Teens are bored with Facebook, but Mr Zuckerburg needn't be worried

According to this article on Business Insider, teens are losing interest in Facebook and they're seeking a more private, intimate place to share with close friends. (Let's face it if your Dad's on Facebook, it can't be cool!)

Instead they are becoming obsessed by Instagram and Snapchat. Fortunately for Facebook, Mr Zuckerberg personally negotiated the purchase Instagram for sweet $2bn in April 2012 (see TheNextWeb article on the acquisition story).

Instagram and Facebook mess up on digital ownership

Two days ago, I mentioned Facebook's desmise in my post about Digital Lockers and Personal Digital Identity, most probably due to its clumsy / haphazard approach to users' privacy.

And lo, barely had I hit submit, when Instagram (owned by Facebook) changed its T&Cs to grant Instagram licensing rights to sell all photographs taken by the application. (From the Register: Don't use Instagram, it'll sell YOUR photos)

The reactionary vitriol from its user base demanded that Instagram did an about turn within 24 hours:

Instagram users own their content and Instagram does not claim any ownership rights over your photos. Nothing about this has changed. We respect that there are creative artists and hobbyists alike that pour their heart into creating beautiful photos, and we respect that your photos are your photos. Period.

Blog post by Kevin Systrom co-founder, Instagram

Sigh - what a horrible embarrassment. Will Facebook ever learn???

P2P Social Networks versus Group Management Software

I've been in social software for 9 years – almost before the term was started. I enjoy contributing to the alumni network for Judge Business School at Cambridge University. Naturally, we have our own online network, called the 'Common Room'.

We've run into a problem – recent graduates ie those that did their MBA in 2004/5 onwards are glued to Facebook in order to interact with others – to the detriment of any other social software.

This article intends to explain why the Common Room (and other Group Management software) will continue to remain much more useful and relevant than Facebook.

Group Management at the core of the network

There are two ways to manage a network:

• At the edge: means that each individual manages their connections and the level of information that they share by themselves. 
• At the centre: means that management is done centrally, by an appointed person(s) of the organisation.

Solutions between these two extreme have to make compromises between these two models which introduces technical and user complexity, ultimately confusing the end user which make participation harder.

Facebook Groups falls between these stools.

Facebook is good / bad at ….

Facebook is great – brilliant for connecting for individuals to connect with others – sharing ongoing updates, as well having the one place to house your profile information. It's perfect for students to join up together online (err, that was what is was invented for, right?!?).

Btw, many people outside the US don't realise that a ‘Facebook’ on American university campuses was the ubiquitous book that was handed out to all first year students so that they could quickly get to know each other. It was a book of faces and names possibly with some other information eg home town, birthday, interests, sports. Of course, the first thing that everyone does is flip through it looking for hot guys / girls – I did it myself at my American high school in New England.

Unfortunately, the elegant P2P social network model breaks down when it crosses from being a network of peers to being a group with a common interest. Certainly a group with a common interest can be set up on P2P networks. It fails because every individual has to join that group. Given that setting up the group is free and pretty painless, then lots of similar groups proliferate.

Remember Metcalf's Law? The value of a network is proportional to the square of the number of users of the system. The value of a large network is disproportionately more value than lots of little, ill-formed networks.

For the Alumni of Cambridge Judge Business School, there are Facebook groups for each year, country, location… except that it is inconsistent: many countries are missing, locations are based on the passion of the group leader and the naming convention is (inevitably) inconsistent.

Entrance to the community is done via invitation or more practically by request. The group manager has to undertake the verification of membership. Do they have the time to do that? I doubt it.

What happens when the group leader leaves / resigns / becomes too busy? Unfortunately, there’s no way for someone else to take over the management of the group.

Facebook and Privacy

Facebook have really, REALLY struggled with the issue of privacy. The user generated content is incredibly engaging, but what attracts new users is the mass of information on their friends – the more is disclosed, the more engaging that content becomes. Squirrelling information away is fundamentally destructive to Facebook.

Facebook blundered around the privacy issue. Facebook Beacon was an early version of Facebook Connect which enable certain activities on partner sites to publish activity on third party site to the user's News Feed. The colossal error of judgement was that it was default opt-in, rather than default opt-out. Worse, at launch, there was no opt-out.

Step forward Group Management functionality (again)

I was involved in Social Software before the term existed (it was community software back in the late 90s) so it is good to see its relevance today.

Group Management requires the appointment of someone to act a gatekeeper and referee (if required) to the community. This is required when everyone doesn’t know everyone, but would like to connect across a large network.

The Gatekeeper is nominated by the community to control entrance and exit. Once the community trusts the gatekeeper to do a good job then then the community is likely to be much more virulent and healthy because each member has been vetted and is likely to more trustworthy.

The Gatekeeper acts as a referee. It represents the (independent) court of appeal for any behaviour that is deemed to be detrimental to the community (eg spam or over communication) or a disagreement within the community.

Conclusion

Facebook has its uses, but not really in professional membership organisations. Bring on Group Management functionality please!

Facebook open sources data centre design

Facebook's has committed to open source its data centre design. This will surely threaten Google competitive advantage.

Firstly, this is what Facebook did:

Facebook then took the revolutionary step of releasing the designs for most of the hardware in the datacenter under the Creative Commons license. They released everything from the power supply and battery backup systems to the rack hardware, motherboards, chassis, battery cabinets, and even their electrical and mechanical construction specifications.

(from O’Reilly’s Jesse Robbins' blog post)

The result: Facebook’s shiny, new, custom-built datacentre in Prineville, Oregon, USA uses 38% less energy to do the same work as Facebook's existing facilities, while costing 24% less.

Side note: Dunno quite why Prineville was chosen. Cost of electricity is a massive factor, which is why Google and other choose locations near hydro power plants, but this is not the case in Prineville. See article at OregonLive.com.

Facebook can do this because its competitive weapon is entrenched and massive user base which is unlikely to wander off anywhere soon. Facebook is sticky, 'coz all your friends are there too.

Why should Google be concerned? Well, Google isn’t a one trick pony, but search is very, very, VERY important to it and user can more easily churn to another search engine than users of Facebook.

Search needs muscle - and operational muscle is one of Google's secret sauces - see my next post on Google's Secret Sauce.

Facebook's valuation and what do Harvard student use now?

A Daily Telegraph article, Will Facebook conquer the world?, uses the Goldman Sachs investment to discuss the future of Facebook.

Side note for history: Goldman Sachs invested $450 million (£288 million) in Facebook over the New Year period, taking the valuation of the site to $50 billion (£32 billion). The site has nearly 600 million users (rising at 700,000 people a day), putting the valuation of each user at the amazing amount of $100.

According to the article's author Will Haven, then, "No – the tide is turning, with fears about privacy on the rise."

I spoke to a former classmate of Zuckerberg’s and asked whether Harvard students use the site as much as they used to. “No, definitely not,” he said. “When I signed up, Facebook was a closed and exclusive community. It was exciting to be a part of it. Now that era’s over, Harvard students are much more worried about protecting, not sharing, their own data.”

So what do social media DO Harvard students use?? Anyone?

Email is for old people

The NY Times published an article before Christmas about the drop in usage of email amongst teens.

The problem with e-mail, young people say, is that it involves a boringly long process of signing into an account, typing out a subject line and then sending a message that might not be received or answered for hours.

NYT quotes these stats:

The number of total unique visitors in the United States to major e-mail sites like Yahoo and Hotmail is now in steady decline, according to the research company comScore. Such visits peaked in November 2009 and have since slid 6 percent; visits among 12- to 17-year-olds fell around 18 percent.

One interviewee said:

E-mail has its place — namely work and other serious business, like online shopping. She and others say they still regularly check e-mail, in part because parents, teachers and bosses use it.

The substitution is text, IM and Facebook of course.

I pondered this over Christmas and did some further research. The argument is 5-8 years old: exactly the same stuff around the rise of instant messenger. See Interesting article: E-Mail is for Old People from 2006

I recall (with the horror, due to the trust / privacy violation) witnessing teens accepting a friend of a friend into their contact list, merely so that one person didn't have to have two chats going simultaneously. (With horror, because in instant messengers, the connection is ongoing and provides online presence too, whereas email is merely a single transaction.)

In a more recent article from February last year, Email is for Old People, the substitutes are text, twitter, or Facebook.

Here are the use cases:
"How do you communicate anything substantial, with only 160 characters?"

• "U only need 160 chars 2 say what U need 2 say. FYI."
• "Facebook is for bigger stuff - and pictures."
• "If you really need to write something big you just post it to your blog. I have an RSS feed of all my friends blogs."

Email has its place and won't be degraded to worthless. Teens lives are generally one dimensional: work, home, friends are all the same crowd, so one integrated tool will work for them. As they grow up, then the asynchronous advantages of email will be come useful to them.

Global Preference for Social Networking Service

Here's an interesting map from Vincenzo Cosenza which mashes up Alexa data with Google Trends to produce a map displaying the primary preference for a particular social networking preference by country.

Also, this table (from the same site) displays the top three social networking services by various countries:



Facebook is all conquering, apart from Google's Orkut in Brazil which remains an large exception, even if Portugal has already been steam rollered by the Zuckerberg machine (stolen from Hi5 actually).

What is interesting is how recently, eg June 2009 (visit Vincenzo's site and scroll down), the picture was much more fragmented, with the odd domestic provider holding out against FB. These would appear to be second choice networks now. MySpace appears to be a US oddity too.

State of The Blogosphere

Technorati CEO Richard Jalichandra gave his annual State of The Blogosphere presentation (click to view on Scribd) at the ad:tech conference.

The power of social media: Brutal, compelling evidence as to the power that the two giants of social media, Facebook and Twitter, have on website traffic. (Slide 20)

Why use Twitter
The The top five reasons for using mico-blogging ie Twitter (Slide 18):

1. To promote my blog
2. To bring interesting links to light
3. To understand what people are buzzing about
4. To keep up with news and events
5. To interact with readers of my blog

Facebook enables QR Codes

So, is it me or has interest in QR Codes just been punted into the fore? Clearly, when a service provider like Facebook adds this functionality (Facebook Kicks Off Implementation Of QR Codes), then it is going to have an impact in usability.

I don't know the legal situation with the use of QR codes in the US. Neomedia represents the IP owner with the most clout - justified or not. However, once again, they appear to be in trumpoil.

Facebook adds QR Codes

Clearly, when a service provider like Facebook adds this functionality to its service, then it is going to have an impact in usability. (See Facebook Kicks Off Implementation Of QR Codes)
According to the Techcrunch report then there are two  types of QR codes:

1. a personal barcode which would (I assume) return a basic profile + link to your profile 
2. “status QR barcode”. which would (I assume) return your current status when read.

Plaxo for sale

From TechCruch:

The company has raised $28.3 million to date over four rounds, including $9 million last February. The company had over 15 million users as of September 2006, and their recent integration into Google Open Social has led to a further growth spike.

Growth figures to the left.

Private Equity Hub reports:

Social networking site Plaxo has received an unsolicited acquisition offer of around $200 million.

Jeff Nolan evaluates Plaxo on the same basis as Facebook's price (ie per user):

The FB transaction valued each of the company’s 59 million users at $254, which when applied to Plaxo’s reported 15 million users nets the $3.8 billion valuation. So what is interesting about Plaxo reportedly hoping to fetch $100 million is that this valuation implies each user is worth $6.66 (hmmm 666…), which when applied to Facebook suggests not a valuation of $15b but rather $400 million.

Facebook opens up its platform

Facebook senior platform manager Ami Vora posted a blog entry:
(We) want to share the benefits of our work by enabling other social sites to use our platform architecture as a model. In fact, we'll even license the Facebook Platform methods and tags to other platforms." A developer page elaborates that "the 100,000 developers currently building Facebook applications can make their applications available on other social sites with no extra work.

BTW, Bebo, Friendster have released their own developer platform initiatives, as anticipated. (See previous blog entry)

Facebook's Beacon cranking up privacy concerns

Mighty rumbles across Facebook universe as it has implemented a new advertising technology, called Beacon, to make the online shopping experience that much more social ... and has now reversed out the most intrusive elements of the new functionality.

What's the fuss about?

When Facebook users shopped online, Beacon told friends what they looked at or bought. More than 40 websites, including Fandango.com, Overstock.com and Blockbuster, signed up to use Beacon software on their webpages and report what Facebook users did when they visited. Could be useful, yes?

YES, but naively Facebook launched Beacon as an "default opt out" system (ie everyone knew what you had bought, unless you specifically said 'Absolutely no way').

International Herald Tribune reports that there was a pop-up box alert to FB users that indicated that information was about to be shared with Facebook unless they click on "No Thanks." The pop-up disappears after about 20 seconds, after which consent is assumed. Admittedly, this pop-up appears on every partner site that has adopted Beacon.

Here's one the more harmless examples of where it went wrong, also from IHT:

"People should be given much more of a notice, much more of an alert," said Matthew Helfgott, 20, a college student who discovered his girlfriend just bought him black leather gloves from Overstock for Hanukkah. "She said she had no idea (information would be shared). She said it invaded her privacy."

At the other end of the scale:

"What if you bought a book on Amazon called 'Coping with AIDS' and that got published to every single one of your friends?"

Yukky, basically.

For users of social software, best practices in privacy are assumed - and those practices don't vary. Messing with these principles messes with the brand.

So guess what? Disgruntled Facebook users formed an online protest (more than 50,000 of them) and forced the mothership to rescind - Beacon is now 'default opt-in'.

As the BBC reports:

The changes to Beacon may not be the last that Facebook has to make to the technology.

Two rights groups, the Electronic Privacy Information Center and the Center for Digital Democracy, are believed to be compiling a complaint to the US Federal Trade Commission about it.

I'd be much more afraid of further Facebook backlash - further investigative reports like this don't help: Facebook's Beacon More Intrusive Than Previously Thought.

Facebook - should it exit or not?

Great article on Facebook at CNN, discussing when Facebook should sell. (It has spurned a $1billion offer from Yahoo! already. Its ticket price is apparently well over that now.I mentioned previously that a rumoured price of $2b was greedy. Or should it - shock novelty factor - IPO?)

Myspace sold to News Corp for $580 million. Marc Andreessen, who founded Netscape Communications comments, "Had MySpace remained independent, it would probably be worth $5 billion now".

The story contrasts with Friendster, who turned down $30 million in Google stock in 2003 (now worth $1billion today).