Why Facebook Connect Matters & Why It Will Win

83 thoughts on “Why Facebook Connect Matters & Why It Will Win”

  1. Insightful, though I believe Facebook has enough information about its users just from crunching the actions we take within Facebook.

    We join groups, friend with people who fill their profile with things they like. Facebook is doing a fantastic job with the NewsFeed, which already shows that they can ‘target’ pretty well, heck they need not do anything special.

    Imagine measuring ads on control-groups and expanding them based on user clusters with highest CPM, etc. These are the sort of algorithms that don’t even need to know the actual topic/subject, they just do the math and cross it with the social graph.

    What’s more interesting with FriendConnect is how this weighs against things like OpenID. And, like you suggested, lets see some more exciting use-cases for the external site integrations.

  2. i agree, this is better. there seems to be a clearer direction – as opposed previously shamelessly skewering eyeballs cuz you’re the best social utility in town (for the moment).

    (obv), how it’s all executed will be vital. fundamentally, getting the ‘granularity’ part is crucial.

    ahem **clears thoat** and finally. Mr Zuckerberg – the direction you’re heading in requires you to be more open…
    **coughs** Not just “philosophically aligned”.

    clearly getting in smart people has helped.

    good luck.

  3. It always bothers me when technologies are launched with the positioning that the primary benefit is to the vendor rather than to the user. Google has, IMHO, done a good job of keeping the message, if not the tech, focused on user benefits.

    Yes, this is from a developer conference and no, I wasn’t there, but from your description, Om, the benefits to the user seem pretty marginal (now with your choice of logins!). Even worse, Colin Ferrell has to wipe the spit off before we’ll trust him again (and thanks for that image).

  4. Well for starters, Colin Farrell is a much more complex actor than Clooney (who no doubt would agree), so now I am interested in hearing ‘Mark Zuccerat (PackRat nom de plume)in person.

    But I find it interesting that no one references the Firefox feature Ad Block Plus. A few wisps of this or that, without graphics, may catch my periphery; otherwise I am alone….with my FB pals. Their word-of-mouth is the only advertising I am interested in.

  5. “we are open and we want you to share” = “we really want everyone using facebook so we can control every transaction”

  6. Not sure if this crossed Mark’s mind:
    Using FC, Facebook can infact enter into areas outside the US, where FB is not so popular (eg. India and China).

    Once FC opens itself up to other social networking sites in these regions, Mark might see a good influx of registrations into FB, thus allowing them to gain a foothold outside North America.

    But Om’s interpretation of this appears to bring out the long term monetization benefits using other social networks, anywhere in the world.

    I guess a year from now, we can come back and update this post with real life examples.

  7. I strongly disagree that Facebook Connect will be a cash cow. The key difference towards Google is still intention. When I use Google, I’m showing my intentions here and now, and an ad might even be useful. When I’m on Facebook or another social service, you may know a lot about me, but I’m not in a buying mood and thus doesn’t pay attention to ads.

  8. So much for Open ID, people are not as concerned as we would hope about their privacy, or what FB wants with our top ten friends & political affiliations, next it will be our credit card transactions. Time to delete my FB profile is nigh.

    Just like Beacon stepped over a few lines, and a few more toes – a few years before FB there was a concept called MATRIX which also received funding from the IAO. (We stumbled across this when doing a Matrix Search on Google). Ironically it got shut down due to serious public concerns that it invaded privacy. A few years later pops up friendly little FaceBook, amongst a now maturing Social Networking Market. Now our privacy can be handed over without hesitation, through a less intimidating ‘harmless’ interface.

    So much power in one place seems a little disconcerting. Shame the other Social Networks don’t clean up their act. Our lack of choice is a serious problem. Social Networking has yet to be reborn with consideration of more interesting use case scenarios for sure. Many scenarios exist that one generic greedy platform will not cater for. Not everyone wants to throw sheep at each other and tell some stranger in the CIA/IAO who his family and favourite friends are.

    Big Brother is not watching, he is digging, analysing, crunching and powering the all seeing eye which quite frighteningly sits on your dollar bill. God Bless America.

  9. What happened to OPEN ID?! This is a nice way for FB to OPEN… , and us, their two fingers. As a wise Englishmen once said – lovely jubbly.

  10. Is this FC thing really what the mainstream users (not companies or developers) have been waiting for? I can’t help, but everything I read that includes “cash machine like Google AdWords/AdSense” makes me sceptical. It’s hard to come close to AdWords in terms of low barrier simplicity and value of service. My mom clicks on AdWords when she searches for something, but she doesn’t login with her Facebook account in order to digg something..

  11. “I would say the comparison would be as exaggerated as equating the thespian abilities of Colin Ferrell with those of George Clooney.”

    Seriously, this is the best analogy you could muster? Clooney is the greatest actor ever and Ferrell is the worst? I guess I won’t be asking you for any movie recommendations. Because that keynote proved that Jobs is the best at the game, and Zuckerberg is one of the worst, far worse than Gates… maybe even that Sony guy from that Apple keynote a while back.

  12. Oh, and am I just dense or did I miss the part that explains why it will win instead of merely what it is and what Facebook hopes it will do for them?

  13. There is one main difference that springs to mind when comparing Google to Facebook. Google I trust, Facebook I don’t.

    This is yet another step by FB to eventually take over the social web (dollar signs in eyes). They don’t seem to care about their users the way they should, and each time they unveil a new system like this it becomes more apparent.

    FriendConnect, IMO, is about FB raking in all the chips and leaving none for the rest…not about creating a better web, a better environment for their users, and it certainly doesn’t have the best interests of data portability in mind.

    C’mon, Facebook, grow a pair and throw a little coin down to us peasants by at least offering OpenID!

  14. Wow, that’s an impressive brain. What database and analytics software are they using?

  15. I trust FB but I am skeptical about the AdWords comparison as well for the same ‘intent’ reason. I am more scared however about the whole Orwellian nature of this.

    As for those who don’t like that FB is not trying to create a better web, etc. Microsoft never had users interest at heart and look how well they did. FB seems to be following the MS playbook to a ‘t’ (maybe that investment was more than just money – it brought a philosophy).

    FB clearly wants to be the “social operating system” of the web – scary if you ask me.

    *sheepishly goes back to posting stories on Facebook and writing notes

  16. gee Om… you trying to take away my mantle as Biggest Facebook Fanboy? πŸ˜‰

    don’t know if i agree tho — Facebook Connect is going to be a big winner, but unclear yet if they’ll dominate single sign-on or simply lead the way for others to follow.

    on the other hand, just wait until you see what the combination of Facebook Connect and Facebook Payments will bring.

    it’s Hailstorm 2.0 all over again.
    http://500hats.typepad.com/500blogs/2008/03/web-30-isnt-the.html

  17. @rick, you are right about that. its about messaging and perception. Google has done a better job there. On the Collin Farrell image, well glad I could help πŸ˜‰

    @sv…. sorry, didn’t realize you were a Farrell fan, but the point you make about “word of mouth” is pretty interesting.

    @allen stern …. bing, bing, bing

    @Mads Kristensen it be one leg of a three legged table for sure, if not the main trunk.

    @Tim F. So you couldn’t tell I just watched Syria and Miami Vice back to back πŸ˜‰

  18. Ultimately, no matter how relevant the ad is, this does not increase the user’s conscious or sub-conscious ignorance of banner ads. And that remains the biggest problem the Media and Advertising companies need to solve.

  19. @magnusdopus very true, but there are some messages that do register and influence us. The ignorance of banner ads is pretty interesting …. i agree there needs to be much bigger changes

  20. the privacy and confidentiality of information on facebook is being abused and that’s the bottom line. i not only find the ad’s and spam intrusive but also the fake profiles that have been created and increase cyberbullying. i was looking for another site that controlled this and monitored it and all i came up with is humanbook.com i’m still unsure of it because facebook has always been my social networking site, but with all of these changes i might just have to move to humanbook

  21. Om,
    Great to see you in the comments section πŸ™‚ Nice engagement and self expression – I think that I read that wasn’t happening anymore πŸ™‚

    Loved this line from your story –

    Each service adds a few more data points about you inside the Facebook brain, which is quite aware of your activities inside the Facebook ecosystem. The brain can then crunch all that information and build a fairly accurate image of who you are, what you like and what might interest you. With all that information at its disposal, Facebook can build a fairly large cash register.

    In my view Facebook is land grabing the presence component of what is looking to be a paradigm shift that will disrupt the emerging Unified Communciations sector (covered by us at BroadDev.com).

  22. Hey Om! Great article. Thanks for the kind words, we really appreciate it. One thing we wanted to mention though is that full technical details of Facebook Connect are available here:

    http://developers.facebook.com/fbconnect.php

    This includes full documentation, a working sample site, and sample code. We’re excited to see what developers can do with Facebook Connect. And, are excited to be working alongside everyone in these early days of the movement to make the web more open and social.

    (PS. We’d love to see GigaOm with Facebook Connect integration πŸ™‚ )

  23. The lack of buying intent on Facebook is a strong argument against Facebook Connect being a cash cow. So Facebook should connect (forgive the pun) with websites on which users do show their intentions. There is talk of a enabling users to initiate MS Live Search queries from within FB but I say instead of that, enable MS Live Search users to turn unresolved search queries into questions for their FB friends or the FB network as a whole. Like I have blogged before, this would significantly increase the viral coefficient of search which on Google is zero at the moment.

    Look out also for Q&A sites scrambling to add FB Connect for the same purpose.

    By the way, as Dave McClure above states, FB Connect and FB Payments could yet be the killer combo.

  24. “Oh, and am I just dense or did I miss the part that explains why it will win instead of merely what it is and what Facebook hopes it will do for them?”

    hummm yes-i wondered this too-good thought.

  25. @Tim F – lol ditto here on the actors comparison… George Clooney does not even have an oscar in the best actor category, yet…

    @Om Malik – You mean Syriana not Syria … and there is plenty of documentation available on how FB connect works “technically” for a while now…

    @niro well said, I like the friendfeed model too, non-intrusive feed aggregation and sharing.

  26. What we’re talking about here is marketing’s new holy grail, Return On Engagement (ROE). And companies already pay handsomely for the various pieces of information that they receive from multiple vendors (one example is below). The “cash cow” for FB may well lie in the marketing research capabilities that FB can provide to advertisers. Currently there is a pool of companies that provide various pieces of the engagement puzzle from classic web analytics providers like Google and Omniture, to brand monitoring services like Biz360, BrandIntel, etc. However, no one company has mastered all of these areas. FB, or whomever masters the holistic measurement of engagement , may well replace Nielsen and many other research shops.

    For example, NBC Universal spends over $100MM annually on Nielsen research. That’s 1 of the 4 majors. This leaves out all the agencies that buy advertising space, as well as the brands from Coke to Unilever that rely on research, all of whom would benefit and therefore be willing to pay for the 1, 2 combo of quantitative and qualitiative research. Moreover, all of this information would not only emanate from one source, but one source that represents a much larger sample population (and hence higher accuracy) than ever before possible. The financial implications are significant. In fact, there’s probably room to share that space in the vendor marketplace.

    For more information about Return On Engagement (ROE) see, “Marketing’s Key New Metric: Engagement” Forrester Research, August 8, 2007. Additionally, there’s a four part series out right now by Forrester on this same subject (and no, I don’t work for them).

    Oh, and OM, why will FB win – seems to me that Google, MySpace, and others have some pretty smart people working for them too…

  27. knowing a lot about someone (by piecing through bits and pieces) doesnt change the MODE the person is in when they interact with FB or its partner sites. Mode or INTENTION is key – when i go to FB, i am going there in a very different (and usually trivial) mode – my INTENTION is just to connect with some friends (which anyways has become a chore because of the tons of feed data that one has to sift through before). Not to Search or SEE ADS.

    So yeah, FB can increase its Ad display rate and increase revenue through impressions. But it will not translate into increased CTR.

    And Ads displayed when no INTENTION exists, are just spam.

  28. Om,

    While your initial post is insightful, I disagree with your notion that FC will primarily make money by better ad targeting through more profile information. I have done significant advertising as an advertiser, and FB already has enough detailed information to reach almost any kind of audience profile that you are looking for as an advertiser.

    The big problem is that online, as in other mediums, users continue to ignore ads. This is especially true in social networks given the high PV / Visit ratio.

    Google got around this problem by showing relevant ads WHEN and WHERE people were looking for a particular something. This was a great and natural extension of Google’s main product: search. If you were searching for X, or on a site about X, Google would show you ads related to X.

    Search is not Facebook’s forte. The social graph is. So how can Facebook use what it has to get people to care about ads?

    The answer is almost wickedly simple: through friends and friends-of-friends. I will care about an ad for X if I’m interested in X at THAT time (Google search) or in that location (Google Adsense), or if my friends and trusted connections care about it (Facebook). Nobody else on the internet can tell me what my friends are interested in, what new products they are trying, or new services they are using. Facebook Connect will be able to do that.

    FC will make money by getting me to care about the “ads” and charging advertisers premium rates for higher CTRs and better converting traffic. This works because of the social graph, NOT because FB has 5 new pieces of information about my profile.

    Think about the following example: I have 649 friends on Facebook. If I buy a new video game for my Xbox360, and that information shows up in the feed for my 649 friends, the chances for them to click-through and buy the same game are much higher than if you took the same ad and showed it to 649 random users on the Internet. The CTR these days on SNS are abysmal – 0.01 – 0.1% on average. If even 1 of my 649 friends clicks on the video game link to learn more, FB has just outperformed the entire SNS ad sector by 3x – 10x. THAT is game-changing.

  29. Let’s wait and see who else adopts it. I think it is stupid and fool hardy for many of these sites to allow themselves to be leveraged to this extent by facebook. Because just like M$, facebook can steal their clients in the long run. Allow your identity to be tied to facebook as the primary provider is a big mistake, because it’s equivalent to what M$ was attempting to do with their proprietary ID scheme a few years back before everyone pretty much said no to them. So the idea is sound, but only for facebook. Companies playing along with it are fools, and in the long run will pay for their foolishness — but they are probably hoping to cash out before then.

  30. Om, of course relevance of Facebook Ads increases response. That comment was a little mis placed.

    Seems to me that Facebook is trying to embed itself into content. This is a wise move given that Facebook is becoming the new email to people. Although email advertising is big business (arguably not relative to other industries though), being able to monetise content offers far greater scale and is more where the company’s vision seems to be heading.