Facebook’s passive-aggressive friendship
We are witnessing a fascinating changing-of-the-guard moment in tech. The old Internet, represented this week by once-mighty Yahoo, is fumbling with another leadership crisis it must solve before it can even think about restoring some semblance of relevance. The new Internet, Facebook, is ruled by a young man in a hoodie who is on the verge of creating a massive public company that, as was the nascent Yahoo back in the early ’90s, will be an Internet darling longer on potential than track record, but running hard on an open field.
The common thread might seem to be the “If it’s big, it’s gotta be BIG” illusion that got us all in trouble at the turn of the millennium, when Internet investment hysteria equated today’s eyeballs with tomorrow’s profits. But it’s always about the profits, and the people who promise them. This time that person is Mark Zuckerberg, who as the books on the Facebook IPO closed Tuesday, well in advance of Friday’s first trade, seems to have convinced Wall Street that his seven-year-old company could be worth more than $100 billion — the richest-ever launch in Silicon Valley.
When you value your company at 100 times revenues, investors are banking on the belief that Zuckerberg has perfected the unstable compound that is social abandon and advertiser hunger.
Search remains pretty much the top use of the Web (as opposed to the Internet) – the gateway to everything else. The other big use is now social, which was invented on the Web but whose chops will be tested in the app schoolyard that is the mobile Internet.
But thus far, advertising works better on search than social. Google makes about $40 billion a year, almost 100 percent on ads. Facebook is reporting last year’s revenues at just north of $1 billion $3.7 billion. Google has a market cap of roughly $200 billion – so it’s twice as big as Facebook’s IPO valution and makes 40 times the money more than 10 times the money.
While Facebook is very successful, the question is: at what? It’s great at creating a community of time-wasting freeloaders, but it needs to be good as an advertising medium to be worth anything to the institutions falling all over themselves to get in on the ground floor of its stock.
To compare the new and the old way of tech, let’s just say, for the sake of argument, that there are two kinds of Internet companies – Googles and Facebooks.
Facebook’s Timeline: A catalog of nothing
We have seen the past, and it doesn’t work.
Over the past few weeks, Facebook has been rolling out Timeline, its effort to remake its members’ profile pages into scrapbooks that, like nearly everything published on the social web, is told in a reverse chronology. While redesigns always inspire grumbling, the discontent seems particularly strong this time — 70 percent of users surveyed say they just don’t like it, and Facebook’s own blog page announcing Timeline is filled with complaints in the comments.
At first glance, Timeline looks interesting — a retrospective of an online life. But soon enough, there’s plenty not to like. And the biggest problem isn’t that Facebook scrapped the elegant sparseness of the old profile page for a cluttered interface, or that many users will — yet again — need to reset their privacy settings, or even that, once you switch to Timeline, you can never go back to the old page.
No, the biggest problem with Timeline is that it feels like a mean prank Facebook is playing on its users. It confronts them with the unpleasant reality that the sum total of lives preserved by social media is not just mundane but inauthentic, devoid of what gives meaning to the very thing it’s meant to catalog: life.
The press billed Timeline as a kind of scrapbook. But it actually couldn’t be further from one. A scrapbook preserves symbols of moments with deep emotional value. Facebook is an accidental diary of our procrastinations — the games, political rants, lolcats and memes that distract us in the moment but lose meaning even after a few days. If a scrapbook holds the memories of our lives, Facebook preserves the background noise. Timeline makes this all too painfully clear.
Facebook, however, has big plans for Timeline, which is why it’s not letting anyone escape from Timeline’s clutches. Timeline is the front-end user interface for Social Graph, Facebook’s grand plan to create a social platform for the Web itself. Users will share and discover video, music and other content on any number of websites and mobile apps, and their Timelines will act as a central clearinghouse for all of it.
Blah blah blah blah. Could care less about the grand strategy behind the timeline. All i know is that i hate it! Looking at someone’s wall should not be an arduous task. This is the same kind of nonsense that made MYSPACE so unbearable. Seems like their are too many guys sitting around just trying to justify their salaries. Some just never learn “IF IT AIN’T BROKE, DON’T FIX IT!”
from Paul Smalera:
The piracy of online privacy
Online privacy doesn’t exist. It was lost years ago. And not only was it taken, we’ve all already gotten used to it. Loss of privacy is a fundamental tradeoff at the very core of social networking. Our privacy has been taken in service of the social tools we so crave and suddenly cannot live without. If not for the piracy of privacy, Facebook wouldn’t exist. Nor would Twitter. Nor even would Gmail, Foursquare, Groupon, Zynga, etc.
And yet people keep fretting about losing what’s already gone. This week, like most others of the past decade, has brought fresh new outrages for privacy advocates. Google, which a few weeks ago changed its privacy policy to allow the company to share your personal data across as many as 60 of its products, was again castigated this week for the changes. Except this time, the shouts came in the form of a lawsuit. The Electronic Privacy Information Center sued the FTC to compel it to block Google’s changes, saying they violated a privacy agreement Google signed less than a year ago.
Elsewhere, social photography app Path was caught storing users’ entire iPhone address books on their servers and have issued a red-faced apology. (The lesser-known app Hipster committed the same sin and also offered a mea culpa.) And Facebook’s IPO has brought fresh concerns that Mark Zuckerberg will find creative new ways to leverage user data into ever more desirable revenue-generating products.
This is the way we’re private now. It’s ludicrous for anyone who loves the Internet to expect otherwise. How else are these services supposed to exist -- let alone make any money? Theft or misuse of private user data is a crime, certainly. But no social web app -- not one -- can work without intense analytics performed on the huge data sets that users provide to them voluntarily (you did read the terms of service agreement...right?).
And the issue compounds when people connect one site to another. By linking their Twitter to their Facebook to their Google+ to their Foursquare to their Zynga to their Instagram to their iOS, users are consolidating their lives, and in the process making them more attractive to marketers. While Facebook, Twitter and other services have made attempts to warn users about hitting the “connect” button, many of us hit that button with reckless abandon, without a thought of who’s slavering on the other side.
The reason social media and digital information companies want that data is because of what we refuse to give them: money. No one wants to pay for the privilege of chatting with their friends or using a coupon, and to this day, no one has to: Go ahead, ring their doorbell or pick up the free coupon book from your front stoop. But if you want to chat using Facebook or Gmail, or you want to buy a groupon for an 80 percent-off Botox service, you will have to tell those companies who you are. And those companies will use that information to tailor their offerings to you, increasing your value as a user and a customer. They will slice their data sets into a million different pieces and show those pieces to people -- advertisers -- who will pay them money for the privilege of using their service. They’ll use it to get to you.
This is an update on an old media model. Magazines and newspapers for decades could only guess at the readership of their product and the demographic of their customers. But now social and new media demand to -- and can -- know exactly who you are before they agree to let you use their free services. Even email newsletter services like the increasingly hot Thrillist -- which might innocuously start you on their service by asking only for your simple email address -- deploy click trackers, pixel trackers and other online data-gathering techniques to start to put together a picture of you as a user, both individually and in aggregate. A deceased magazine like Spy could only dream of that kind of intel.
It is utter rubbish to claim that we cannot have a better internet than the one we have right now. Most users simply do not really understand what and how much they have given up. And what has been given up unknowingly can be reclaimed. That is what laws are for.
Europe has a much better system, and much more privacy. And we can improve on that, without wrecking the essentials of the internet.
All about the Benjamins, or How Mark Zuckerberg cemented control of Facebook $100 at a time
One hundred dollars doesn’t go very far these days.
But for Facebook co-founder Mark Zuckerberg, a C-Note was the key to cementing his control over the social networking phenomenon.
As we learned last week when Facebook filed its prospectus for a $5 billion initial public offering, Zuckerberg has the voting rights to shares owned by some of Facebook’s biggest stakeholders, including venture capital firm Accel Partners, Digital Sky Technologies and former Facebook President Sean Parker.
In an amended filing on Wednesday, Facebook provided a little more color about the agreements that contributed to Zuck’s controversial control of 57 percent of the company’s voting shares.
Most intriguing was the price that Zuckerberg paid each of the various shareholders in exchange for handing him their voting rights: $100 in cash.
That’s not a typo.
One hundred bucks may seem like a pittance for such an important right. But it’s possible that the $100 payment was merely a formality, and that forfeiting voting rights to Zuckerberg was the real price of admission for (the raging horde of) investors seeking to buy into Facebook.
Facebook is starting to lose its touch
By Kevin Kelleher The opinions expressed are his own.
Facebook is steamrolling forward. It now boasts 800 million active users. The company is reportedly preparting for an initial public offering. It’s laying plans to sell a Facebook phone, strengthening its presence on the mobile web. But Facebook’s plans may be hampered by a new backlash against the company’s efforts to get its users to share more of their lives online.
In September, Facebook announced at its annual f8 developers conference that it was upgrading its Open Graph technology. Facebook CEO Mark Zuckerberg introduced Open Graph in 2010 to let web sites and apps share information about users with Facebook. The revamped Open Graph takes sharing to a new level, allowing apps that automatically share what articles users are reading or what music they’re listening to.
Zuckerberg said the new feature would allow “frictionless experiences” and “real-time serendipity.” At the time, only a few observers found them to be scary. “They are seeking out information to report about you,” wrote developer and blogger Dave Winer. But suddenly, a critical mass of critics are speaking up about the changes, how they affect users and publishers alike.
Facebook has had its share of controversies in the past. In 2007, it introduced Beacon, an early version of Open Graph that automatically opted all users into its sharing features. In time, Facebook learned to allow users to opt in. But more importantly, its site changed how its users thought about privacy online. Today, it’s a given that the web is evolving into a social landscape where sharing personal information online is increasingly common. You either learn to share, or you stay off Facebook.
The latest round of complaints have a different theme: This time, the problem is that Facebook is getting the social web wrong. One of the key reasons for Facebook’s success is that Zuckerberg didn’t try to tell its users how to use a social network. He kept things simple and made changes only when the online behavior of users dictated them. Zuckerberg believed that, in time, people would grow more comfortable sharing personal data on its site, even if they found it creepy at first.
Yet it seemed that every year Facebook again found itself in the middle of some privacy controversy, with critics charging it was getting too intrusive. Facebook kept growing, and it would return the following year with new features designed to seduce users into sharing more. In that sense, Zuckerberg was right that in time many people would share more freely.
Okay, I agree and your point is well-argued. The only problem is that the people cited here tend to be tech-elites and not your average users. I wish the trend was true but I’m just not so sure it is. The average user absolutely rebels against efforts to “herd” them in a predetermined direction (as Netflix found out, painfully) but that’s not always the case. It’s more a case of ease of use – if FB makes sharing more complicated, people will leave in droves. If it’s easy, they’ll stay despite the insane consequences that result. The jury is still out on this one, though you are right in suggesting this could be – could be – a turning point.
Tech wrap: HP spinning off PC division
Hewlett-Packard is close to a deal to buy software company Autonomy for $10 billion and will announce a long-rumored spinoff of its PC division.
Autonomy, which counts Procter & Gamble among a long list of major corporate customers that use its software to search and organize unstructured data like emails, confirmed it was in talks with HP.
Google+, which has picked up more than 25 million users since launching in June, is headed down the right path and is the first serious challenge to Facebook’s dominance.
Google’s infant social network, which counts Facebook CEO Mark Zuckerberg as a member, has met skepticism so far but some venture capitalists see reason to be optimistic.
Speaking of Facebook, the social networking giant has won access to computers, files and emails it hopes will prove an upstate New York man’s claim to own half of Zuckerberg’s stake in the company is a fraud.
At issue is the authenticity of an alleged 2003 contract under which Paul Ceglia said he hired Zuckerberg, then a Harvard University freshman, to work on StreetFax.com, a street-mapping website intended for the insurance industry.
BlackBerry maker Research In Motion is close to rolling out its own music streaming service that will work across its mobile devices.
Facebook’s new cafeteria menu
To: All Facebook Staff
Subject: New cafeteria menu
Friends,
While some of you have welcomed the new all-you-can-kill menu at the company cafeteria, our monitoring of your status updates and private messages suggests some of you would have appreciated advance warning about the changes. This update aims to clarify some of the misinformation, much of which was deliberately spread by disgruntled former employees. You might also find it helpful to study the photographs I shared with you from my Memorial Day barbecue, where I demonstrated how to turn twin cows named Tyler and Cameron* into hamburgers. Once you’re comfortable with killing your own meat I’m sure you’ll find the new cafeteria options simple, healthy and cooler than a million dollars!
BREAKFAST
D9 kicks off in style…LA style
If you can say one thing about those folks at AllThingsD, it’s that they really know how to throw a party. This year’s premier U.S. tech conference, at the swanky Terranea Resort in upscale Rancho Palos Verdes just an hour south of LA, brought out the Ferraris, CEOs and fancy gizmos in droves.
Such an event deserves a worthy schwag bag, and the folks at AllThingsD did not disappoint. This year’s trove of goodies for the 600 monied attendees included a brand-new HP Veer smartphone, a “Pogoplug” personal cloud box (for backing up content and stuff), a Disney skull-shaped decanter meant to commemorate the release of the fourth Pirates of the Caribbean, a Lenovo wireless keyboard-and-mouse.
Last but not least — a “very special” D9-logo-emblazoned hoodie meant as a tribute to D8′s now-classic onstage interview with Mark Zuckerberg, during which Kara Swisher managed to get the clearly-perspiring Facebook chieftain to doff said item.
(Photos from AllThingsD.com)
Tech wrap: iPhone 5 home for Christmas, maybe
Apple’s iPhone 5 isn’t expected to hit the market until Christmas or early next year, according to Business Insider’s Jay Yarow. Avian Securities said in a note, based on conversations with a “key component supplier” to Apple, that the the iPhone 5 should go into production in September and that Apple could also be developing a lower price/lower spec iPhone model, Yarrow writes.
The $214 billion cellphone industry is bracing for a hit to its supply of components as top phone makers get set to report quarterly earnings next week. “We believe the shortages will start to bite in the third quarter, when we’ll get a clearer picture of who is most affected,” said Ben Wood, head of research at CCS Insight.
On average analysts expect global cellphone sales volumes to have grown 10.8 percent in January-March, according to 18 analysts in a Reuters poll. The phone market has recovered from a slump in 2009, but growth is expected to have peaked in the first half of 2010, with a slowdown to 9 percent forecast for 2011, the Reuters poll showed.
Apple’s iPad will continue to dominate the surging media tablet market for years, with Google playing catch-up, Gartner said. The research firm said it expects 70 million media tablets to be sold this year and 108 million in 2012, compared with 17.6 million in 2010. Apple’s share of the market will gradually decline to 47 percent in 2015 from 69 percent this year, while Google’s share will rise to 39 percent from 20 percent now.
Apple CEO Steve Jobs will allow best-selling author Walter Isaacson, who chronicled the lives of Albert Einstein and Benjamin Franklin, to publish his biography — entitled “iSteve: The Book of Jobs”, in early 2012. Jobs, who has battled a rare form of pancreatic cancer and undertook a liver transplant in 2009, granted exclusive interviews to the biographer over the course of three years.
Cameron and Tyler Winklevoss, who accuse Mark Zuckerberg of stealing their idea for Facebook, must accept a cash and stock settlement with Facebook that had been valued at $65 million, a U.S. appeals court ruled. The twins argued the deal was unfair because Facebook hid information from them during talks.
Facebook is evaluating the Internet market in China, but has not signed a business deal with any companies there, a source familiar with the matter told Reuters. There had been media reports that the social networking giant and Internet company Baidu had formed a partnership.
Obama tech dinner photos offer fodder for Silicon Valley Kremlinologists
It’s Kremlinology day in Silicon Valley as industry-watchers pore over the details of the two photographs released by the White House of President Obama’s big dinner with the lords of the tech world.
Who sat where, who was drinking what, and what does it all signify, were among the top questions under debate the morning after the commander-in-chief and fourteen guests broke bread at the house of venture capitalist John Doerr.
If proximity to the president is the key measure of clout, then Facebook wunderkind Mark Zuckerberg and Apple CEO Steve Jobs won top honors, with both executives flanking Obama at the dinner table, as can be seen in this picture.
The White House denied press photographers access to the event, so Reuters and several other media outlets are not publishing the photos. But you can find them here.
Whether the White House’s official dinner-table photo was deliberately shot from an angle to show only Jobs’ back was a subject of speculation, coming a day after the National Enquirer published photos which seemed to show Jobs — who is currently on medical leave from Apple — outside a cancer center looking particularly frail.
Also widely noted was the fact that 26-year old Facebook founder Zuckerberg, known for a firm attachment to sporting a “hoodie” sweatshirt at all times, saw fit to don a suit for the occasion.
And what to make of Google CEO Eric Schmidt, who was seated all the way at the end of the table? Schmidt of course serves on Obama’s Council of Advisors on Science and Technology, so he may simply have thought it courteous to let others have some time with the prez.
@WeWereWallSt: Correct! And fixed.