If you’re not paying for something, you’re not the customer; you’re the product being sold- Andrew Lewis
The Internet is a surveillance state. Whether we admit it to ourselves or not, and whether we like it or not, we’re being tracked all the time. Google tracks us, both on its pages and on other pages it has access to. Facebook does the same; it even tracks non-Facebook users. Apple tracks us on our iPhones and iPads.Increasingly, what we do on the Internet is being combined with other data about us. Everything we do now involves computers, and computers produce data as a natural by-product. Everything is now being saved and correlated, and many big-data companies make money by building up intimate profiles of our lives from a variety of sources.
Facebook, for example, correlates your online behavior with your purchasing habits offline. And there’s more. There’s location data from your cell phone, there’s a record of your movements from closed-circuit TVs. This is ubiquitous surveillance: All of us being watched, all the time, and that data being stored forever. This is what a surveillance state looks like, and it’s Minority Report all over again.
Sure, we can take measures to prevent this. We can limit what we search on Google from our iPhones, and instead use computer web browsers that allow us to delete cookies. We can use an alias on Facebook. We can turn our cell phones off and spend cash. But increasingly, none of it matters.
There are simply too many ways to be tracked. The Internet, e-mail, cell phones, web browsers, social networking sites, search engines: these have become necessities, and it’s fanciful to expect people to simply refuse to use them just because they don’t like the spying, especially since the full extent of such spying is deliberately hidden from us and there are few alternatives being marketed by companies that don’t spy. This isn’t something the free market can fix. We consumers have no choice in the matter. All the major companies that provide us with Internet services are interested in tracking us. Visit a website and it will almost certainly know who you are; there are lots of ways to be tracked without cookies. Cellphone companies routinely undo the web’s privacy protection.
Maintaining privacy on the Internet is nearly impossible. If you forget even once to enable your protections, or click on the wrong link, or type the wrong thing, and you’ve permanently attached your name to whatever anonymous service you’re using.
In today’s world, governments and corporations are working together to keep things that way. Governments are happy to use the data corporations collect — occasionally demanding that they collect more and save it longer — to spy on us. And corporations are happy to buy data from governments. Together the powerful spy on the powerless, and they’re not going to give up their positions of power, despite what the people want.
Fixing this requires strong government will, but they’re just as punch-drunk on data as the corporations. Welcome to a world where Google knows exactly what sort of porn you all like, and more about your interests than your spouse does. Welcome to a world where your cell phone company knows exactly where you are all the time. Welcome to the end of private conversations, because increasingly your conversations are conducted by e-mail, text, or social networking sites.
And welcome to a world where all of this, and everything else that you do or is done on a computer, is saved, correlated, studied, passed around from company to company without your knowledge or consent; and where the government accesses it at will without a warrant.
Welcome to an Internet without privacy, and we’ve ended up here with hardly a fight.
What started at Facebook as a phone idea has now materialized as a mobile platform. That would not surprise many out there especially with Mark Zuckerberg ranting on about his ambitions to become a mobile company. With a billion and more users on Facebook – it was about time, Facebook would try and engage its audiences in a more controlled environment to be able to make better revenues. Facebook wanted to be the central entity in the mobile users life and thus the Facebook home.
Facebook Home is an alternative launcher on Android. This wraps the Facebook services around the home screen for the user – networking, chatheads, messaging, likes, follow, sharing, messaging, feeds, chatheads and more. However, Facebook Home hasn’t done any deep modifications to Android, like Amazon did with its Kindle Fire tablets. That allows Facebook Home to run on existing phones, in addition to new phones with Home pre-installed – a layer that runs on top of your existing Android software.
Eventually, Facebook plans to show advertisements somewhere within Home, and the company may also open up certain features of Home to other apps. Thus Facebook Home is to become to mobile & social what Google is to search; Question is – do I really need it? There’s so much of Facebook overload anyways that the evolved & matured users are moving away from Facebook. And FB is trying to put its wrapper around my mobile yet again?
From the user perspective, an agregator service has held the most promise but has delivered in the least. Classic example – iGoogle. Thus FB home is as Fab a concept as it gets- but FB fatigue may be a key impediment from mass usage. I am not sure but i am not exactly comfortable looking at my Facebook timeline every time i look at my home screen. And then there is alsways the privacy bug around the Facebooks and Googles of the world!
Bottomeline there – Facebook Home is worth a visit, but it isn’t yet a place I want to live. The way i see it Facebook home will induce a lot of trials but sooner users will get fatigued and turn it off! Zuckerberg needs to be smarter than this to make Facebook the centre of mobile experiences!
Facebook processes 2.5 billion pieces of content and 500+ terabytes of data each day. It’s pulling in 2.7 billion Like actions and 300 million photos per day, and it scans roughly 105 terabytes of data each half hour. The speed of data ingestion keeps on increasing, and the world is getting hungrier and hungrier for data. Facebook’s latest effort is about putting all this data in some perspective, to mine this data for insights across different storage clusters with efficient use of resources and cost leading to real time live performance management on data outputs. And to achieve a seamless integration of data across huge data centres, Facebook has put in place initiatives such as Project Prism and Corona.
‘Project Prism,’ will allow Facebook to maintain data in multiple data centers around the globe while allowing company engineers to maintain a holistic view of it, thanks to tools such as automatic replication. Corona, makes its Facebooks’ Apache Hadoop clusters less crash-prone while increasing the number of tasks that can be run on the infrastructure.
So while Google is indexing information around the world, Facebook is indexing user behavior and reactions to a wide range of stimulus around the world. Now then, the only thing that Facebook would ideally want to fix is the ability to sell this data and get a good price for its share.
What Could Go Wrong with Facebook? Everything! (No this isn’t paranoia)
Once hailed as the most valuable technology company to hit Wall Street, Facebook is now worth just over half what it was three months ago, with shares closing at $19.87. The company is suffering from a classic disease — it went public at too high a value. In an earlier post I had argued that FB will find the going very difficult in terms of managing expectations because of the stretch in valuations that it had opted for in the IPO. The challenge for Facebook, is to persuade the market that it is not a fad and that its managers have a blueprint for making money. Analysts have pointed out that Facebook has been slow to figure out ways to make money from mobile devices; half of its users log in on phones and tablets. Given its exceptionally high valuation in its initial offering, FB is under intense pressure to show that its advertising model can deliver the lucre that Wall Street expects.
From a $100bn blockbuster debut to a $42bn valuation in 3 months, Faceboook’s twist of fate, in many ways, reflects the tension between two moneymaking cultures in America: Silicon Valley and Wall Street. They are as symbiotic as they are dismissive of each other. They are equally focused on making money, but their approaches are different. Wall Street wants to see swift growth in revenue, given Facebook’s still high valuation of around $50 billion. Facebook says that it is building tools that will forever change the world — but have yet to reveal any details about how they plan to quickly increase profits.
Quoting Doug Purdy, the director of developer products on FB’s future- One day soon, the Facebook newsfeed on your mobile phone would deliver to you everything you want to know: what news to digest, what movies to watch, where to eat and honeymoon, what kind of crib to buy for your first born. It would all be based on what you and your Facebook friends liked. In effect it moves from the search or pull economics to push economics which is purely analytics based. (In fine lines- Facebook’s future would be built on Google’s grave).
In the technology business, few companies can keep the fairy tale alive forever- Facebook has had a run like no other in the present – but sustaining the momentum and managing expectations is a balancing game that Zuckerberg and Co. need to master fast.
Facebook’s shares continue to tumble under the weight of its own expectations. Facebook’s mid May 2012 IPO was pegged at $100bn and with growth stalling, the m-cap is a downward spiral. I had written about the extremely stretched multiples which make Facebook’s share price unsustainable.
Facebook’s share price is down 47% in 3 months after the IPO. In its earnings call for the quarter, Facebook Inc reported a drastic slowdown in revenue growth and offered no financial forecasts to ease worries over the prospects for boosting advertising in its first earnings report as a public company, sending its shares to a record low.
While Facebook has pointed to early signs of success in new advertising services, but the lack of a detailed financial outlook went over poorly with investors hoping for evidence that the company could soon reverse the continuing slowdown in its business. Facebook posted a net loss of $157 million, or 8 cents a share, in the second quarter after taking hefty stock compensation charges related to its IPO. That compared to net income of $240 million, or 11 cents, in the year-ago quarter.
Facebook has raced through eight years of break-neck growth that was to have culminated with its May initial public offering. Instead, its share price has headed south as investors questioned its valuation of more than 100 times earnings and its longer-term ability to sustain growth as users migrate to mobile devices.
Monthly active users grew to 955 million at the end of the second quarter, up from 901 million at the end of March. But mobile monthly active users surged 67 percent year-on-year to 543 million users, adding further pressure on Facebook’s business, which only recently began to offer limited forms of mobile advertising.
While advertising “impressions” lagged user growth during the second quarter but that new social ads, which appear directly in Facebook users’ “newsfeeds”, were driving up ad rates. The average price of a Facebook ad increased 9 percent during the quarter, driven primarily by the United States where rates jumped 20 percent with the company’s newly released social ads.
In effect, facebook’s slow down is a study of failing under the high growth expectation set by the blistering pace of growth registered earlier. However what seems to pinch the investors is a stretched valuation of $100billion when the new advertising avenues have not fully driving the revenue growth engines
RIM has hired JP Morgan and RBC Capital to help search for a partner to license its software. However, Bankers don’t normally help in mere partnership capacities. They become involved when a company has put itself up for sale. And there is no doubt this is exactly what RIM has done. Its announced job cuts last week was a move to make itself more attractive to potential suitors. (Read earlier posts about Blackberry’s fall here - Part 1, Part II, Part III and Reprise)
Whenever RIM/Blackberry is said to be a target of an acquisition, there is the obligatory mention of Microsoft, which makes perfect sense; it would relish the opportunity to beat Apple and Google at their own games while strengthening its existing partnership with Nokia. For that matter, there are plenty of reasons why Nokia might enter the mix and make a play of its own for RIM.
However, the focus really is another company which is trying to make its own smartphone- Facebook. Even while trying to assess whether of nor exactly the value of social media is $96 billion, Facebook has announced its interest in smartphones (not a smart idea really!). We have seen examples of another tech lord miserably failing in terms of hardware – Google and yet its Moto acquisition. If that be the direction Facebook is rooting itself to – Facebook needs RIM as much as RIM needs Facebook.
Facebook has to justify a lot of $s on its ability to monetize 900 million users and its ad revenue model. In RIM, not only will Facebook get a better enterprise presence; it will acquire assets such as RIM’s BB10 software, a growing music service as well as RIM’s Mobile Fusion, a product that supports the collaboration of enterprise mobile devices, even that of competing models such as iPhones and Android devices. These services, as you realize will help Facebook diversify and hedge its risks and further its mobile ambitions.
In Essence, Facebook immediately becomes a hardware and services company while silencing critics who assert that the company does not monetize well and enough and hence the valuation is merely a fad, a bubble.
For RIM, the game is over — end of story! But marry it to Facebook and a whole new dimension could uncover.
Continued from the blog: Facebook needs to change the game
- 500 out of 900 million Facebook users are using Facebook through mobile devices
- In March, the average Facebook mobile user engaged with the social network for more than 7 hours, according to comScore
Going forward Facebook is expected to capitalize on mobility through advertising as it prepares for its IPO. That’s stats provided above give a lot of head-down time to which Facebook has to respond. Mark Zuckerberg’s, top priorities going forward is to transform Facebook’s mobile and advertising experiences and further integrate online apps into the platform
The big question is how the company can make more money with advertising on mobile. You can bet Facebook will figure it out considering advertising is the reason Zuckerberg and other insiders are about to become extremely rich.
For users, more advertising on mobile is somewhat of a drag, but there’s utility involved as well. A lot of what we’re doing on and with our mobile devices is being tracked by scads of application developers and device makers who aim to improve their products and marketing activities because they know what we like, where we go and how we spend our money. Needless to add, Facebook wants that data, too.
The ads we’ll be seeing on mobile will increasingly be highly relevant and the time is coming when we’ll get offers and ads pushed to our phones the minute we step over a retailer’s threshold at the mall.
Facebook is “just getting started” with its mobile app. As Facebook collects more data, such as location and which friends “like” certain products mobile ads will be better targeted to users.
Facebook’s initial public offering is set for this week and media outlets are stirring up a frenzy, reporting on everything from whether the company is overvalued at $96 billion to which character traits propel Zuckerberg to give speeches to groups of big-shot investors wearing a hoodie sweatshirt. Facebook’s mobile future is also getting a lot of attention.
Zuckerberg and the FB gang have been great aat connecting 900 million dots. Its time they take the game to a different level- monetizing the dots.
A $95bn IPO may not be top of the mind for Mark Zuckerberg who is intent and focused on getting the social strategy for Facebook right. However, to many analysts and investors, the valuation is stretched and raises a spec of concern and doubt on the ability of the FB network to make money that is commensurate with the expectations.
Interestingly enough, a positive indicator that can provide FB the fillip is that Premium “Social” ads such as sponsored stories, “likes”, comments and other endorsement of brands’ activity have increased 26% y-o-y. Typically Premium ads make up for 25% of FBs ads. The concern area is a drop in CPC (Cost per Click) for the standard ads by an equivalent 26%. Overall CPC rates have gone up 23% across both categories. Another cause of concern is that Click thru rates have also gone down by 6%.
1. The dichotomy between standard and premium ad pricing trends reflects FB’s attempt to move away from keyword targeted “direct response” advertising – the so called plain vanilla marketplace ads towards getting big brands to buy “social” campaigns. The company’s re-orientation around large brands and away from the smaller ones may the driver of the difference and a definitive forward move to justify the stretched valuations in terms of revenues.
2. Facebook also needs to prep up its mobile presence. With 55% of Facebook users accessing the site from their mobile phones, the Facebook mobile become a key access point which FB cannot miss. The FB app on mobile today is just about a decent experience for sociaal networking. How Zuck can add the “brands” angle to this is the key challenge for FB. FB has been acquiring small time smart-ups expectedly to build on the mobile presence. But acquiring is one thing, executing is quite another. We havent seen much from FB in terms of exploring mobile for brands.
3. The other interesting rumour doing rounds is Facebook search. Fundamentally different from Google in terms of generation of leads through social network anchors – likes, location, friends. That indeed is aa very interesting angle to search given that word of mouth and social networks are big influencers.
Facebook’s success ride has beeen phenomenal. Thats got it this far… a $95 bn IPO vaaluation. However, FB will have to change a few things around fundamentally if it were to justify a $100bn valuation and how it wants to poistion itself in the future. The ingredients are all there… how they mix them around and create the dish out of it.. is worth watching out for.
Presenting a two post series on the future of search as Google and Facebook are evolving it each from its core sterngth perspective. This has been reproduced from an article by Drew Olanoff: Facebook versus Google- Who can win Search?
It’s a well-known fact that most people don’t get past page one of Google’s search results. This is why Google is doubling down on integrating a social layer into everything that it does. While algorithms can crawl the entire web to find relevant information, could the things that we share on Facebook become a better and more reliable data-set?
Searching the social network could get a lot better in the near future. Facebook is rumoured to be working on an improved search engine which will help users better sift through the volume of content that members create on the site, such as status updates, and the articles, videos, and other information across the Web that people “like”. Facebook and Google have one thing in common, they absolutely love data. The only difference between the companies may soon be the way that the data is shown to us.
Google’s approach to search
Even if you’re really good at using Google, it’s hard to find exactly what you’re looking for sometimes. As it appears now, even with the launch of Google+, Google scours the web for content and then churns it through an algorithm that decides which content is more relevant. The social layer that it has instituted allows its users to validate what the machines have already decided. That’s placing Search before social, algorithm over recommendations. This works really well because people view information differently, and there really is no such thing as natural language search. If the Internet was “flat”, meaning it wasn’t indexed at all, relying on people to find the content that might be relevant to you is like pissing in the wind. Basically, the experience is going to suck big time.
On the other hand, when you want to ask people for recommendations, you don’t even know where to start. For example, if you want to eat dinner but are`n’t sure what type of food you want, Google doesn’t really help other than to give you a list of sites that have lists of restaurants in your area.
Basically, Google has an extra step if you want recommendations.
Presenting a two post series on the future of search as Google and Facebook are evolving it each from its core sterngth perspective. This has been reproduced from an article by Drew Olanoff: Facebook versus Google- Who can win Search?
Facebook’s (potential) approach to search
By cropdusting the web with “Like” buttons, Facebook has a huge set of data and information curated by all of us, without the fluff that Google scrapes daily. Think of it as a super-fine set of information that has already been pre-screened by humans. Now if Facebook wanted to “improve” its search, it wouldn’t be as simple as making an algorithm that mimics the experience that we have today on Google.
With lists, subscriptions, likes, and location data, Facebook could let us perform a very direct query with a finite group of people. Basically, a set of our friends or colleagues would be our “search engine”. What would that experience look like? Well, I imagine that you’d type a natural language query and then drill down to whose data you’d like to use to perform the search.
For example, I wanted a taco, I wouldn’t necessarily type taco into an open search box like I would on Google. I’d choose a location or a group of friends and then search for “taco”. Based on where they’ve checked in on foursquare or Facebook, or things that they’ve liked, I could be given results to check out.
It’s not perfect, but it’s not bad either.
First, you have to remember to stop referring to these companies as one “thing” or another. Google isn’t a “search company” and Facebook isn’t a “social network”. They are both companies who want to change the world and make money. We all know that there’s big money in big data. These companies have different approaches to how they’re collecting and displaying the data, but at the end of the day, they’re kind of doing the same thing.
We’re watching a potential clash of the titans where two things are extremely obvious: Google is late to social, and Facebook is late to search. Sure, Facebook has Microsoft in its corner which could help them out a great deal, but as Bing stands, it’s extremely similar to the experience we have on Google today.
The next big step for search is outside of the box completely, with less data and more relevant results. The question is, do you trust regular people like you and I to decide what’s best, or do you prefer to let a bunch of machines try to figure it out for you. The answer is a mix of both, but who will do it better?
At the end of the day, we’re going to use what works best for us. Until Facebook makes a move, it’s still a Google world. However, Mark Zuckerberg and company aren’t going to sit back and watch the stream of data and dollar signs pass them by. It’s going to be an epic battle and it could be anyone’s game.