Facebook is buying Friendfeed for an undisclosed amount of money. Mountain View, Calif.-based FriendFeed was started by co-founders Paul Buchheit, Bret Taylor and Sanjeev Singh, all ex-Googlers, and raised $5 million in Series A funding from Benchmark Capital and its founders. Facebook is said to have paid over $50 million for the company – $15 million in cash and rest in stock. The question is, why does Facebook want Friendfeed?
No, this deal is not about Twitter. It is about Google — to be more precise: Google vs. Facebook.
The Problem of Plenty
The impetus behind the deal is twofold: our ability to publish more and more information in real time and the resulting explosion of data on the web. These two trends will soon make it nearly impossible to deal with the resulting information overload. I call this the problem of plenty. As a result, the current seek-search-consume popularized by Google will eventually hit its outer limits — and when that happens, Facebook wants to step in and take the leadership baton.
As I have written in the past, content creation, distribution and consumption are amid a sea change. Whether it’s photos, videos, tweets, status updates or whatever…the content is getting constantly atomized. In order to consume it all, we need to find smarter tools for content consumption. FriendFeed is one of them. “It’s a Facebook news feed for the whole web,” Liz Gannes wrote in her initial profile of FriendFeed in 2007.
| WHAT THE WEB IS SAYING: |
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| Louis Gray: So what’s happening to this Valley? Is it as dire a situation as it sometimes seems? Are we really going to end up with four mega-companies: FaceBook, Google, Microsoft and Apple? Because if Google or Microsoft can weasel their way into acquiring Twitter, that’s sure how it will seem. |
| CNET: Basically, FriendFeed has been coasting on a lot of hype and not a lot of mainstream recognition, and it’s not a bit surprising that it would be seeking an exit at this point. So the real story here is that Facebook made the rather expensive hire (and we don’t know the terms of the deal) of some very talented former Googlers. |
| Paid Content: Facebook has hinted in the past that it was interested in making an acquisition. In raising $200 million from Russian investor Digital Sky Technologies in late May, CEO Mark Zuckerberg said the new cash opened the possibility of “strategic options.” And Facebook also reportedly made a bid for Twitter last fall. |
| ZDNet: It shouldn’t come as a major surprise that these two companies would join forces. After all, there’s a lot of overlap between the two, though FriendFeed is one-up on Facebook with the real-time updates, compared to the Facebook updates that need to be refreshed. And really, how many friend update services do we really need? |
| AllThingsD: It is a logical fit for the huge social networking site, which has lagged behind microblogging kingpin, Twitter, in the real-time news, search and status game of perception in Silicon Valley. |
| Search Engine Watch: The implications for search could be big. Facebook has been testing search for its live feed. This is most obviously an attempt to compete with Twitter, but the FriendFeed acquisition could be a game-changer. |
“Can we take the whole web and sort of project it through your social network?” co-founder Bret taylor told Liz. Well, that is precisely what they are doing with this merger. Facebook was initially trying to make a go with its own news feed, but got distracted by founder Mark Zuckerberg’s fascination with Twitter.
Smart Move
However, by acquiring FriendFeed, Facebook has course-corrected. If you look at the rapidity with which many of us are uploading information on Facebook — 1 billion photos a month, a billion pieces of content shared every week, 30 status updates a day — you know that the problem of plenty is only going to get worse.
The good news is that Facebook bought a solid team to solve this problem. This is no different than its decision to buy Parakey, the company started by Blake Ross and Joe Hewitt. Hewitt has been the driving force behind Facebook’s iPhone efforts. You can expect a repeat with FriendFeed — though the FriendFeed founders’ pedigrees will make a difference on the org chart.
If Facebook had consummated a proposed deal with Twitter, it would have gotten a lot of eyeballs and presence on the open real-time web. And it would have cost about $500 million in Zuck Bucks! With FriendFeed, Facebook gets access to the Twitter universe and a talented team made of programming all-stars. Buchheit invented Gmail, while Taylor helped build Google Maps.
FriendFeed’s unique ability is to foster conversations — not a massive user base. If Facebook can take this capacity to “converse” and marry it to its mobile clients, what the company will have on its hands is a true interaction platform, befitting today’s always-connected life. This will give it a further boost against Twitter, a small, but fast-growing, micro-messaging company.
“We really didn’t have any need to sell the company, but we were talking to (Facebook), and we saw we had a similar vision,” Buchheit said. Despite being a generously funded company, FriendFeed has remained an insider curiosity, failing to catch the imagination of mainstream users. In comparison, Facebook is a household name, and rival Twitter is on its way. FriendFeed has been challenged by its ability to engage average users.
It Is About the People
After many attempts, I had to give up on FriendFeed, despite being impressed by the technology the company had built. This deal gives the FriendFeed team (and technology) a much bigger stage. Buchheit wasn’t shy about the fact that together the two companies can actually become a force in the emerging world of real-time information.
FriendFeed has built a real-time information aggregation platform that is impressive, to say the least. Facebook’s news stream will benefit from FriendFeed’s real-time expertise. When I asked Buchheit about the likelihood of this happening, he and Mike Schroepfer, Facebook’s vice president of engineering, declined to comment on the specific product plans. For now, FriendFeed is going to exist as a stand-alone entity.
The FriendFeed team — ex-Google programming rock stars — just out-executed Facebook and kept launching new features at a breathtaking pace. “We have been longtime fans of Friendfeed and their product innovation,” said Schroepfer. “For us, the draw was the team and their ability to build faster than anyone else.”
Frankly, for Facebook, after having copied so many of FriendFeed’s features, buying it was the right thing to do.
good buy
I wonder if this is a talent acquisition, rather than a technological one…
Prima facie, good buy for Friendfeed (and also for its 4 founders) and also not to mention Facebook who has a different way (if at all) to cut away Twitter – but looking at larger picture, I doubt its good for users like us!
I am not sure what you mean by not good for users like us. Can you elaborate.
Isn’t it just simple from the FB press release that they have bought the people i.e. 12 FF guys and not the product par se. Infact, I won’t be surprised if Facebook eventually takes FF to deadpool!
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@Sampad
this is could just give an edge to facebook in the real time game vs twitter!
Certainly seems like the talent plays a bit part of acquisition- they got an all-start cast of Google émigré in the deal.
However, I’d say it has more to do with Facebooks obvious Twitter obsession. They tried to buy Twitter, but couldn’t. So, FriendFeed is the second best thing. They’ve already “borrowed” many of FriendFeeds best features, meaning they probably didn’t *need* to buy the company. It seems like this purchase is almost a public acknowledgment that they’re ready to promote social network syndication to the front and center, rather than hidden (or as an unofficial Facebook app) as it always has been.
My biggest problem with this acquisition is that it seems to be at odds with a rumor (“Facebook to ‘Undo’ Twitter-like Homepage”) Mashable reported on a few months ago (http://mashable.com/2009/06/12/facebook-homepage-changes/)
From the article: “Why the change? Well, it turns out a lot of Facebook’s 200 million users aren’t like us – keeping the site open constantly or watching updates stream in real-time through a desktop client like TweetDeck (TweetDeck) or Seesmic Desktop (Seesmic Desktop). In turn, the concern is that these less active users are missing out on a lot of updates from friends, which, means less value from the service.”
The old news feed algorithm always seemed to be good (almost too good, in a creepy way) at picking out the stuff people would be most interested in. Adding more things to the feed (without filtering the stuff people don’t care about) seems like it would have a Huxley-esque effect on how we use Facebook. The more and more useless stuff, the less likely we’re going to be to wade through it all to find the important things.
its all about the talent but the question on my mind is why did friendfeed decide to sell out? it must be that they feel that they are not going to grow or catch up with twitter or facebook
It was smart for Facebook to do this, they know the writing on the wall, plus now they get “Real-Time” search. Can we now say FaceFeed http://ff.im/6pQFY
Facebook scored a great team with FriendFeed crew. Here’s FriendFeed co-founder Bret Taylor’s advice to entrepreneurs, last Thursday, with FaceBook deal imminent: http://bit.ly/5REVi
Om, appreciate the depth. In military strategy, FF became a strategic multi dimension choke point. FF is a vantage point where you control the throughfare and visibility of several armies. Tweetdeck and Seesmic, now brizzly attempt the same.
Tweetdeck’s choke point choked out tr.I’m and their twitter app.
Imagine if google stuck their flag in this terrain before fb.
Thanks – chokepoint is the right analogy.
I think many are missing the point here — this is all about Google and nothing else.
I think twitter is not as big a problem for Facebook as we in Silicon Valley would like to think. In many ways, I think Facebook is the only legitimate competitor to Google as of now.
Great analysis. I agree that the web giants are jockeying ahead of a greater shift in user behavior, but I’m not so convinced this is a material acquisition strategically. Isn’t FF just a mashup of a handful of public APIs?
Real time search is definitely an incredibly functional tool. A good website in this space is http://www.gethighnote.com, which has search as well as track and share. It’s results are pretty useful and the track has helped me find some pretty cool information that might otherwise get lost.
Om
You talk about the “information overload” and the “problem of plenty”. You state that “the current seek-search-consume popularized by Google will eventually hit its outer limits — and when that happens, Facebook wants to step in and take the leadership baton”. OK fine I get all that.
“Facebook has course-corrected”? How exactly does acquiring a company that only delivers more real time junk (adding to the problem of plenty) help facebook take over the leadership position. Its not like they bought a better search solution. Even if they did, Real Time search of “plenty of junk” only produces junk. I think you are missing the analysis component completely. The why and the how of why FB will dominate remains unanswered.
Deepak
Deepak
I think you have to look at what FF brings to Facebook: ability to aggregate information and create conversations in real time around certain “clusters” – whether those clusters are people, groups, or say Photos. Now Facebook has the ability to better create those clusters because it has so much of our personal data.
Together, these two companies can now offer information (in real time) that is serendipitous. I don’t know if you remember the old News Feed on FB. It would surface information the system deemed was good for you. It was actually pretty good system, except it wasn’t real time and was too slow. The two teams together can make some interesting things happen.
Why FB would dominate: just look at the amount of shit people are feeding into it. And all of it is dark to the Google and other web. It is all organized around relationships. It is very different. At 250 million, FB already dominates and is changing the user behavior. It is making it important to think less of search.
Hope that explains it.
Some questions that come to mind with regard to Facebook acquiring Friendfeed
1. Friendfeed is used more as a “real time” aggregation service . Facebook also has some form of aggregation. But searching this aggregated content and in recent time file sharing etc allowed people to find topics of interest. How would Facebook policies evolve to allow such search of aggregated content?
2. Will this acquisition mean that seemingly more content will be gated or does it mean that facebook will open up more ?
I think there are two facets that are overlooked, public and private data.
Facebook allows (if users want) a generous amount of information and data to be public, but it isn’t that efficient, not in the scope or range of FF.
This gives them a ton of options to re-appropriate data (think about it every blog platform, twitter, photo sharing) from various platforms that FF interacts with seamlessly already, with the hope that the team backed with facebooks staff and funding can help them scale that.
Whether its public or private, how it looks, style etc, will then be the users choice, the key is that facebook is still the conduit. I think at that point, yes, this is very specifically a google acquisition, however there are a lot of hoops to jump through to get there, in the meantime its a variety of talent, data, existing platforms, and the potential to jump over an upcoming, inevitable user plateau by being the creation/publishing conduit for most of the social web’s data.
Om,
Great post and analysis. We are http://www.gist.com totally agree with your premise, in that, as the “plenty” continues you need some form(s) of dynamic aggregation and filtering. In the case of FF, it was “personal feeds (content by me)” and friends that filtered the web. This is a logical extension for FB with their real-time activity and built in friend network. However, I do agree with Deepak in that the FF filters may not aide that much for FB as they are already “friend based”.
We at Gist are taking a slightly different tack and trying to aggregate/filter content (email, personal content, news…) through your “professional” network of people and companies, but we focus on a system that can determine who are the most “important” of these people and companies automagically, like a FF for business, but without all the “subscribe, follow, friend, invite…” nonsense and one that brings the most important stuff to the top of the heap.
It remains to be seen what additional tools people will devise to aggregate, combine, filter…but it is true that the “old” search/find model will need some serious revamping.
Om, the ‘problem of plenty’ is in fact the ‘Paradox of Plenty’ idea – a theory in 21st century public diplomacy:
“Technological advances have led to a dramatic reduction in the cost of processing and transmitting information. The result is an explosion of information, one that has produced a “paradox of plenty.”
Plenty of information leads to scarcity — of attention. When people are overwhelmed with the volume of information confronting them, they have difficulty discerning what to focus on. ”
(http://www.theglobalist.com/StoryId.aspx?StoryId=3885 )
So the power is no longer information, but rather attention. This is the same theory that came to mind when first discussing the challenge of information overload a long time ago- we’re bombarded with infinite pieces of content from our growing amounts of RSS and social streams all competing for attention and it’s not humanly impossible to sift through and find the hidden items that really matter. So we end up consuming irrelevant content (overwhelming causes impaired judgment) or not consuming at all due to frustration…
This has become an ongoing process where bigger corporations buy smaller ones and become even bigger. We just turn out to say, “Wow!”. What makes me feel intimidated is that the whole world is going toward having a bunch of gigantic providers.
As we are in need of what they provide, I don’t know what may come out of this when for any reason the service or product isn’t available as before. We won’t interact with the local providers anymore. We deal with monstrous corporations.
I prefer to see 1000 music sellers instead of ONE big one who decides for me. Hasn’t it ever happen to you to have such feeling before?