows how bad the economy has taken a toll on liquidity.  I would think based on recent history, Friendfeed would have gone a higher price tag even sans revenue.
  2. Can’t blame the Facebook team.  As Scoble mentioned, Friendfeed was a lead innovator in the social stream space and Facebook was “borrowing” many of the innovations coming from them.  They are acquiring a great team that knows how to execute that should only continue to help them build their continually improving platform.

Personally, even while it may make sense for both teams, I can’t help to be a bit negative on this one when I probe into it a bit more.  Some of my concerns can be remedied with time, some not.

  1. I would have liked to see Friendfeed to continue to evolve with more runway, they were doing some great stuff even if their penetration was only into the real early adopters.  It would be neat to see if they could cross the chasm just as Twitter did.  But perhaps they understood that it was too complicated for the mainstream.  This one we’ll never know, the writing is on the wall that Friendfeed will be absorbed fully.
  2. I am concerned regarding innovation and also the number of players.  Louis Gray made a great point when he expressed a concern that there could be four major players, Google, Facebook, Apple and Microsoft.  We need more independent companies doing stuff in the space.  Time will play out here.
  3. Friendfeed never developed into a business model (perhaps this is why selling makes sense).  I always thought that their platform while fantastic for consumers had a great revenue opportunity for the enterprise, there is big revenue in the B2B collaborationa and communication space.  No one has won there yet and current market toosl do not satisfy the need fully.
  4. I need more than one stream in my lifestream.  As Rubel comments, lifestreaming is upon us with this acquisition.  Here I am not so sure.  I need more than one “sub-stream” in my lifestream in Facebook.  Fred Wilson removed everyone and made Facebook his private lifestream for exactly this reason.  For him, Facebook is personal and Twitter is everyone.  For me, I am going through the same conflict.  I have personal and some business people (that I actually know) in Facebook.  This creates a gray area between Facebook and LinkedIn.  I don’t know (in person) many of the people I interact with on Friendfeed; I don’t want them becoming “friends” yet on Facebook.  Already, I don’t like the fact that former business colleagues can see on Facebook what my former high school friends are posting in my news feed if I comment on it.  This whole area is an issue and is ripe for innovation.
  5. Facebook permissioning.  I know many of you are going to jump on point #4 above and say “Lou, Facebook has good privacy controls and you just need to manage the groups”.  Okay, maybe so but it isn’t clear to me on how to do this.  Is there a manual?  If you need one, there’s the first problem. It needs to be easy and straight-forward, right now it is not.   If I haven’t figured this out yet how can I expect my mom to creating multiple lifestream groups in the Facebook system.  One “newsfeed” to rull them all does not work.  Facebook may be the one to crack the code here in lifestreaming but it is beyond what they are doing now and is beyond what Friendfeed was doing too.  There needs to be innovation around easy management of the “different faces of one’s life”.  I will write another post fully on this.  But suffice it to say, the Friendfeed integration could get messy for many.  Time will tell.

So, time will tell on where this heads.  Not only for the integration of Friendfeed and Facebook functionality and follower lists, but also in the entire lifestream space in general.  Time will tell on where this puts Twitter and how quickly they potentially move to Google as Kara Swisher outlined yesterday.  Look out, lots going on and much more to be on the look out for.

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Analogy of Status Updates

It’s been some time since I took the SATs but I always enjoyed the “analogy” section of the test.  Okay, as much as a standardized test can be enjoyable, it is up there with using a freshly-sharpened #2 pencil to fill in those little ovals.  If you don’t remember, here’s an example:

DALMATIAN : DOG ::

(A) oriole : bird

(B) horse : pony

(C) shark : great white

(D) ant : insect

(E) stock : savings

It seems with growing frequency, I’m pulled into conversations regarding Twitter with many who are just now learning about it.  Great Time article on Twitter by the way.  Yes, I get the often “I just don’t get Twitter.”  I used to think that too when I first heard about the service.  I quickly no longer thought that.  But, recently, I get “Why use Twitter when you can just update your status on Facebook?”  And this throws me right back into the 90’s:  “Do you use the internet?” “Oh yes, I use AOL all the time.”  So back to my SAT analogy:

web : AOL :: Twitter status : Facebook status

Remember the walled garden of AOL, how many users would think that was the web, never venturing out into the wild world of the wide web.  Times change but I see history repeating itself.  The struggle and growing awareness of open and closed systems.  There is a tremendous amount of value being generated off the openness of Twitter than is available within Facebook, where your status network can only be as big who you are willing to have in your personal friends’ list.  The same goes for status in LinkedIn and who you are willing to have in your professional connections’ list.  The situation is certainly more complex than AOL of the 90s but strikingly similar.

Welcome to the Land of Irrationality

My morning today started with a cup of coffee and seeing Robert Scoble’s tweet and related post regarding the rumors flying around Microsoft/Yahoo and possibly Microsoft/Facebook, started via John Furrier’s post.  And I found myself in sheer disbelief.  Not because I do not think Microsoft isn’t being intelligent about its online strategy.  Not because of what a great product Facebook has built.  But simply because it is placing yet another face on the irrational valuations being thrown around, $20 BILLION! for Facebook.

Sorry, I love Facebook but this simply strikes me at late nineties irrational valuations but an new stratospheric levels.  Of course this is a rumor and very inline with the 1% valuation Microsoft has already placed on the company but buying 1% and buying the whole enchalada at that valuation are two completely different things.  And I’m sure Microsoft has a team of folks a lot smarter than me doing IRRs, synergy analysis and long-term value analysis on what Microsoft can do from a revenue perspective overall with a great site like Facebook in its arsenal (not to mention it from a defensive maneuver against its core business).

To me, this is the Alex Rodriguez signing brought to the Internet.  The Rangers signed him, 10 years $275M.  The Yankees just parlayed that into 10 years, $325M.  Rodriquez, great player (Facebook).  Yankees, great franchise (Microsoft).  But completely off-the-grid and irrational.  Keeping the sports metaphor going and trying to put such an aquisition in perspective:  Microsoft could buy the TOP 18 NFL Franchises for the price of Facebook and those franchises have a cumulative revenue stream of $3.88B! (according to Forbes).

Think about it from that perspective.  The top 18 storied franchises in football with the likes of the Cowboys, Giants, Bears, Patriots, Redskins, Jets, Packers and Steelers to just name a few.

I see such an acquisition and such a valuation as crazy.  Bad for the web overall (for another post).  Potentially bad for Facebook and its users (again, another post).  And for that, I do not (or at least hope I do not) see this happening.  Sara Lacy doesn’t see it happening for different reasons.

UPDATE:  More conversation and interesting points on this topic at TechCrunch.

. Social Fatigue .

At first I thought it was just me. Then I asked a couple of colleagues at Dow Jones and several echoed my sentiment. I believe I am experiencing what I was calling ‘social fatigue’. I simply reached a point of personal saturation for social software. How many social applications can one user use at one time? I’m sure Jeremiah Owyang is developing a Forrester study on the topic. And today, I came across the article ‘Facebook fatigue’ kicks in as people tire of social networks in The Register. ‘Facebook fatigue?’, so it isn’t just me.

Facebook continues to impress me as it is still sets the standard as the complete social platform. The news feed is a great feature. And the power of the platform itself, often the topic of discussion and a place where numerous developers have already built into its frameworks. And the group functionality (sometimes) and events calendars have also proven helpful. However, for me, it simply isn’t scoring enough on utility. I only find myself using it once a week, not once an hour. The passing-along karma, the beers with wings, the happy hour invites, the groups for “everything under the sun” has me thinking about the topic of ‘social spam’. And even the amazing pace at which I can consume Scrabulous games has simply starting caused me social software fatigue.

And more social software enters the picture like Tumblr and Seesmic. Each with their unique take and value proposition, a multi-content type micro-blogging service and video email/conversation respectively. It will be interesting to see how each develops traction with their user base. And there are many others which is really incredible. So as these new ventures enter the picture, I ask: Is and should consolidation in this space begin? Will we see the functionality of these ventures merge quicker in the social networking space at the same rapid pace that we saw the new offerings launch at the speed of Web 2.0. Has this consolidation already begun like WordPress launching Prologue earlier this week?

Time will tell. But if I am experience fatigue and I immerse myself in the web everyday, social fatigue must be real. So alas, I find myself back to finding the highest level of utility in LinkedIn, still in my opinion the unheralded social networking site for business use, and Twitter, the social component I had initially questioned its utility but now use throughout the day.

Opinions? Thoughts? Social Energy? Social Fatigue? Yes? No?

[Update 2/1/08:  Jeremiah Owyang commented that he is not currently doing a study on the topic of social fatigue but that it is a trend to watch.]