Mixed Feelings on Facebook's new Ad platform

So yesterday at ad:tech Facebook announced its long awaited ad platform. Here's a quick recap:

New services:

• Beacon - Beacon gives site owners the ability to integrate a user's actions on their own site into Facebook's newsfeeds. So if you have a customer who is also a Facebook user and they buy something on your site, it'll get displayed in their news feed.


• Social Ads - The social ads tool allows you to take Beacon a step further by having these "social actions" broad casted to people outside of your customer's network on Facebook. It's also highly targeted - you can target by gender, age, location and even political affiliations.


• Facebook pages - Now businesses can set up a page on Facebook where they can recruit fans/customers (new phrase: fansumer), and use FB as a new point of contact. The pages allow you to set up photo areas, discussion boards, a wall and even a messaging center so it's easy to keep in touch with your following. It's basically a souped up version of Facebook Groups.
  


• Insight - Facebook Insight is an analytical tool that helps you measure your reach and penetration into your target market on Facebook.

I must say, it's a pretty comprehensive suite of features and it definitely shows some forward thinking on Facebook's part.

But in light of Google's OpenSocial announcement last week, I don't see this as being a killer app.

If you look at the argument I laid out in my last post, you'll quickly see how Google has the potential to cripple Facebook's ad platform. I mean, all Google has to do is get the rest of the social networks (and it's network of existing publishers and advertisers) to line up behind a new social ad platform, and then POOF, Facebook's value is greatly diminished. It becomes just another site to advertise on as opposed to a category killer like Google's AdWords.

Just as a side note, Google's AdWords is a category killer for a number of reasons. It's ease of use is just one reason, but the real value is in Google's reach (the network effect). The more publishers that serve Google's ads the more valuable the service becomes to an advertiser because they no longer have to reach out to all those publishers individually. The same will apply to any social ad platform that Google creates.

So all in all, Facebook showed some real vision due to the fact that this was a platform that had probably been in development for quite some time (definitely prior to the Google announcement). But they'll have to do a lot more if they want to protect their castle.

Portable Social Networks

Been thinking about this topic a lot lately...

In the wake of the tremendous success Facebook's application platform has had, many people have been wondering what the next "big" application platform will be. It seems like Facebook is doing for the web what Microsoft did for the desktop -- so in order to understand what might come next, we need to recognize why these companies were successful to begin with.

Facebook and Microsoft were successful because their platforms had 3 key characteristics:

1. Created an easy to use API (Application Programming Interface).
2. Opened up their system to anyone who wanted to build on it - no partnering necessary.
3. Created an effective distribution mechanism (Facebook really nailed this more than Microsoft ever did).

So what's next?

Many argue that the web itself is the next great application platform. However, I think it's clear that in order for this to happen there needs to be some type of social network weaved into the fabric of the web. That's the only way the crucial distribution component will work -- developers are going to need a frictionless mechanism for promoting and distributing their software.

Rockefeller had it right -- it didn't matter if you hit oil, if you couldn't distribute it then you couldn't make money. So he focused on distribution...and the rest is history.

So what could be done to make this vision of frictionless distribution occur on the web?

Well, the first thing we'd need is a portable social network - or a network that wasn't bound to a particular web site. It would require a standard to be developed for social networks, much like the standards that were developed around SMTP (e-mail), HTTP (web sites), FTP (files), etc.

Brian Oberkirch recently wrote one of the most compelling outlines I've seen for the necessary "ingredients" in a portable social network. Really amazing stuff there.

But I don't know how much of a reality this vision will become. OpenID has been around for a while now and even though more and more sites are becoming OpenID compatible, we're still not seeing a lot of traction.

I think we'll see the same when it comes to creating open social networks.

Maybe it would take the backing of a major internet company to get this off the ground, but then again Microsoft had tried pushing the Passport system for quite some time before raising the white flag last year.

We'll just have to wait and see, but if a distributed social networking platform were created and reached some level of considerable scale then I think we'd be seeing the advent of "Web 3.0" (I know, I hate using the version numbers for the web too).

Playboy Goes Social

Just saw a TechCrunch post about Playboy launching a social network - smart move Hef!

Here's why:

1. The way most adult content sites work is through a network model. They'll start with one site, build others and use them all to cross promote the other. It's what enables the smart companies to earn 30%+ margins and the dumb companies to earn under 10%.

Building a social network around a brand will allow Playboy to create a great funnel effect to their "pay for" services and sites.

2. On top of a reality show (which they already have) a social network is the next logical step for Playboy to hit the mainstream audience that might not otherwise get exposed to the Playboy brand or content. This is primarily due to the fact that as a paper magazine Playboy has lost a bit of its luster amongst the millions of online destinations that offer more raw, real and free content.

I think this puts them right back in the game.

3. They now have a HUGE talent pool to scout from.

Before, young girls aspiring to visual "deposits" in many a young man's "spank bank", had to submit photos and ID information directly to the magazine in order to be accepted for consideration.

Now they just post a few provocative profile pictures and their on their way!

To what? I don't know - as long as it's not my daughter or girlfriend I could care less.

All in all, well done Hef -- you've combined two of my favorite topics into one: Tech and Porn!

Gotta love a guy that can date 5 women at once while in his 80's.

Where did Friendster go wrong?

In my personal opinion - which, in the grand scheme of things, doesn't amount to much - one of the most important things one can do as an entrepreneur is to learn from past mistakes. Not mistakes of one's own doing, but rather from the mistakes of the countless entrepreneurs that came before us.

"Standing on the shoulders of giants" is a phrase that comes to mind.

Now we all know of the well documented technology problems over at Friendster, along with the internal VC and management conflicts - lessons to be learned from those two issues alone but we need to dig deeper here.

Here was one of the very first large scale social networks - this company had the world in the palm of its hands but somehow watched it all slip away (like my shot at becoming a professional basketball player when I never grew taller than 5'11'').

And while this company is starting to pick itself up by its boot straps it still has never manged to "get it right" -- what are they doing wrong?

Here are some of my thoughts:

1. Poor Information Architecture and Usability

I've brought this up to a number of people and while some agreed, there were many who didn't. But I really stand behind this one and I'll talk about why.

First off, why do ads take up almost a third of the profile screen? They have a massive leader board at the very top and then two big boxes on the right. I can see how that may benefit the bottom line but how does it add value to a user's social networking experience?

And have you ever tried using Friendster's photo feature? Forget the fact that you still can't tag other people in photos, click on a photo to go to the next one, etc... those things are annoying enough, but have you ever noticed this:

If you hit the back button in your browser while looking at an individual photo it'll take you right back to the gallery view of all of the photos (usually causing me to lose my place, say "Oh fuck it" and go elsewhere). The site is essentially forcing us to go against conventional wisdom in favor of Friendster's desire to use AJAX in their code - sorry guys, big "no no".

The list goes on but I'll stop here.

2. Day Late and a Dollar Short

Contrary to popular belief, Facebook didn't originate the idea of a news feed in a social network. The originator of social networks did - that's right, in case you forgot, Friendster was the first to offer users a peek at what their contacts had been up to on the site.

However, until recently the social news feed wasn't very "social". Let me explain...

When Friendster first released this feature it would simply tell me that one of my friends added a new friend, but it wouldn't say who. It would tell me my friend added a new photo, but it wouldn't show it to me. It would tell me they got a new comment but not tell who wrote it and what it said.

Essentially, the system was designed to promote click-throughs, page views and revenue. It wasn't designed to increase the utility of the site - again, another big "no no".

They did finally started to head in the right direction recently - now I can at least see who my friends are becoming friends with - the comments and photos are still off the mark though.

By releasing a half-assed feature that was meant to increase revenue and not utility, Friendster was once again passed over and Facebook reaped all the glory and benefits of the social news feed.

3. No Platform, No Traction

My friends are probably sick of hearing this one but history has proven that the companies who help other companies make money are dramatically more likely to succeed than those who don't.

Microsoft, Wal-Mart, Google, MySpace, Facebook - what do they have in common?

They all created a platform that allowed other individuals and companies to make money.

Microsoft allowed software vendors to create software that could be marketed and sold to millions of users on a standard operating system.

Wal-Mart made it so people from all walks of life could afford to buy DVD players and TV sets.

Google helped start-ups monetize their traffic and gave marketers the ability to advertise in every corner of the web.

MySpace and Facebook both allowed application developers to piggy-back their networks and market their wares in a viral manner - Facebook is unarguably doing a better job at this than MySpace which is why I think they'll eventually "win" but I'll save this argument for another time.

Friendster just hasn't caught onto this concept - they're operating a closed social network (which is mediocre at best) and not allowing for the third "C" in Hagel's "3 C's" of the web. They have the Content, they have the Community but they just don't have the Commerce!

Lessons

And the moral of the story kids: Don't be a "Friendster"... j/k ;)

But in all seriousness, these are the things that go through my head as I toil away in my crappy office space building my latest company.

How can I make my web application as easy to use as possible? How can I reduce friction, clutter, excess, etc.? How can I make this site as elegant as the iPod?

How can I use the technology I'm building to solve a real problem for people - how can it become a utility for my target audience?

How can I give other people the opportunity to benefit from this service monetarily?

Tough questions - but I think if we keep them in mind we'll at least avoid many of the mistakes made by those that came before us.

And those are my two pennies for the day!