The Praized Blog

Remember my January blog post where I came to the conclusion that Facebook was just a big game? It has been officially confirmed by a report from Flowing Data.

According to Techcrunch, “About half of the 23, 160 applications on Facebook fall into the “Just for Fun” or “Gaming” categories. “Dating” and “Chat” are also high up the list.”

(found on remarkk! blog )

Bell Canada Associate Director of Media Relations Jason Laszlo made a real boner move, boasting on Facebook of his ability to snow journalists with his network management bafflegab, referring to journalists as “lemmings” in a recent status update. Clearly a super-fun guy in real life (note colourful hat and armband tattoo), he further demonstrated the Bell Media Relations department’s apparent unfamiliarity with modern web tools by leaving his Facebook profile wide-open to the public to see. Oops. (…)

What it means: In another unfortunate situation where the assumption was that “what happens in Facebook (or other social networks) stays in Facebook”, Laszlo clearly assumed he was writing to his Facebook friends and not broadcasting to the world. Clearly, it was not the case and his message ended up reaching people outside his inner circle of friends. This should definitely be lesson for anyone working in the public eye (especially in public relations). After all, we are all becoming media through those new social media tools.

Saturday, I was reading an article in Montreal’s La Presse regarding McDonald’s entry into specialty coffee shops and how it’s a direct attack on Starbucks. I was especially intrigued by comments from Bryant Simon, a teacher at Temple University in Philadelphia. As a history teacher, he’s interested in the social phenomenon that leads us to pay a premium to belong to the Starbucks community.

Quoted in the New York Times in 2004, he said: “Starbucks has become the corner bar of the 21st century. (…) It symbolizes the hunger for community in today’s atomized world. Starbucks has tapped into people’s desire to be with other people. It’s become a new public space where people can go to be with other people. That’s the genius of the place. That’s why I resist the demonization of Starbucks. Who else is building these community spaces in America today?”

As we know, since then, Starbucks has lost its cool factor, and many of its early enthusiasts are now drinking better coffee at local places, behaving almost like wine connoisseurs. It made me thing about my “Twitter is The New Facebook” blog post, about the reasons why innovators/early adopters are very fickle and the increasing speed at which they switch brands.

(chart found here)

I believe the introduction of social tools on the web gives early adopters access to better information than they used to have before. It’s easier to find out if your peer “tribe” is adopting new products & services. And if they are, you trust that your tribe is right, you pick up your friends and you just leave (what I call “Brand Nomadism”). Combined with low switching costs online (the next site is only a click away), it creates a situation where we see the rise of many new “next-big-thing” Web properties (Facebook, Twitter, FriendFeed, SocialThing, etc.).

I was first exposed to that phenomenon when I saw a presentation by Bill Tancer from Hitwise at the Web 2.0 Expo last year. He showed the attendees the YouTube early adopter adoption curve. In it, you clearly see that it took only 4 months for YouTube to really explode on the scene.

As for Starbucks, I think they lost a lot by standardizing their product offer through the introduction of automatic coffee machines. By becoming a “middle-of-the-road” brand, they’ve basically positioned themselves in the no-man’s land between big brands like McDonalds (or Tim Hortons) and small local coffee shops, effectively being attractive to no one in particular. I believe this innovator/early adopter curve is critical to the future success of a new venture and I think that, if you want to build a sustainable long-term business, you’ll want to remember who put you in the driver seat. Make sure there’s always a place for your first customers in your strategic plan.

Yesterday afternoon at SXSW08, Steven Johnson, Outside.in’s CEO, was interviewing the brilliant Henry Jenkins, Director of the MIT Comparative Media Studies Program. I’ll come back to Jenkins’ insights in a later blog post.

Johnson, while talking about hyperlocal, collective intelligence and communities, unveiled a screenshot of a soon-to-be released feature of Outside.in called “On My Radar”. According to the sneak peek page, “On My Radar lets you zoom down and see all the current buzz on the block you’re standing on, while simultaneously keeping tabs on places around the country that interest you.” It uses Yahoo’s FireEagle location technology.

(see the bigger image here)

What it means: On My Radar is very similar to the Facebook newsfeed, one of most interesting features of the popular social network site. I like the fact that they’ve segmented the geographical elements from the very hyperlocal (within 500 feet of you) to the city-level (Brooklyn). I see two challenges to this idea: depth of content and activity. Without these two, a local newsfeed is less relevant. But if they can mine enough information (and frequent updates) from local bloggers and Outside.in users, this might be a very interesting way to discover hyperlocal news.

Back in December, in “A look back at 2007“, I wrote that I believed early adopters’ interest in Facebook had peaked and had even started to decline. Recently, the blogosphere echoed that sentiment with news of “Facebook fatigue”.

1. In January, The Register started by saying “Whisper it, but numbers from web analytics outfit comScore have confirmed what the chatter in bars and cafes has been saying for months - people are, just, well, bored of social networks.” About Facebook, they added that “behaviour seems much the same; join, accumulate dozens of semi-friends, spy on a few exes for a bit, play some Scrabulous, get bored, then get on with your life, occasionally dropping in to respond to a message or see some photos that have been posted.”
2. A few weeks later, Techcrunch also looking at ComScore data said “The number of people who visit Facebook has been leveling off over the past few months in the U.S., and even dipped by about 800,000 individuals in January. (…) Maybe all that friend spam has something to do with the decline. Will the Facebook fatigue get worse, or is this just a temporary dip?”
3. Adding his grain of salt, Rory Cellan-Jones from the BBC added: “The general feeling is that the kids, with their minute attention spans, have already tired of the social networking site and moved on to something more hip and happening. I think the opposite is true - that Facebook’s new wave of older users have decided it is just not worth the bother and are now leaving it to the kids.”

I agree. My personal experience with Facebook is that its relative utility for me has decreased drastically in the last few months. There used to be a lot of “friend” activities in my newsfeed and in my status updates. Even though I have more than 550 “friends”, I suspect that only 20% at most are using it regularly. As I wrote two months ago, Facebook is just a game. Industry pundits are looking for utility and, for a while, it certainly felt like Facebook was IT. But not anymore. Has something replaced it? Yes. Today, I’d like to say it’s Twitter. It’s all anecdotal, mind you, based on my brain filtering a massive quantity of articles and blog posts I read every day. You’ll have to trust me on this. Should you still care about Facebook? A resounding YES! As Jeremy Liew from Lightspeed Ventures Partners says “The digerati, with their Outlook address books and social network friends lists in the 1000s, bloated by people they met at conferences several years ago, are edge use cases. Their experience is atypical. Normal users of social networks use Facebook apps in the same way that middle America forwards emails to one another.” Those millions of users are not going away and Facebook is still a formidable platform to broadcast your brand and content.

But back to Twitter, what is it? Twitter is a micro-blogging application that allows you to send text messages of up to 140 characters. It really exploded on the Web scene last year at the SXSW Interactive Festival. People started using it in drove but I wasn’t sure what to do with it (and I’m sure I was not alone), until Facebook taught us how to “Twitter” through its “Status Update” feature. Along with the newsfeed, it is one of Facebook’s killer apps but I think most people found it too limited in functionality. It was really just about broadcasting information.

Twitter is much more. It can be a:

1. Broadcast tool. Send information to your network of “followers”, your latest blog post, a breaking news, a summary of a conference you’re attending, the boring stuff of your daily life, etc. Best of all, you can share clickable URLs.
2. Conversation tool. Using the @ symbol followed by the Twitter alias, you can ask questions, join an existing conversation and contribute to the community.
3. Early warning system. Breaking news seem to pop-up on Twitter much more quickly than in other media. I’ve learned about different breaking news more quickly in the last few weeks using it. Some people have already created specific channels for breaking news, which you can start following. See BreakingNewsOn or the Techmeme firehose.
4. Proxy conferences. Recently, I was able to follow updates from the TED, a very coveted invite-only conference. You could obviously follow it in real time, but through structured data standards called hashtags, you can also see what people have been reporting about TED here.
5. Subscribe to people. Where else can you follow updates and insights from industry luminaries like Pierre Omidyar (eBay’s founder) or Paul Kedrosky (famed Canadian VC)? There are hundreds of interesting people to follow in Twitter.

Howard Rheingold of SmartMobs fame offers even more reasons to like Twitter.

Twitter obviously has flaws:

1. It hasn’t announced a business model yet and people are afraid its introduction will break the utility.
2. It suffers from many well-documented technical interruptions.
3. You can’t segment your “tribes”, allowing you to improve the signal-to-noise ratio, as you start following more people.
4. Most of my (and possibly your) contacts are not on Twitter yet, which reduces its intrinsic value.
5. It’s a huge time-waster, looking at the conversation feed and making sense of it all.

But even with these flaws, I expect Twitter to really catch fire in the next few months, with more people joining, trying it out, finding utility and transforming it into a vibrant worlwide conversation-based community. Even my Praized Media partner, Sylvain, is organizing the first TwittYul, an informal event for Montreal Twitter users and fans You could read about it first … on Twitter. BTW, if you join and want to follow my “tweets”, I can be found here: http://twitter.com/Praized

To finish this week’s series on business models atomization, I’d like to address the situation where media has been completely atomized. I think that happens when individuals start becoming media themselves, broadcasting “news” through their blogs, Twitter tweets or their Facebook status updates. That concept, explored last summer in my famous “I am Media” blog post really resonated through the blogosphere. What I missed at the time was the corollary:

If I am Media, I am also Advertising.

I remember being very annoyed by the first Facebook Beacon implementations. I gave them a good scolding and wasn’t happy with the way I was depicted, becoming a “Blockbuster spokesperson”. My friend Perry challenged us to think further about these experiments. In my blog post comments, he said: “In order for them to win, urgently, they need to push the envelope on new ad product models. I think the model of stepping “meaningfully” over the line and then back gets them more forward motion.” He was right but I’m not sure the Facebook folks have learned anything yet…

Facebook Beacon is an amazing idea but it’s really badly executed. In a world where individuals can become media, Beacon could be the “AdSense for People” but it needs to be completely reversed.

Facebook should:

1. Give user control over which ad appears in their newsfeed (i.e. which brand/service you’re endorsing) and when it appears.
2. Share revenues with the user using a performance-based model.

There are obviously a couple of massive challenges with this model. The first one is Facebook does not yet have the inventory of word-of-mouth ads to make it really interesting for users. The second one is “spwom”, individuals “selling out” to brands they don’t believe in, which would be the equivalent of spam for word-of-mouth recommendations. But I believe there might come a time when recommenders get rewarded for talking about their favorite products or places…

As read on TechCrunch this morning,

MySpace is finally getting ready to pull the trigger on its long-awaited platform for developers. Starting today, programmers can sign up to register for the MySpace API program, which will go live on February 5th. The APIs will allow developers to create social applications for MySpace much like they can already for Facebook. The platform will be compatible with Google’s OpenSocial platform, meaning that applications written for OpenSocial will work on MySpace with a few minimal tweaks.

More details will come out later about what exactly the APIs will allow developers to do, but at a high level they will allow for deeper integration into MySpace than can currently be done with Flash widgets. The APIs we believe will support Flash, iFrame elements and Javascript snippets, and give developers deeper access to MySpace member profile information and their connections. Developers also will be able to make money from advertising associated with their applications.

What it means: with all the talks about Facebook in the last 6 months, we tend to forget MySpace is still a major force in the social networking world. According to this recent eMarketer article, “The site received 72% of US visits to social networks in December 2007 alone” with Facebook a distant second at 16.03%. In terms of reach, MySpace had close to 72M unique visitors in October 2007 (source: eMarketer quoting ComScore) giving the site 40% reach of the US online market (Facebook is at 18%). In November, Compete data showed that only 20% of MySpace members were also on Facebook. So, if you’re interested in reaching these 72M users, get in line to get a developer access.

Robert Scoble, who’s currently attending the Davos conference, had the chance to connect with Mark Zuckerberg, Facebook’s CEO. Among the things Zuckerberg shared:

• Localization: “they are within weeks of shipping translated versions of Facebook.”
• Application Platform: “they are working on a major overhaul of the application platform. Both to make apps less spammy and also to deliver much more functionality so more apps move beyond the viral, but pretty low feature, styles of apps.”
• Data Portability: “they are still thinking about data portability and just how that will work to both protect users as well as to encourage new kinds of applications to be built.”
• Scrabulous: “he talked to me about his love of Scrabulous and was hopeful that a good resolution will come. (…) He thinks there may be an acquisition or other good outcome to the dispute.”
• The Beacon debacle: “he admitted to me that he had made mistakes in how they implemented Beacon and explained it. Watch for him to come back with a new Beacon and a much better explanation.”

What it means: being located outside the US, I definitely sense that localization is the biggest issue facing Facebook in terms of future growth. Europe has seen the emergence of strong regional social network players because of that situation, especially in non-English speaking countries. On Scrabulous, expect Facebook themselves to buy the application (and then pay Hasbro for the license) as it is one of the stickiest app out there.

Yesterday night, portions of an interview with Sylvain Carle (Praized Media’s CTO) and myself were shown on the national news on Radio-Canada, Canada’s French public television network. We talk about Facebook and social media. You can see the results here (in French). I believe a second portion of this feature will be broadcast tonight at 6:25pm on the Montreal news.

(full disclosure: I love Scrabble and I’m a Facebook Scrabulous junkie)

A few days ago, I read with horror that Hasbro/Mattel were threatening to shut down Scrabulous, my favorite Facebook application. There was a sense of deja vu as the article was written by Josh Quittner, former editor-in-chief of Business 2.0, the magazine we tried to save last summer with a Facebook group. Quittner, showing an enormous sense of humor, titled his article “Will someone please start a Facebook group to save Scrabulous?”

Yesterday morning, we learned that the two toy companies (who co-own the rights to the Scrabble game) have decided to escalate the legal procedures to Facebook directly and ask the social network site to shut down the very popular application (more than 600,000 active users per day, 26% of the application installed base).

Flickr picture by allyrose18

Following this news, fellow Toronto blogger Matthew Ingram wrote a mordant blog post called “Hasbro and Mattel: Dumb, dumb, dumb“. In it, Ingram writes “From a legal perspective, Hasbro and Mattel are no doubt totally within their rights to have the app removed, or to sue, or do whatever they wish to protect their trademark. But from a marketing perspective I think they are missing the point.”

He’s right. Between the cottage and our home, my family owns four versions of Scrabble (two Deluxe and two travel versions). We want to play the game offline and online but unfortunately Hasbro/Mattel haven’t built one for us within Facebook, where our network of friends currently “resides”. Scrabulous is the only solid alternative. It reminds me of the way the music industry threatens the largest consumers of music, the peer-to-peer network users, by calling them thieves and suing them (a study published late last year showed that P2P downloaders buy more music). Great way to treat your most important customer base…

From a marketing point of view, Hasbro/Mattel could have gone through different routes. Ingram suggested: “So why not just buy the app from the developers for a couple of hundred grand and call it a day?” Attaboy commenting on Ingram’s post proposed: ” they should be demanding that Scrabulous pay a license or share their revenues, not demanding that it be shut down.” I add that shutting down Scrabulous will only serve to anger your biggest Scrabble fans. The big lesson for corporations is: fill consumers’ needs or it will be filled by others, and you might end up looking like bad guys.