Sunday, March 20, 2011

Facebook Wants to Eat Everybody's Lunch... And Vice Versa

Apparently we're verging on a world in which everybody is on AOL and, as websites are difficult to make, everybody is making free pages on Geocities. Or something like that.
My nephew’s wife was frustrated. The “easy-to-use” site-builder software she was using to make the church camp website with was any but. To make matters worse, their “free” hosting service came with a price—banner ads that randomly appeared on the site....

So in desperation, she turned to her Facebook friends to ask if anyone knew of a free and easy-to-use website builder—one without ads. A well-meaning friend [suggested Facebook and] even offered to set the page up for her.
The author perceives a battle for the future between Facebook and Google, with Facebook trying to bring everybody onto its servers, using its platform and programs for most or all of their online needs, and that they will leverage the information they glean about their users to offer a network of targeted ads that will compete with Google's AdWords and AdSense.
Is Google nervous? You bet they are. And here’s why. When you search using Google, all they know about you is your IP address, so all Google can tell that website owner is: “The seven people who visited your website were from Ohio.”

But Facebook can say: “Here are the names of the people that ‘liked’ your content, how old they are, what college they went to, what music they listen to, what books they read, how many children they have, who their other friends are …” It’s a marketer’s dream! Think Google isn’t nervous? Think again.
In reality, Google has a lot more information than that to work with - thanks to cookies and web beacons in its ads, unless you've opted out, it knows many of the sites you've visited. If you use Gmail it knows your contacts (and is pretty capable at figuring out which are important). If you surf while logged into your Google account, it knows even more. Google's efforts at social networking have faltered, but they're not about to give up. If they can't find a way to take the traffic away from Facebook, expect them to focus on ways to take the profit out of Facebook. Seriously. And while Facebook has a lot of members, let's not pretend that it has current or meaningful information about the majority of them that would allow the type of granularity and accuracy in ad targeting that this type of article suggests.

And speaking of those profits, there are a couple of huge companies that deserve mention. The Gates Foundation is developing mini social networks for college communities - via a Facebook app that presumably will ultimately work on competitors' social networks, or perhaps as a stand-alone on your (Microsoft OS-powered) cell phone or tablet.

And while Apple's logo may have a bite out of it, don't get the wrong idea. It would just as soon reduce Facebook to app status - and take a 30% cut of any Facebook dollars you buy through the app. That may sound a lot like the 30% Facebook wants to take from companies that use its platform, and in many ways it is - except Apple is happy to let you pay in cash. You don't have to buy "Apple dollars" to get what you want through an App, although you can bank credit in your iTunes account, and can send your friends iTunes gift certificates. And with its push toward licensing software by the user instead of by the Machine, Apple is paving the way toward your being able to have your favorite app at your fingertips, no matter what device you're on, and if that app would benefit from having some files stored on your device that's easily (and invisibly) achieved. Facebook has lots of eyeballs, but if they can distribute it as widely Apple has a better platform. Apple also has lots of verified, individualized information about its customers, and already owns an ad platform and network.

Then, of course, there's "the next big thing". The company you presently underestimate or haven't yet heard of, or which may not even exist, that could be "the next big thing" a few years from now.

Yes, web apps are going to significantly transform the world wide web as we know it, and a lot of content that is presently available for free will be shifted into web apps. A lot of information that is presently difficult to monetize is also likely to end up incorporated into web apps with some form of fee or advertising attached. And you'll probably need a web app to determine what web apps you need - and that a handful of web apps become dominant, even if they're simply containers that help you manage and use other web apps. That won't kill off the web - it's likely to transform the web, and make some parts of it better and other parts of it worse (or should I say "less useful").

At this point I'm still not willing to jump on the "Facebook will rule the world" bandwagon, despite its potential (and the descriptions of various vaporware projects that could help it become dominant), nor am I willing to write off its potential. To the extent that Google is "nervous", it should be - and not just because of Facebook - but Google's a lot like Microsoft, and it can survive decades of (at this point imagined) bad business decisions, emergence of fierce competitors, and (again, imagined) decline.

Frankly, given how the Internet is transforming our lives and jobs, you and I should probably be a lot more nervous about the future than Google. There are lots of powerful interests that will be happy to eat our lunch, and individual people are not well-positioned to push back.

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