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It all comes back to this little flick!
Part #1- http://www.youtube.com/watch?v=ExBE651_vOY
Part #2- http://www.youtube.com/watch?v=kx7HDTDDopA
$3 revenue per user. But I think they are profitable on $1.5B rev now. FB was definitely in the honeymoon phase for most users. When you first get on, you have a flurry of activity posting and reconnecting w/ friends/colleagues, after that period of a few months, activity slows to a trickle, unless you are one of those who plays the look at me, hot or not, daily multiple posts for attention to fill some void in yourself.
FB does have long term sticky potential to be a communication platform for sure. The value of FB is most everyone else is on it. Your immediate sphere of contacts are very influential. It's a matter of FB keeping it relevant and useful while monetizing. FB is the bridge and collects a toll on traffic.
FB can take a big dent out of email use and thus evites of the world go poof. Look at the success of Open Table, that could go bye bye real easy by a free or low cost app. Lots of opportunity to leverage the platform.
The power of FB having a huge base now is they are leveraging their "login" power. That is very important as more sites will let you log in using your facebook account. People hate maintaining multiple log ins on various sites. I forget my different logins/pw all the time, except now, I use fingerprint login tech.
FB has also done what no other online platform has done. People are using their real names. That is valuable to advertisers, and also operationally reduces cost for FB of having tons of people monitoring the BS people post when they assume some anonymous online ID.
Myspace was too narrowly focused on music and didn't change quickly enough. Friendster, never did try that one. Classmates.com was prob one of the first major social sites but they were too blind trying to freemium upcharge you they missed the forest thru the trees.
<< When you first get on, you have a flurry of activity posting and reconnecting w/ friends/colleagues, after that period of a few months, activity slows to a trickle, unless you are one of those who plays the look at me, hot or not, daily multiple posts for attention to fill some void in yourself. >>
The Facebook machine must keep attracting more "users" to replace those who fall away, in order to sustain itself...in essence, a social Ponzi site. However, now with a reported 500 million user accounts, it would seem that virtually everyone who wants to be a "FBer" is already one; the Giant Squid has picked this top in exquisite fashion.
Well, that is true if they cannot deliver value to folks who get past the first few months of connecting etc... As I posted above there are plenty of opportunities to take advantage of owning the FB platform and collecting tolls.
I mentioned Open Table, why the heck isn't this a free app on FB or mobile apps or on google? Hats off to OT for making a nice profitable biz out of it, nearly 2 Billion market cap.
Nice piece, Chris -
The hype about FB reminds me of a ginormous version of the brouhaha around Skype when it was still a privately-held company: Large, fast-growing user base, "this could be the next big thing", etc. But the very things about the business which allow the portal to quickly attract a huge user base (in Skype`s case, free or nearly-free long-distance telephony and chat) make it hard to monetize. With Skype, eBay found that out the hard way.
Your analysis seems spot on!
Certain 'inventions' will inevitably arise given the development of the landscape that makes them possible. They are emergent properties of the new landscape.
The casual peer-to-peer networking offered by Facebook is one such form.
Like with search before once a certain tipover point is reached concentration becomes self-reinforcing. Alta-vista may have been first in that field... but Google got the prize.
So it is with Facebook post MySpace. A tipover point may have been reached. But I wouldn't count on it.
Its future may be aborted after achieving wide penetration but only marginal utility. There is nothing other than inertia (all my friends are here)... and a few games I understand are popular with some to keep their numbers up.
Because while Facebook is currently dominant, it doesn't address the requirements for deep peer-to-peer association. It doesn't understand its roots in proximity and capability... in other words it doesn't really help people accomplish anything much with others.
And tragically, sometimes missed potentials of new technologies are not regained.
Example from the past: Television! Which because of cultural inertia adheres to patterns laid down by the first players. Those patterns become extremely difficult to dislodge. The INERTIA of the implementation becomes impossible to shake even when obviously faulty.
[For my 61 years people have been pointing out (and its scarcely disputable) that the public airwaves could make campaigning a lot cheaper... and candidacy available to more than just 'pre-approved' candidates. Yet media costs and the money quest continues to be a thorn in the side of honest politics and good governance. And while I'm a real supporter of enterprise... what effect has a 24/7 TV emphasis on Brands (myth-building) and lowest-common-denominator marketing (lizard-brain appeals) had on the culture? I wonder who's interest THAT serves?]
Facebook and other such sites are trying to bridge a longstanding gap as ICT quickly goes global. In evolutionary terms its essentially instantaneous:
There is a FUNDAMENTAL SCALING ISSUE IN HUMAN SOCIETIES associated with NATURAL HUMAN COMMUNITY SIZE (Dunbar’s Number), THE ALTRUISM PROBLEM* (there’s a problematic discontinuity between biological and intellectual altruism) AND COGNITIVE LIMITS (the attention economy).
In short... our personal networks are smaller than the social organism of which we are a part. This presents potentially fatal problems in large group decision making. (But its out of this realization that pragmatic approaches to solution can be found.) Social Networks &
The Social Organism: Healing the Breach http://culturalengineer.blogspot.com/2009/05/social-networks-social-orga...
THE DEVELOPMENT OF THE WEB IS THE MOST FUNDAMENTAL CHANGE IN PEER-TO-PEER RELATIONSHIP SINCE THE MOVE TO SETTLED EXISTENCE!
What COULD form a root function for a STABLE peer-to-peer network with broad-based persistant utility?
A very abbreviated logic chain for a possibility:
1. There’s potential in the political microtransaction for networked citizen lobbying if it can be harnessed.
2. Problem is the cost and hassle of the microtransaction.
3. This problem is solved by system similar to x-box points (which is how they handle microtransaction issue for certain system content).
4. Additional problem is catalyzing the network
5. Addition of charitable potentials solves this for a variety of reasons related to system monetization and a more general user-utility
6. Patent has been approved for this mechanism.
7. There are theoretical reasons for need for such a system but points 1-6 above are about a PRAGMATIC implementation.
8. Should any of the points above be in doubt (which is reasonable) ask a question.
LinkedIn http://www.linkedin.com/in/culturalengineer Political Fundraising: Act Blue,
Facebook and the Missing Network Imperative http://culturalengineer.blogspot.com/2010/08/political-fundraising-act-b...
Capability ENABLES Responsibility http://culturalengineer.blogspot.com/2008/10/capability-enables-responsi...
Fixing the Political Relationship http://www.youtube.com/watch?v=S5qxJDnwXAU
The Commons-dedicated Account System: A self-supporting , Commons-owned neutral network of accounts for both political and charitable monetary contribution… which for fundamental reasons of scale must allow a viable micro-transaction. Such a network ideally should maintain its own cloud and bank. Accounts may be created and/or maintained with zero balances and/or only momentary balances during a pass-through transfer (monetization model requires no burden on the actual transaction.) P.S. Don't know about you... but the idea of the dominant peer-to-peer network(s) containing personal information being 'owned' by anyone (let alone GS, their wealthiest clients or Russian investors) makes me nervous.
Solid analysis, from 1929 historical example to GS strategy to end run SEC. Monetizing the beast has always been a critical issue and it's puke on Time's Man of the Year. I have an FB account that was hacked before Xmas. The "hacker" sent an e-mail to all of my connnections hyping "free" iPads. My skeptical mind suggested that although it's doubtful FB would be doing something like this now, the pressure on managers to generate revenue in a public company would make this type of activity irresistable.
My company collectively made the decision to relegate 40% of our entire 2010 advertising budget to "social" sites. We had internal staff that were real pros with many years of experience tying commercials and ads to "social", including blogs, tweets, ppc, ppv, page viewing times, 800 number caller tracking, and constant pr releases. Bottom line, FB produced fewer clients with less interest than any other venue. Compare it to giving away a free pizza if you fill out a quickie, 5 space application for a mortgage. People didn't want a mortgage, just the free pizza. FB is just that, extremely low price point with extremely low interest. The net value is actually negative when considering the time spent.
"Brilliant", "superlative", "smartest guys in the room." When will this fatuous public fellation of Goldman ever end? They put on their trousers on one tentacle at a time. And Facebook? Please, it's the CB radio of our generation. 10-4, good buddy. And remember what happened to Narcissus.
"Brilliant", "superlative", "smartest guys in the room." When will the fatuous public fellation of Goldman ever end? They put on their trousers on one tentacle at a time. And Facebook? Please, it's the CB radio of our time. 10-4, good buddy. And remember what happened to Narcissus.
Facebook calls to mind another techno hype love object which hit its own high water mark over a half-decade ago: MySpace. Even Rupert Murdoch, at the time, was sold on its "staying power," so much so, News Corp bought the Bush-Era social networking portal for $580 million in 2005...it has been all downhill ever since.
Before MySpace, there was AOL...AOL's model supplanted CompuServe..."social" sites, by their very nature -- as human nature, given to whim, underpins their sandy foundations -- will always be fleeting in popularity.
Too many immediacy values with too high sums in the impact, duration, and tension levels to ignore so had to stop work to extract and post the update below. Rest of the report better not be like this or it will take forever....
Extract from upcoming Shape Report: Markets entity:
As 2010 fades rapidly from sight, and mind, we note that the Markets entity is pretty much as its primary supporting descriptors would have it, a [basket (of) crises]. The [basket-case markets] set has secondary support coming from [interwoven] and [inextricably twined] which are themselves both supported at their primary levels by [bad foods] which, given its supporting sets, we are interpreting as [indigestible products]. These [indigestible (financial) products] are about to make [minions (within markets)] go into [spasms] of [violent puking]. This is indicated to be a [planet wide] level event, that in its turn brings [international grievances] and [inter country tensions] to a [visible] and [frightening] level that will be described (in the msm propaganda press) as being a [boil over] situation. The interpretation that we have about the [indigestible products] is that they fall into the category of [derivatives] in general, but specifically there are linguistics around the idea of a [gold price tied/bound] form of [derivative] that [fails] in an [instant] due to a [crisis] in the [gold/precious metals market]. This forecast is based on a lot of immediacy data value sets and so may be within days of happening, and likely will be occurring by the time that this Shape report is published.
January 11, 2011
gs should be ripping off the muslims instead of the russians.
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