The Facebook Market Top

That was it, now receding in your rear view mirror.

BREAKING: "Mark Zuckerberg hasn't even begun to tap into the potential of his creation."

WE KNOW! We've all been saying it for, what? Three or four years now?

And yet, it keeps not happening. Their targeted ad algorithms suck, their choices of partners, like Zynga, have been semi-embarrassing, Zuckerberg himself is increasingly coming under fire, and more than one person has suggested that maybe he's not the best choice to lead the company any more.

Then of course we have the infamous Business Magazine Cover Story Curse. If Fortune puts him on the cover next, Facebook's fate is sealed.

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Apparently I'm Not The Only One Frustrated By Facebook's Lack Of Advertising Savvy

Despite being touted as the new 800-lb gorilla of social network sites, Facebook keeps not delivering on it's much ballyhooed potential for advertising. "Potential" as my high school track coach loved reminding me, is one of the worst words in the dictionary.

New outstanding finance blogger 1-2 Knockout makes much the same point that I've done in the past, but with the added bonus a reference to the cult-film classic Swingers.

1-2 Knockout: What’s wrong with Facebook: or why Mark Zuckerberg should have finished Harvard

My question remains, when can we expect to see Facebook deliver the $15 billion worth of value that it's believed to be worth?

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Social Network Advertising Not There Yet

I've been mulling over my observations on the subject for some time, and this piece from last week on CNet about Google's ambivalence about social networking ad revenue is timely:

CNet: Google still waiting for social ad payoff

You may be friending and poking your acquaintances on social networks, but that doesn't mean you are paying attention to the ads. Or, maybe Google just made a bad deal with MySpace in which it guaranteed to pay a lot of money even if you don't click on the ads.
Google's fourth-quarter results missed expectations on Thursday, partly due to a rise in traffic acquisition costs that cut into revenue. Executives acknowledged in a conference call with analysts that they made less money serving up ads on social networks than they expected.

Since such a big deal has been made about the potential ad revenue from social network sites, I've made a special effort to notice the types of ads that Facebook throws at me. So far, by and large, the results have not been indicative of any great breakthrough in online ad targeting. What have I been bombarded by?

• Multiple online Role-Playing Games (which I don't play)


• Dating websites (which I don't need)


• Geographically targeted real estate listings from young, overeager local Realtors (if I were going to buy property right now, it wouldn't be from some twit who got her licence last month)


• The University of Phoenix (don't need an insta degree, thanks)


• Some apparel company that makes slutty clubwear for teen girls. I wish I had saved the link for your edification, but the picture above is a fair representation of their offerings. (I don't think they make furry boots in my size)

Aside from geographic targeting, I don't understand what in my profile would make Facebook think I would give a shit, let alone spend money with any of the above. I don't see any evidence at all that Facebook has some cunning master plan that allows them to do anything that online ads don't already do: hit keywords with sometimes hilariously innapropriate contexts, and shotgun random ads at surfers and hope that one connects.

I'm not saying that brilliant online ad targeting will never happen, I just don't think it's there yet.

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Newsflash: Not Every Facebook App is a Good Idea

Network World.com: Facebook's "Secret Crush" malicious widget tricks users

A "widget" application used on the Facebook social network site promises to tell you who has a secret crush on you, but instead tries to trick you into downloading spyware.
That's according to security firm Fortinet, which says it discovered the sneaky Secret Crush malicious code in the last few days, which appears so far to have infected about three million Facebook users.

Seriously people, if you're going to play on social network sites, don't be a fucking sucker, and sign up for every goddamn fun-looking application. Besides, "secret crush?" How socially desperate do you have to be to fall for that? Although apparently 3 million people meet that criterion.

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Facebook Ruins Christmas

Washington Post: Feeling Betrayed, Facebook Users Force Site to Honor Their Privacy

Sean Lane's purchase was supposed to be a surprise for his wife. Then it appeared as a news headline -- "Sean Lane bought 14k White Gold 1/5 ct Diamond Eternity Flower Ring from overstock.com" -- last week on the social networking Web site Facebook.
Without Lane's knowledge, the headline was visible to everyone in his online network, including 500 classmates from Columbia University and 220 other friends, co-workers and acquaintances.
And his wife.
The wraps came off his Christmas gift thanks to a new advertising feature called Beacon, which shares news of Facebook members' online purchases with their friends. The idea, according to the company, is to allow merchants to effectively turn millions of Facebook users into a "word-of-mouth promotion" service.
Lane called it "Christmas ruined," and more than 50,000 other users signed a petition in recent days calling on Facebook to stop broadcasting people's transactions without their consent.
Last night, Facebook backed down and announced that the Beacon feature would no longer be active for any transaction unless users click "ok." Beacon is a core element of Facebook's attempt to parlay the personal and behavioral information it collects about its members into a more sophisticated advertising business, an effort to turn a user's preferences into an endorsement with commercial value.

The lesson here is that no matter how much pressure we, individual consumers, put on businesses to respect us the onus remains on ourselves, first and foremost, to look after our own privacy. If you're going to participate in social networking sites like Facebook, you need to be a little more cognizant of the consequences of volunteering your information. It's ultimately your responsibility how much you put out there for others to see.

Oh, and cleaning out your browser cache on a daily basis is probably a good idea too. Just a thought.

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Other Quote of the Day

"Great, Microsoft is involved in Facebook. Does that mean it will stop working properly?"

-anonymous commenter on Marketnews.ca

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The Obligatory Blog Post About Microsoft's Facebook Deal

NYT: Microsoft Deal Values Facebook at $15B

SAN FRANCISCO (AP) -- It's hard to determine what's more surprising about Microsoft Corp.'s investment in Facebook Inc. -- the appraisal that valued a 3 1/2-year-old Internet hangout at $15 billion or the rare snub of online search leader Google Inc.
The $240 million price Microsoft paid for a 1.6 percent stake in Facebook demonstrates just how badly the world's largest software maker wanted to deepen its relationship with a startup that doesn't even have $200 million in annual revenue.

By now everybody else in the Blogosphere has had their say.

Dealbreaker's Opening Bell:

So yeah, as you knows, Mr. Softy paid $240 million for a mere sliver of Facebook, giving the company a $15 billion valuation. This is the valuation that everyone has been talking about... but it still sort of hits you in the gut when it's actually announced.

Marketnews:Microsoft Buys $240M Stake in Facebook.com

Large corporations find social networking Websites, and other online entities like YouTube.com, appealing mainly due to their powerful consumer reach: even though members can join for free, these Websites attract millions upon millions of visitors daily. These visitors, in turn, ultimately create the content that make the sites so popular, resulting in overhead costs that are much lower than a typical online business would endure. And this translates to very lucrative business opportunities from the likes of advertisers such as Microsoft.

And so on.

I don't really have anything constructive or meaningful to add to the discussion. Is Facebook worth $15 billion? Pfft, I have no idea. But my basic cynicism and rationality makes me sad that someone else already coined the phrase Dot-Bomb 2.0.

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Analyst sour on Facebook 3rd Party Applications

The Bridge: Facebook's Lengthy Tail of Woe

Eighty four or 1.7 percent of all Facebook applications receive 87 percent of all usage. Now that's one, long, long tail ... and it sure makes you think twice about the economics of developing applications for the popular website.These stats come from Tim O'Reilly of O'Reilly Research who has just released results from an in-depth study of Facebook. We've shown part of that depressingly long tail here ... and you can read more about it at http://radar.oreilly.com.

I think that's kind of a backward way of looking at it. As Han Solo put it, "Never tell me the odds." Discouraging developers from aiming for the bleachers by pointing out all the strikes is no way to try and create software that hits a home run. The reason why the vast majority of applications for Facebook don't get used is that they're dumb, pointless, and add neither utility nor value.

...

Okay, maybe I'd better back up a little. Looking at some of the applications I get invited to join on Facebook, such as Zombies, Werewolves, Vampires, Virtual Flowers, and Movie/TV Trivia, maybe the reason why the vast majority of applications for Facebook don't get used is that they aren't dumb enough, pointless enough, and aren't lacking enough utility, and only provide nominal entertainment value, even for the easily amused?

Obviously, there's a market for stupid gimmicks on Facebook, but the question that needs to be asked is how stupid is stupid enough?

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Facebook users shun Blu-ray

Or at least, that's what the totally unscientific Daily Poll on Facebook tells me.



What this signifies, I don't rightly know. But I like pointless statistics, so I thought that I would run with it.

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