Facebook

We are so in the right business according to the Wall Street Journal. Lee Gomes interviews chief executive of Sparta Social Networks, who apparently is making big, big money from supplying dedicated social networks to companies. Don’t have plans to build your own? Better get on it:

“…social networks have become the Web site of this decade. Back in the ’90s if you didn’t have a Web site you were irrelevant; the same was true with having an e-commerce site in 2001. That is where social networks are right now.”

We’re helping clients now with specs and designs for their own private-branded social networks and it sounds like we are charging not nearly enough:

” A highly customized social network can run between six and seven figures. But those are ones with lots of bells and whistles.”

I say bullcookies to this. Almost all companies need a web site. A much smaller percentage need to provide a Facebook-style community to join. Harley Davidson fanatics are not the same as Clapper owners.

Given the open source solutions out there — seven figures as a relevant range figure seems outlandishly high to me, at least for the initial launch. I suspect you could push it to include the allocated overhead related to the time spent by marketing V.P.s and other high-level staffers required to make it take hold, and certainly maintaining servers dedicated to millions uploading videos etc. would require that kind of budget. A major marketing campaign could be a part the expense being considered here — but I doubt it.

For the vast majority of companies, a custom social network should run between four and five figures IMHO.

Launching a social network? Plan to spend seven figures? We want to have you speak at our next conference. Contact steve AT parnassusgroup DOT com.

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Tim Davies has a good breakdown of the pros and cons of using either Facebook Pages or Facebook Groups to engage with your audience on Facebook.

I wrote about this split a while ago when Pages first showed up on Facebook, and most of what I said then still stands.

Pages and groups are very similar in what features they offer. The most significant division between the two is mental: a page is inherently more commercial than a group. I think you should pick your vehicle based on how commercial you’re planning to be.

If you’re promoting a well known business or anything that is unabashedly capitalist, putting up a page instead of a group shows that you understand the lay of the land in Facebook, and you’re not just a Clueless Marketer.

It’s like setting up your both on the show floor, instead of trying to exhibit in the middle of a session room.

Robert Niles at Online Journalism Review posted a couple of good reasons why it might make sense for Facebook to make completely removing a profile a more difficult process than just hitting a button:

Here’s a scenario: You require readers to register in order to contact other registrants through the site. Someone registers, spams selected readers with who-know-what abuse, then immediately deletes his or her membership. It’s the online equivalent of a drive-by shooting.

Definitely worth a read.

In case you missed Rodney’s late night tweets, Facebook sent out an e-mail message last night to all app developers using that “forced invites” trick that simultaneously works so well and pisses people off so much:

Invites Violation
Dear developer,

Your application has been temporarily restricted from using requests/invites. This is because users of your application get trapped in a UI interaction for inviting friends.

If the user clicks the Facebook-rendered buttons “Skip”, “Cancel”, or “Skip This Step”, he must not be re-presented with an invite friends UI unless he explicitly selects to invite friends from a page that offers more than that single option.

You should jump over to his post for the whole e-mail, but the gist of it is that you’d better get your ship in line or their not going to let you invite ANY more users.

I think that, given the prevalence of this technique, and the lack of any statements from Facebook about it thus far, it would’ve been more appropriate for them to send out a notice, something like “you have seven days to remove this UI trap from your application, OR ELSE.”

It’s a little like smiling at a child while he reaches slowly for the TV remote and then yelling at him when he grabs it.

Ben Worthen on the WSJ Business Technology blog tells us that Bill Gates has quit Facebook:

None of those reasons caused Bill Gates to abandon his Facebook account, however. His problem is excessive celebrity. After Microsoft invested $240 million in Facebook last year, Gates spent 30 minutes a day on the social-networking site, the Sun reports. “But he signed off after getting more than 8,000 friend requests a day, and spotted weird fan sites about him,” says the Sun, citing an unnamed colleague. The article linked above says he deleted the account. A Microsoft spokesperson tells us that Gates hasn’t deleted it, but that he has stopped using it because he was inundated with friend requests.

Of all the reasons to stop using Facebook, I’m not sure that’s a good one. You can turn off email notifications and you can now use Facebook’s built in ignore all requests button to churn through that problem in about 20 seconds.

I think the real problem with Gates’s Facebook use is that it was probably symbolic in the first place. Here is a man who probably, I’m guessing, doesn’t get a lot of personal value from the service. That’s fine. Facebook is not for him. Facebook is not for everybody.

Facebook is a great tool, but it’s communications-oriented. I’m guessing it’s not the best place to be a hermit

( Give us a Digg, eh? )

It looks like even the New York Times is now getting concerned about the permanence of people’s profile data on Facebook.

To me, it’s always been a bit of a head-scratch. This isn’t your private rolodex. You’re creating an online profile. Thanks to the wonders of caches and things like the Way Back Machine, practically everything you ever put on the internet, anywhere, is likely to survive in some way or another.

You should be aware of that when you sign up for Facebook.

But regardless, the fact of the matter is that when you “delete” your Facebook account, not much really happens. They keep all of your friends, preferences, apps, discussion posts, messages…everything. You just can access it by logging in with your e-mail and password. Yes, I said can. Yes, you can. Try it.

So the only difference between a “deleted” facebook account and an active one is that you’re not logged in, and your friends can’t visit your profile anymore (but they can still tag you and invite you to groups and events). Seriously.

In the end, I really think it’s not that big of a deal. There are legit ways of getting rid of your account, and I think it’s unlikely that anything is going to stick around and haunt you, especially as more and more people use and understand online social networks.

Still want out? Simple: violate the terms of service.

Remember all those complaints about disabled Facebook Accounts? Facebook goes through and pulls your discussion posts, takes down your profile and everything.

So here are a few tricks that are likely to get your account deleted for real:

1. Post a lot of identical messages to a lot of discussion boards, REALLY QUICKLY.
2. Suck in your Blog & your Twitter Account, and post a whole bunch to both of them REALLY QUICKLY
3. Switch your name to something obviously fake, like “Buy Viagra”
4. If you’re feeling particularly rebellious, import some porn. Post some lude and lascivious content to their servers, and send an e-mail to support@facebook.com telling them you did it

Or you can hunt through the terms of service and break any number of other rules you find.

I think you get the idea. My one suggestion might be, though, make sure you’re really done with Facebook before you do it.

[ Update:

I just got an e-mail with a quote from Brandee Barker at Facebook:

There are two different ways to remove your information from Facebook. The first is to deactivate an account. Once a user deactivates the account, his or her profile becomes inaccessible on the main Facebook service, and the data is kept by Facebook only to allow easy reactivation. The second option is to delete the profile altogether. When a user deletes his or her profile, personal information -- such as name and all email addresses associated with the account -- is deleted from Facebook servers.

If a user decides to join Facebook again, he or she would need to create a new profile. We are working to better explain the simple deactivation process, and to ease the deletion process for those who want their personal information removed from our servers. Additional information can be found on the Facebook help page at http://www.facebook.com/help.php?page=5

The relevant portion of that Facebook help page is the following:

If you do not think you will use Facebook again and would like your account deleted, we can take care of this for you. Keep in mind that you will not be able to reactivate your account or retrieve any of the content or information you have added. If you would like your account deleted, please contact us using the form at the bottom of the page and confirm your request in the text box.

Needless to say, it's a bit of a quieter way to go

They also point at Google for an example of "data delete" requests from other services. Here's a snipped from the Gmail TOS:

You may organize or delete your messages through your Gmail account or terminate your account through the Google Account section of Gmail settings. Such deletions or terminations will take immediate effect in your account view. Residual copies of deleted messages and accounts may take up to 60 days to be deleted from our active servers and may remain in our offline backup systems.

I guess the difference is that you don't hear many stories about people trying to delete their Gmail accounts and failing to do so.

It's also a different story because Gmail doesn't have the same kind of social networking functionality built in...it's harder for your friends to stumble across old emails from your Gmail account than it is for friends to accidentally discover old profile data buried in Facebook.

It's also interesting to note that I don't normally get these kinds of follow up emails on my posts, so it's possible they're doing some damage control from today's NYT article...

]

Our buddy Rodney Rumford has a post today on FaceReviews about how half of all the 16,000 facebook apps have fewer than 350 installs. The stats are undeniable—a lot of Facebook apps don’t end up “making it,” in terms of massive user base.

Rodney is right about almost everything in his post: you need to take the time designing an app that will be viral, socially engaging, and make users care. But what I disagree with is this:

What this means is that many applications never even got off the ground and could effectively be considered low noise and a wasted effort of time and money.

I think that’s a bit of an overstatement. I almost hate to point to it again, but you might remember our BlogTips application (which has right about 350 installs, incidentally) had incredible ROI, despite the rather small user base.

I’ve said it before and I’m sure I’ll end up saying it again (it’s not that original, people just forget): getting to the right audience is far more important than getting to a large audience.

An app is not low noise and wasted effort if you get to the people who are going to take action, get involved, buy your product, evangelize your message, or whatever else you have in mind. It doesn’t matter if it takes 50 installs, 100, 500, 5,000, or more to do it, it’s whether or not you get them.

Everybody knows that the Facebook Terms of Service are a bit more strong-arm than the TOS on other sites. Mostly this has to do with content creation and storage - what you are allowed do with the content you bring in to or create on facebook, and what they are allowed do with it

The tricky part about fine print is that it’s pretty easy to ignore. That’s the whole point. That’s why in Europe, cigarette packs have giant block letter on them saying things like “SMOKING WILL KILL YOU.”

The point is that people are wired to forget these things. But when you’re uploading and importing content to Facebook, you are tacitly agreeing to the terms that they set. Does your value match the cost?

Edward Bilodeau deided today that he would stop pulling in his blog posts and FlickR, based on his examination of the Facebook TOS:

I’ve decided to remove my notes and photos from Facebook. I’ll still be posting items, status updates, etc, but I will no longer be pulling content in from Flickr or my weblog.

Why? Compare the Facebook’s terms of service regarding user content (the relevant portion that affected my decision is in bold)

If you’re curious to see what jumped out at him, go read his post.

I think there’s a fair chance that the liberties facebook takes with user content is more to cover their collective legal butts, since it allows them to regulate their site content without any pesky ownership rules getting in the way. But if that’s the case, it still might not send the right message to users.

I’m a few days late on this bit of news, but two things happened today: first, I saw the ad on television, and second, I saw a post about it on TUAW.

Pretty cool for Facebook to be, as far as I know, the first iphone web app to make it into an iPhone commercial. I gotta admit though, the Facebook web app is one of the best designed iphone web apps I’ve seen. I almost like it better than regular Facebook.

I would like it better if it let me play Scrabulous.

Nick O’Neill at AllFacebook just posted a really interesting comparison between Google’s AdSense and Facebook’s SocialAds based on a semi-scientific experiment that you can find here. By the numbers, Google takes the cake:

Visitors coming from Facebook:

* pages per visit: 1.22
* Bounce rate: 82.84%
* average time on site: 13 sec
* 3.92 % clicked to Amazon
* 7.84 % clicked to Audible
* total conversion rate (clicked on product links): 11.76 %

Visitors coming from Google:

* pages per visit: 1.61
* Bounce rate: 67.21%
* average time on site: 42 sec
* 12.31 % clicked to Amazon
* 9.94 % clicked to Audible
* total conversion rate (clicked on product links): 22.26 %

I’ll admit, I’m not an advertising junkie. I don’t know everything there is to know about ads, CTRs, conversions, yield, and whatever else is involved.

But I’m pretty sure that there’s more to this than just “by the numbers.”

One of the things I think we’ve really lost track of with CPC (cost per click) ads is the value of the impression. For example: billboards on the highway. Nobody is expecting drivers to flip open their cell phone and order that new car, right now!!.

The idea is exposure. The same goes for most advertising throughout the history of advertising. Advertising is supposed to make it so that when a person goes to the store and looks for pens, she thinks “Bic.” Once you start focusing on action…now you’re talking about something else entirely.

Just to be clear, I’m not saying that Facebook ads are more effective. I’m just saying that I think the CPC metrics are wrong for most advertising contexts. It works for Google and other search engines (and google is clearly the leader in monetization) because people are there to *click* on things.

Almost everywhere else on the web, though, I think we may eventually have to rely on other metrics. I wonder how many people on FB already owned the book? They’re fans after all. The FB ads had images in them, unlike the Google ads. How many people bought the book a week later? How many people thought about the book the next time they were at the book store?

We can’t measure these things, but they are real effects of advertising. I think you have to consider them before you throw SocialAds out the door.

Today I ran into a post from mid-January over at Facebook Observer that talks about the number of Facebook friends you have.

The part that jumped out at me was this:

Heck, I have more subscribers to this blog, then[sic] I do friends on Facebook. Honestly, I do not buy the quality over quantity bit either. There is power in numbers and having lots of friends never hurts.

It’s a fair point, even if put rather bluntly: having more friends on Facebook is often an advantage. It depends on how you use the site, naturally, and having tons of Facebook friends is not everyone’s goal. For one thing, a “Facebook friend” means something entirely different than a “friend” in real life.

But if you use Facebook as a media funnel, like I know many people do, it’s definitely an advantage to have more friends. You get to share with more people, and more people get to share with you.

What do you think? Is quantity really better than quality in Facebook friends?

A recent post on the Facebook Developers blog explains that application developers will soon have to contend with a new notifications system designed to cut down on application spam.

Under the old system, all applications could send a user up to 40 notifications a day. Under the new system applications whose notifications get more click throughs will get more notifications to send. Those whose notifications are frequently marked as spam will get less. In short, it’s like Akismet for notification spam.

This is a relatively huge development in making Facebook more user friendly once again. I’ll be excited to see how it actually works in practice, and how developers react — both in attitude and in tactics.

There’s a reason I’m not a big-wig business guru richer than Bill Gates: I’m not smarter than him (yet).

I’m also not smart enough to have called this myself, although I’m sure it’s not really news to a lot of people who have seen this space before. But Deal Radar has a post up today explaining how it’s quite probable that Microsoft outmaneuvered Google, Yahoo!, and Facebook, and they win regardless of what happens to Facebook (sink or sail):

Microsoft thought to itself, “Google must not acquire Facebook. Neither should Yahoo. Let’s play to this kid’s ego, and by sprinkling $250 Million on the exercise, we can establish an artificially high valuation that would bring their options of exit down to zero.”

And they did.

On the receiving end, 23-year old Mark Zuckerberg was thinking, “I must be a real stud, I’ve now got Microsoft eating out of my hands!” If some adult at the investor table tried to mumble that this valuation may cause some problems, he was appropriately silenced by the euphoria of the $15 Billion.

Of all the explanations and justifications of Microsoft’s no-longer-as-recent investment in Facebook that I’ve seen, this is the one that rings most true to me. I already sort of knew that Microsoft wanted FB in their pocket as opposed to anyone else’s, but I didn’t really understand why they pushed the valuation so high until now. It also limits Zuckerberg on IPOs.

Live and learn. And hope you’re not always on the learning end, I guess.

Anthony LeFauce posted earlier today on AllFacebook about a British Intelligence and Security report that found social networks and internet communications in general are too disparate to allow them to effectively track communications.

I think that this is actually a different security issue than the one that’s been hopping around the blogosphere recently. It’s not just “scapegoating,” as Anthony suspects.

The issues facing the security sector reflect a more fundamental shift in our communication technologies, which has been years in the making. Most of what security agencies are concerned with is live tracking. They want to know what a terrorist cell is doing next week so they can take preventative action.

Security in terms of the user, which is what we’ve been talking about in the blogosphere so far, is about databases. It’s not time-sensitive information, it’s identity-sensitive information.

Facebook and other IP-based communications systems, with 500 nodes that can really only give you so much information about who’s sending what, is a nightmare for anyone who is trying to keep tabs on a person’s communications and activities as they’re occurring.

But it’s a gold mine for anyone who simply wants to collect a person’s communications after-the-fact. There are dupicate, triplicate, bazillionate copies of the data on servers all over the place. It’s not like a phone call - you make it once, and if nobody records it, that chance is gone forever.

So to sum it up, we’re looking at a communication system that is scattered, hard to track, but easy to archive. Sucks for governmental security, and sucks for transience.

I don’t think anyone is scapegoating, it’s just a system that naturally tends to be secure in the wrong ways.

According to Valleywag (I know, I know) and Kara Swisher today, Zuckerberg surprisingly announced some statistics for Facebook’s 2008 plans. From AllThingsD:

Revenue for Facebook for 2007 will be $150 million, as has been widely reported. But for 2008, Zuckerberg projected revenue to be increased to $300 million to $350 million.

More interesting was the news that Facebook would spend $200 million next year on capital expenditures, which is a whole lot of servers.

By the way, more expenses, noted chatty Mark, those employee levels would rise to more than 1,000 in 2008 from 450 now.

Zuckerberg also announced the company’s EBITDA as $50 million, which means that a $200 million expenditure puts them down $150.

Valleywag chastises Facebook for running in the red this year. Swisher didn’t say as much but you can read the disapproval between the lines.

But it sounds to me like a good investment. One of the more common complaints about Facebook for a while has been the slowness of the servers. If Facebook ran like Google in your browser, I think you’d notice a difference.