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For New Social Networks, Sharing Can Be More Focused

Posted in Board Of Intellectual Capital, Economy, FaceBook, Gerbsman Partners, internet, Investments, Market research, mobile 2.0, OpenSocial, Social Networks, Strategy, Venture Capital, Web 2.0, tagged , , , , , , , , , , , , on January 20, 2011| Leave a Comment »

Article from NyTimes.

“With Facebook’s membership approaching 600 million, and more features and apps continually being added to the site, it sometimes seems as if it’s the only social network around. But it’s not the only one, even if it’s dominant. Specialized networks are catching on with users who prefer a more focused way to share photos, videos or music, or who simply don’t want everyone on Facebook looking at their pictures.

Some of these networks leverage the existing huge audiences of Facebook or Twitter to let their users reach the maximum number of friends. But if you’re worried about Facebook’s potential privacy holes and want to steer clear of them, there’s a network for that, too.

INSTAGRAM Instagram, a photo-sharing network based around a free app for Apple’s iPhone, is the breakout hit of specialty social networks. The service, which was introduced in October, says that more than a million users have already signed up.

Instagram’s secret weapon is its built-in photo filters, which modify your pictures before you upload them. Some effects are corny, but some — like the sepia-inspired Early Bird filter or the soft-color Toaster — work wonders at removing the often harsh lighting and jarring colors of cellphone photos. With the help of the filters, the images may look better than those uploaded to other social sites, like Facebook.

Davin Bentti, a software engineer in Atlanta, uses Instagram to control where he posts photos.

“Instagram lets me share photos on Facebook, Twitter, Flickr, Posterous, Tumblr and Foursquare,” he said. “When I take a photo, I can put it everywhere without having to think much about it. But I can also put it only where I want it to go.”

For example, Mr. Bentti said, he skipped Twitter when posting a recent photo of his dog, because his Twitter followers are mostly professional colleagues.

To get started, download the free Instagram iPhone app, and sign up for an account. If you own an Android phone, be patient; an app for that operating system is in the works, the company said.

To find friends to share your photos with, start the app and tap the Profile option at the bottom right of its screen. Instagram offers several ways to find people: log in to Facebook or Twitter to see lists of your friends there who are already signed up with Instagram; search your phone’s contact list to match the e-mail addresses with existing users; send invitations to those in your contact list who have not yet signed up; search Instagram’s database of users and usernames; browse a list of suggested users whom the company has deemed worth following for their photos.

“We don’t see ourselves as an alternative” to Facebook, said Kevin Systrom, Instagram’s chief executive. “We see ourselves as a complement, to allow for sharing on multiple networks, all at once.”

PATH Path, a photo and video sharing network, also sees itself as an enhancement to Facebook; users can log in to Facebook to find Path users to share with. But Path limits the sharing to 50 friends at most, rather than with everyone you know. And you can’t post your Path photos to Facebook itself. Your friends need to check their Path app or Path’s Web site to see your images.”

Read more here.

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Social gaming is a $1 billion business

Posted in Board Of Intellectual Capital, Economy, FaceBook, Gerbsman Partners, internet, Investments, IPO news, Market research, Social Networks, Technology, Web 2.0, tagged , , , , , , on January 13, 2011| Leave a Comment »

Article from SFGate.

“There’s been a lot of talk about San Francisco’s Zynga, the hot developer of the popular online games FarmVille and CityVille, going public.

Now comes a new report from eMarketer that predicts the social gaming market will surpass $1 billion this year, as online advertisement spending increases.

It calculates that nearly 62 million Internet users, or 27 percent of the online audience, will play at least one game on a social network monthly this year, up from 53 million last year.

Much of social gaming revenues, about 60 percent, come from virtual goods — special glow-in-the-dark cows and the like that players can buy for small change. They quickly add up — to an estimated $653 million this year.

Marketers are expected to pump more dollars into online advertisements, spending $192 million, up 60 percent over last year.”

Read more here.

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Generating wealth from the web. Is “follow” the new economic model poised to take on “search”?

Posted in Board Of Intellectual Capital, tagged , , , , , , , on December 5, 2010| Leave a Comment »

By: Tony Fish – Principal at AMF Ventures and member of Board of Intellectual Capital.

I wrote that Social filtering is deeply human at the beginning of November and I knew that there was more to the topic/ theme/ thought then but I could not articulate it.  Since then I have been juggling with various ideas, these have often been driven by my necessity to justify Twitter.  Twitter, get it or not, provides a function called “follow” – you can follow who you like, and you get updates/ insight/ information/ attention from them. However, can you turn “follow” into value and is following your social filter based on those you trust.

Follow has an obvious value to the person who follows the leader.  You gain free insights/ selection/ value/ updates/.  This social filter is based on trust and it is different from curators and editors who have specific agenda’s and income/ profit requirements. In the original post I quoted David Armano  “Often times the quality of links and information I get on Twitter is better than what I would have gotten from Google because the knowledge of the human feed is deep, niche, and fickle.”

Scenarios
Here are several scenarios to consider when thinking how we could turn follow into value and comparing outcomes from search and social networking, they are not exhaustive but should provide a good place to start a train of thought.

1, I am looking for a great Thai restaurant

  1. Search.   Type in “Great Thai restaurant” into Google, my mobile sends my location and Google takes a guess I want food tonight and near to where I am search, reasonable assumptions driven from our need for context and personalisation.  From the “unknown algorithm based results” that favours Google, I then read some third party reviews which I cannot judge if they are paid, biased or just vocal. Is the selection any better than walking past and seeing how many people are sitting in the restaurant?
  2. Post to Facebook and ask my friends and my network where a “Great Thai restaurant is” – there is more work to this one and I am wholly dependent on someone helping.  Size of network helps at this point.
  3. Twitter/ follow. I love Thai and I am already following others who love Thai.  I Tweet to my network of same minded followers who can deliver a recommendation.

In option 1 – Google wins.  In option 2 – Facebook wins.  In option 3 – the community wins and the person who helped me may get a discount on their next meal.

2.  I want to invest some money

  1. Search.   Type in “Great Investment fund” into Google. From the “unknown algorithm based results” that favours Google I will click on some links and read, subject to many legal notices, about the performance of various funds.  If I invest I will have watch and wait for the results.
  2. Post to Facebook and ask my friends and my network about their experiences with “Investment funds.” Not sure I would really be that happy with this for many reasons including telling the world about my desire to invest.
  3. Twitter/follow.  I love to invest and I am already following others who love investment.  I follow a service that allows me to manage my own money (never give up control) and I invest based on what the best in class is doing (www.covestor.com) To follow the best investor I share some of the upside.  No management fees, no overheads, risk on my terms, stop and start when I like.  Worth noting that J.P Morgan funds investment advice is now on iTunes

In option 1 – Google wins.  In option 2 – no-one wins.  In option 3 – the person who I follow gets a share of my upside, assuming that they want to create value over time and not destroy it once.

3.  What is hot in tech/ service/ my industry

  1. Search.   Type in “what is hot in tech” into Google. From the “unknown algorithm based results” that favours Google I will click on some links and read.  The top tech web sites are there with breaking news.  I can use various tools to determine what is hot and trending or I can use my “reader” to filter from my own favourites.
  2. Post to Facebook and ask my friends and my network about what they think is hot.  Day 1; I will get a few views. Day 10; I will get a less help and probably a polite note telling me not to ask again.
  3. Twitter/ follow. I look at what is trending and select a few “trusted” people to follow and follow updates as and when they occur.  I add value to my network by adding my own opinion, or pay to sit there and listen.

In option 1 – Google wins.  In option 2 – no-one wins.  In option 3 – the community/ cluster wins.

Logical response
The obvious contention to these three and very simple scenarios is; to Quote Paul Rodriguez who commented,  “lemmings, pied piper, following somebody the wrong way up a one way street, jump off a cliff if I told you, following the falling domino in front and having the falling domino behind follow you, following somebody you trust, who is following somebody they trust who is following somebody they trust who is following somebody stupid, the list is endless…the risk is that instead of having the madness of crowds, maybe the 21st century equivalent is the madness of tweets? Laws such as the snowball effect and the law of unintended consequences become far more amplified in an interconnected world. In which case market (and wealth) fluctuations become more volatile, but then you only *truly* make money on the gradient.”

I expect that there is a lot of empathy for the logic of this response, however, is follow (Twitter or other tech based follow services) any different from what we have today with editors/ press/ celebrity and broadcast as we all believe everything from the red top tabloids and sky/fox news!

Context
However, putting follow into context Researchers at HP Labs discovered that Twitter can predict, with astonishing accuracy, how well a movie will sell. The researches at HP started by monitoring movie mentions in 2.9 million tweets from 1.2 million users over three months. These included 24 movies in all, ranging from Avatar to Twilight: New Moon.  Then they took two different approaches, dealing with two very different performance metrics: the first weekend performance, which is largely built on buzz and the second weekend performance, which is largely built whether people actually like the movie. To predict first weekend performance, they built a computer model, which factored in two variables: the rate of tweets around the release date and the number of theatres its released in. Lo and behold, that model was 97.3% accurate in predicting opening weekend box office. By contrast, the Hollywood Stock Exchange, which has been the gold standard for opening box-office predictions, had a 96.5% accuracy. “

What should be even more alluring to business strategists and CEO’s; as Tech Review points out, Twitter might be more than just a mirror of mass sentiment – the service might also influence it. In other words, could you actually make a product launch far more successful with a really smart Twitter/ Follow strategy?   However are we measuring or observing the results of a system in motion and in the process influencing those results? For anyone with a science background this will bring up Werner Heisenberg and The Uncertainty Principle Heisenberg determined that “both the position and momentum of a particle cannot be known simultaneously.”   The dichotomy raises the mind-boggling prospect that unless we observe an event or thing, it hasn’t really happened, that all possible futures are quantum probability functions waiting for someone to notice them – trees falling unheard in a forest. Maybe this blog never existed until you searched for it and Google created it as you wanted it!

(Yes for those who have mastered QM I am confusing the observer effect of with the uncertainty principle. Technically the uncertainty principle has nothing to do with “observing”, it has to do with measuring. The observer effect is a supposed effect of observing an event and the influence of your observations on the event. No one would ever have to actually observe a particle’s position to obfuscate its momentum, the mere act of using the photons to measure its position, even if nobody ever observed it, would suffice. It’s the act of measuring, not actually observing that causes the uncertainty principle, but when observation requires something that may cause change the problems occur).

Anyway, how does this relate to the analysis and feedback within my framework of thinking about Follow?  Think about it this way:  The mere act of observing a social change, changes the behaviour of that social object.  In “reality TV” they put cameras in front of “real” people for the viewer to watch how “real” people behave, date, compete, etc.  But this in fact makes those on camera less and less real.   They’re not actors, nor are they behaving like normal people.  They are somewhere in between the two.

In the case of Twitter predicting a movie success, could an editor or critic have the same effect, if they could do it in real time and not on paper? How does Google real time search affect your searching habits and techniques.  You no longer have freedom in the web, as the recommendation is based on what the crowd says is important and therefore we are actually just lemmings.

Restating the Problem
Therefore the problem (Generating wealth from the web) is far more complex, multifaceted and inter-twangled, as there is unlikely to be a single source.

  • Do I want to be directed by people I trust but I may not be able to determine their source – Follow
  • Do I want to be directed by an unknown algorithm that can change at any time and could be biased to their own needs – Search
  • Do I want to be directed by Brands – Marketing/Ads
  • Do I want to be directed by the media/ editors/ critics where I may be able to determine their bias – Broadcast/ News
  • Do I want to be directed by the fashion/ celebrity – Sales

This complex dependency is an issue that editors and bloggers have faced time over.  Do I post based on what people want to read, based on clicks and response data or what I find interesting – are we (am I) adaptive or reactive, do we want to be individual or loved or make money or provide democracy or lead?

I really don’t need to know what you had for lunch and I don’t have to follow you.  Follow would put me in control and can seek out value from the community and not some bland algorithm that controls what part of the web I can see. However the issue facing follow is how will I pay the platform that underpins the service?

Wrapping up
This long Viewpoint started with the idea that “follow” is the new economic model poised to take on “search” and I believe that there is value in “follow.” Reading that Google offered $3bn for Twitter makes be believe that there are other strategists who are struggling with the same issues and the value!

If you would like to chat about the opportunities that digital footprint data brings, especially from the perspective of mobile and real time feedback, please contact me at tony.fish@amfventures.com.  The book is free on line at http://www.mydigitalfootprint.com/ or you can buy it direct from the publisher at the web site. There is also a summary and a eReader/ Kindle version.

We hope that our Viewpoint improves awareness, raises questions and promotes deliberation over coffee. We will respond to e-mail, text, twitter (@tonyfish)  or blog comments. http://blog.mydigitalfootprint.com
Kind regards,
Tony Fish

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Microsoft, Facebook strengthen partnership

Posted in Board Of Intellectual Capital, boic, tagged , , , , , , on November 22, 2010| Leave a Comment »

Article from SFGate.

“Microsoft Corp. and Facebook Inc., the onetime technology king and the claimant to the throne, are forming an increasingly unified front in the battle for industry supremacy against Google Inc.

The software and social-networking giants have announced a series of partnerships in recent months, including the integration of Facebook user data into Microsoft’s Bing search engine results and the use of its Office applications in the Palo Alto company’s planned communications service.

No single initiative announced so far represents a clear game changer, analysts say. But the Redmond, Wash., software company lends some hefty industry support to a Facebook vision of the Internet that’s far different from the one that fostered Google’s rise, some argue.

‘Substantial threat’

“When you add all of these (collaborations) up – and there seem to be more of them every week – then it really is a very substantial threat to Google,” said Ray Valdes, an analyst with Gartner Inc.

He and others believe that cues in social networks, like a friend’s links and “likes,” are becoming increasingly important guides to the Internet experience, which could over time undermine the importance of the online searches that Google has long dominated. If so, it might become increasingly difficult for Google to sustain the growth in its core business and it could give Bing a powerful advantage, because its search results now incorporate friends’ preferences.

But, of course, those are all big ifs, mights and coulds.

For one, it assumes that Google won’t develop its own social capabilities – an effort it’s known to be pouring resources into after several whiffs – or strike a similar deal with Facebook. It’s unclear whether Google would want a partnership that would grant its competitor so much credence, or whether the Bing relationship is an exclusive one. Microsoft referred the question to Facebook, which didn’t respond to an inquiry from The Chronicle.

It’s also notable that even with the spectacular rise of Facebook, marked by a six-year sprint to more than 500 million users, Google’s advertising revenue from keyword searches continues to swell. Meanwhile, the Mountain View search behemoth is demonstrating an ability to generate money outside its core business, saying during a third-quarter conference call that display advertising and mobile revenue reached $2.5 billion and $1 billion, respectively, on an annualized basis.

“As the Web evolves – from mobile to video to display ads to cloud computing – our business grows with it, and the results speak for themselves,” a Google spokesman said.

Different philosophy

Google has stressed that its philosophical approach to technology differs fundamentally from those of key competitors, dubbing theirs an open system that allows users to control their information and other companies to adapt the software as they see fit. By extension, it has suggested or stated that companies like Facebook, Microsoft and Apple Inc. generally operate closed systems that tightly control user data and experiences.

“I worry … that the business structures are causing (companies) to keep too much private information,” Google Chief Executive Eric Schmidt said during an interview at the Web 2.0 Summit in San Francisco this week. “We’ve taken the position that user data is the user’s, and it should be possible for them to move it back and forth.”

Open, closed systems

There’s ample debate, however, over the appropriate definitions of open and closed systems, and whether Google sometimes acts like the latter when it fits its interests. Moreover, as Apple CEO Steve Jobs said last month, when discussing the highly popular and tightly integrated iPhone, closed systems sometimes win.

“The link between (Facebook and Microsoft), especially across applications and communications, can be a very powerful partnership,” said Tim Bajarin, president of Creative Strategies Inc. in Campbell.”

Read more here.

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Facebook Credits starting to make some real money

Posted in Uncategorized, tagged , , , , , , , , , , , , , on November 15, 2010| Leave a Comment »

Article from SFGate.

“If Facebook were a country, it would be the third largest in the world, so it figures that the social networking giant is trying to develop its own currency – Facebook Credits. Already, those credits can buy virtual goods from more than 200 applications on the Facebook platform, like special crop seeds or enhanced tractors in the otherwise free-to-play social game FarmVille. But credits have moved into the physical world as well. Last week, Safeway Stores joined Target, Best Buy and Walmart in selling Facebook Credit gift cards, just in time for them to become a stocking stuffer for the onrushing holiday shopping season. “We want Facebook Credits to be the virtual currency on Facebook,” said product marketing manager Deborah Liu for the Palo Alto firm. Analysts say Facebook Credits also have the potential to become a universal online currency that crosses both applications and country borders, not to mention a multibillion-dollar revenue source for Facebook, which takes a 30 percent cut of each transaction. Credits, for example, could be the future currency used by publishers of digital content like news and video, said analyst Atul Bagga of the investment research firm Think Equity LLC. For now, “Facebook is only taking baby steps,” Bagga said. “But you can see that Facebook Credits can go far.”

Positioned to win

Indeed, online payment systems are a key component of the main theme for the Web 2.0 Summit that begins today at the Palace Hotel in San Francisco. The convention will focus on “a battle to gain the upper hand in crucial ‘points of control’ across the Internet Economy,” entrepreneur and tech journalist John Battelle wrote earlier this year in a blog post setting up the theme for this year’s conference. And with more than 500 million active members, Facebook is already positioned to become a winner in that battle. “As Facebook Credits increases in usage, Facebook will begin to look and feel like its own economy,” said Augie Ray, a senior analyst at Forrester Research Inc. The privately held Facebook isn’t disclosing how many of its members now use Facebook Credits, which grew out of a Gift Shop feature that closed Aug. 1. Earlier this month, Wedbush Securities projected Facebook will generate more than $1 billion in sales from virtual goods this year, and approach $2 billion next year. Currently, there are more than 200 games and applications from 75 developers that accept Facebook Credits for those virtual goods, including 22 of the 25 most popular social games. On Nov. 2, Facebook signed a five-year deal with Redwood City video game giant Electronic Arts to use Facebook Credits as its exclusive payment method for its social games, such as Pet Society, Restaurant City and FIFA Superstars. That followed a similar deal earlier this year with San Francisco’s Zynga Game Network Inc., maker of popular social games like FarmVille. But there are non-game apps, such as Family Tree and Hallmark Social Calendar, that also accept Facebook Credits for virtual gifts such as digital birthday cards. And charitable organizations like Stand Up to Cancer and the anti-malaria Nothing But Nets have accepted Facebook Credits donations. The payment system could become especially important since Facebook is also pushing its Connect program to directly bridge the social network’s members with millions of other websites.

Making it easy

The system works in a way that’s similar to real-world transactions such as using a BART transit card. Facebook members use a regular credit card, PayPal account or mobile phone account to buy a certain value of Facebook Credits, starting with 15 credits for $1.50. Facebook Credits accepts payments using 15 currencies, including dollars, euros and yen. Like BART cards, which deduct fares based on the distance of travel on the system, a Facebook Credits account is charged for the value of a virtual item that in real currency might cost only a few cents each. It’s the basic concept used by Apple Inc. to sell 99-cent songs on iTunes at a time when downloading songs for free was all the rage, said Alex Rampell, chief executive officer of Trial Pay Inc. “How did Apple get everybody to pay? They just made it very easy,” said Rampell, whose Mountain View company offers an advertising system that entices social game players to try a real product like pizza or cosmetics in exchange for Facebook Credits. Indeed, Facebook’s Liu said the company sees a “sweet spot” for making a frictionless micro-payment system. The company is slowly expanding its list of developers who can “just plug into Facebook Credits” and not have to worry about creating their own payment system, she said. Social gaming is just the first industry to be affected, “but we think a number of verticals will break through,” Liu said.

Potential markets

Airline tickets or other big-ticket purchases may not be practical for Facebook Credits. But news site publishers, for example, could use Facebook Credits to get readers to buy access to an important story or a special video, Bagga said. “And music is a very social phenomenon,” he said. “There are so many industries that can have disruptions due to the social networking phenomenon.” Facebook, however, is based on the proposition that members make the network work by sharing their personal information, so it has also sparked numerous controversies over privacy. Facebook Credits might bring even more scrutiny. “As Facebook becomes a bigger part of the user’s shopping and purchasing activities as well as an even greater part of their communications activities, there’s going to be a greater focus on the part of government as to what Facebook is doing,” Ray said. Read more here. 

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