Archive for December, 2008

11
Dec
08

Amazing Facebook Statistics

facebook_50More on facebook after yesterday’s post. I just read the article ‘Experts split over neting customers in cyberspace’ . While the article itself is an OK read, the stats on how high facebook’s overheads are getting made my toes curl! Cloud computing and running the world’s largest social networking site is not for the small players! Read on…

“Facebook is eating up cash. With a 100 million users, a trillion page views per year, with about two hours spent per month and per user, and 300,000 images are uploaded every second, creating by far the biggest photo library in the world with more than 10 billion images, the e-marketer estimates of the 2008 revenue of Facebook – roughly $265 million – is unlikely to be enough to cover the expenses.

According to Techcrunch, most of the $500m raised by Facebook is already gone. Facebook was said to have turned to Dubai for cash, knowing that the UAE boasts one of the largest social networking bases in the world.

Why such expenses? Facebook had 13,000 servers running a few months ago, and analysts say the company will need 50,000 machines next year. It currently pays a $1m monthly electricity bill, and around half million dollars per month for bandwidth. It has two terabytes of data – mostly photos – uploaded every day, therefore dictating the purchase of one NetApp 3070, a mammoth storage system, each week. In addition, Facebook’s headcount, estimated between 700 and 800, maintaining this infrastructure and dealing with the output of a half-million developers, costs about $80m a year.”

10
Dec
08

Facebook Connect… what is it, Pros & Cons (and do we really need another online ID system?)

It’s been interesting interesting to see everyone (ok, so not everyone, maybe just the ‘social media types’) making such a big fuss over Facebook Connect, when it’s really not such a new concept. According to Facebook, Facebook Connect (henceforth FBC) has 5 general value propositions:

1 – Trusted Authentication – FBC gives end user piece of mind that a reputable ID management system is in place

2 – Real Identity – Facebook profiles can generally be trusted to belong to a person you know, not someone posing as someone else (although there are the obvious exceptions to this, just ask Paris)

3 – Friend Linking – theoretically, Facebook Connect lets you interact with your Facebook friends on any site, not just facebook.

4 – Dynamic Privacy – I class this more as ‘Centralised Privacy’. If facebook users make a change to their privacy settings on facebook, the change echoes across all other sites using Facebook Connect immediately.

5 – Social Distribution – bring content in from outside sources into Facebook for ‘social distribution’ with your facebook friends.

And all this is FREE to implement. OK, so that sounds pretty good right? (If you’re still scratching your head wondering how it’ll all work, check the vid I found on youtube below).

There are a number of immediately obvious benefits of the service…

Pro’s

  1. Audience Size – consider Facebook user demographics in Australia alone… 3.5 million Australian facebook users, around 800,000 daily unique visitors (see graph below), and with facebook boasting the title of “Australia’s  Most Visited Social Network Site”, you’ve got roughly 15% of the Australian population you can automatically ‘flip the switch’ for to ad functionality to your website. Further, specific demographics have adopted Facebook at higher rates than others (the elderly and young kids, for example, still generally aren’t on facebook), so up to 40-50% of your audience may be on facebook depending on the makeup of your customer base. Adding Facebook Connect enabled functionality could add considerable value for your customers and be a point of differentiation from your competitors. Sweet! 
  2. Switching Costs – Whilst switching costs are undeniably a good way of retaining customers, intentionally building them into your product offering is unethical. However, where switching costs are based on one company providing better value / service than others, the consumer actually benefits. You can achieve such outcomes through service differentiation via Facebook Connect. For example, imagine two online bookshops, A and B, both of which are identical except for the fact that Shop A has a chat service through Facebook Connect where potential buyers can ask their friends if they’ve read the book they’re about to buy. If I value that service as a consumer, I pay a price to switch to Shop B – the price is the forgone value I receive from the extra service on Shop A.
  3. Conveniencealot of the people I know have facebook as one of their homepage tabs when they start up their browser. It’s the starting point for their web surfing session. If they don’t, it is usually one of the first sites they visit when they log onto the net. Entering their facebook login details at the start of a session means they’re automatically identified, logged in and ready to partake in whatever extra services you or anyone else can offer them using Facebook Connect. Whilst this is not really all that different to, say, logging into hotmail and then using a Live ID cookie for other sites after logging in, it’s still convenient for Facebook users.
  4. Builds site traffic & loyalty – using facebook connect may be a good way for businesses to increase the amount of traffic to their site. Imagine this – your friend on facebook uses Facebook Connect to tell you about the music they’ve just downloaded from mp3.com. You want the same album, usually use iTunes, but it’s much easier to just click the link in your facebook feed for mp3.com than go and try to find the same album in iTunes.

fbdotcom_stats

 Graph – Daily unique visitors to facebook from Australia alone.

There are a number of other advantages of Facebook Connect, but none of them are really specific to Facebook Connect alone… they are all possible using one of the many other online authentication mechanisms available (edit: google just released the beta of their offering too).

 

Cons

  1. No such thing as “Single Sign In” service – all the truly big players in cloud computing / social media company have their own identification / portable social graph style system. Facebook Connect is based on the Facebook world view, but the other big players all have their own versions, will roll it out on their own sites, and push for other sites to adopt their system, so unless we see a true monopoly in the industry where there is only one provider, there will never be a single sign in service. Microsoft, Google, Yahoo etc won’t be giving up their own systems anytime soon. And the OpenID guys aren’t going anywhere either.
  2. Noise sucks, #1 –noise’ (i.e. irrelevant content appearing in users’ social network feeds) is getting to be a major problem on social networks (for example, 2/3 of respondants to a recent study said they’d switch social networks if spam became too frequent). With us marketers trying to flog our wares via social media, user’s friends trying to drive traffic to their own personal blogs, friends who want to share every time they go to the bathroom and a million useless apps all competing for facetime with us, facebook is already noisy. Facebook Connect actually adds to that noise, and may actually have negative re-percussions for Facebook.
  3. Noise Sucks, #2 – whats bad for facebook users is bad for facebook marketers. More noise = more likelihood that facebook users will not pay attention to anything that remotely resembles an ad on facebook. This is dire when display ads are already offering ever decreasing proof of ROI.
  4. Privacy – people are still bugging about privacy. Not everyone, mind you (I am always amazed at the number of people who hand over their twitter login details to third party servcies just so they can see what some random, probably inaccurate equation says their online influence is). But with the uproar around Facebook Beacon (was that 12 months ago already?), you can bet Facebook Connect will have it’s opponents and won’t be for everyone.
Is it necessary, though?

As for the question whether we need another “ single sign on” identification / portable social graph system, my answer is “Maybe” (yeh, a cop out, I know). From the above analysis, I’m not proposing that Facebook Connect won’t get off the ground. Facebook’s large and fairly loyal customer base will ensure fbc will be somewhat successful. However, it isn’t a radically new offering in the market it is entering, and adoption will be determined by more than just potential audience size. In a way, having a complete monopoly of ID systems online would be the ultimate, as it is the only way we will ever see a true single-sign-in service across all websites. The problem then is, who would own / run that system – it would be too big and expensive for government (plus, who governs the Internet?), and it would be too powerful a thing to leave in the hands of a single private organisation. AT any rate, as Wired’s Michael Calore wrote, Facebook’s entry marks the beginning (I would argue the intensification) of an ID War.

03
Dec
08

Simpsons take on Apple & Steve Jobs

Ok, this is not strictly e-marketing related, it’s just a bit of fun. I don’t think that Matt Groenig and team at the Simpsons understand how much damage they can do to a company by parodying them in an epsiode… we all remember the epsiode where Homer starts up his own internet company and Bill Gates came with hired goons to “buy him out”. As a PC guy, that one cut me deeply 🙂

Well, the team have now set their sights on Steve Jobs and Apple. It’s pretty well done… especially like the part where Comic Book Guy comes running with his hammer to smash the bigscreen Jobs is being telecast over… remind you of anything?

Get in and watch the video before it gets taken down…Props must go to http://ewarwoowar.typepad.com/ for this (it’s where I came across it).

UPDATE: As of the 8/12/08, the video had been taken down… figured this would happen. If you’re interested in seeing the video, go to youtube and do a search for “simpsons mapple store”… there are a few links.




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