reDesign

The announced Microsoft bid for Yahoo! means a lot of different things for lots of people. An emboldened competitor for Google. A stronger ad network for advertisers. Heightened acquisition hopes for AOL. Better benefits for Yahoo! employees. (Microsoft has the best benefits I’ve seen in the industry.)

But what does it mean for every day consumers? The biggest impact is likely to be in the mobile space. Microsoft’s ownership of the Windows Mobile OS and Yahoo’s large audience and mobile applications could revolutionize the industry.

As revolutionary as the iPhone is, it’s not a true network device. Apple did a terrific job integrating four devices – phone, Internet tablet, media player and camera – into one.

Even as our lives get more and more digitally connected, the cell phone remains a remote island of information. Someone needs to build a device that integrates the Internet seamlessly.

Some of the things I’d like to see:

• A network address book. You no longer have to use the 10-key keypad or a sync cable to keep your address book up-to-date. In fact, you don’t have to update it all – as your contacts move, those changes are automatically reflected. The address book would incorporate network presence so that you don’t call people when they’re in the middle of something.
• A network calendar.
• Integrated photo applications. I’ve been looking for a way to view pictures from my friends on flickr through my mobile phone or iPod Touch. The best efforts have been clunky. When I take pictures, they’re seamlessly integrated with my flickr account, without the hacks that are currently required. (Sprint has done a nice implementation of this kind of integration with Picture Mail, but their Web application is awful and little used.) The pictures could also be used for picture Caller ID.
• Richer data push to the phone. It amazes me that we’re still stuck sending 160 character text messages to each other. A network-integrated phone would allow for a better experience. Want to invite someone to dinner? Send them a message which appears complete with photo, address, review and link to driving directions.
• Web access to text messages and integration with IM. When you’re at your desk, text messages come in on your IM client. Leave and they get routed to your cell phone. All of your texts are available in your mail app. The carriers are an obstacle to making this happen (text messaging is highly lucrative), but a combined Microsoft-Yahoo might be able to pull it off.
• Network control of your phone. Phone stolen? No problem, send a bullet to erase all of the data. Forgot where you left your phone? See a map of where it is.
• Local search integration. Found a business that you like? Add it your network address book for quick and easy access. Click to rate right from your cell phone.
• Location-aware presence. The option to publish location to other networks, including IM networks. More on that later.

Some variations of a few of these features, like the network address book and calendar, exist in enterprise-focused devices. Yahoo! Go is an excellent consumer application that includes features such as a flickr viewer, but without integration into the OS isn’t as great as it should be.

Microsoft’s ownership of the phone OS, deep integration of Yahoo! Go and their combined consumer audiences could be combined to create a phone that out Apples Apple.

See also:

• iPhone as your social network
• Remote control for your cell phone

ObDisclaimer: These are my personal views and do not reflect the views of my employer.

Bowing to strong criticism of Beacon, Facebook has added a universal opt out to Beacon’s data collection. This comes after making the publication of Beacon data opt in last week. The post on Facebook’s blog came from Mark Zuckerberg, the first time he has publicly addressed Beacon’s privacy issues.

When we first thought of Beacon, our goal was to build a simple product to let people share information across sites with their friends. It had to be lightweight so it wouldn’t get in people’s way as they browsed the web, but also clear enough so people would be able to easily control what they shared. We were excited about Beacon because we believe a lot of information people want to share isn’t on Facebook, and if we found the right balance, Beacon would give people an easy and controlled way to share more of that information with their friends.

But we missed the right balance. At first we tried to make it very lightweight so people wouldn’t have to touch it for it to work. The problem with our initial approach of making it an opt-out system instead of opt-in was that if someone forgot to decline to share something, Beacon still went ahead and shared it with their friends. It took us too long after people started contacting us to change the product so that users had to explicitly approve what they wanted to share. Instead of acting quickly, we took too long to decide on the right solution. I’m not proud of the way we’ve handled this situation and I know we can do better.

As I said the other day, finding the right level of friction when collecting user data is tricky. Among the scenarios that I outlined, this probably falls at 5 1/2. The partner sites are still sending the data to Facebook, but if you select the universal opt out, none of it will be published. Zuckerberg’s statement clearly says that the data will be deleted:

If you select that you don’t want to share some Beacon actions or if you turn off Beacon, then Facebook won’t store those actions even when partners send them to Facebook.

I continue to believe that Beacon has a lot of power. Now that participants are consenting to publication of the data, it’ll be interesting to see what kind of new uses occur.

Update: Om Malik is parsing the phrase “Facebook won’t store those actions.” He writes, “So essentially he’s saying the information transmitted won’t be stored but will perhaps be interpreted. Will this happen in real time? If that is the case, then the advertising “optimization” that results from “transmissions” is going to continue. Right!”

More on: facebook, privacy, social networking

The biggest challenge in collecting information from users is finding the right level of friction. Too much friction and you have a product that people won’t use and no business. Too little friction and your product turns into a privacy nightmare. Users revolt and advertisers stay away.

Frequently in the media the debate gets boiled down to “opt in” vs. “opt out.” The reality is much more complicated than that. There are many nuances between the two.

I spent a lot of time finding the right balance when I was developing social media and search products at AOL. I also have first hand knowledge of privacy disasters as one of the people involved in analyzing and recovering from AOL Search’s data release in 2006.

Facebook’s reason for existence is to distribute information about your personal life to your friends. That’s what has made it popular to the tune of more than 40 million users and a lofty $15 billion valuation. People clearly want to share their information with their friends. Facebook Photos significantly reduces the friction in viewing photos; as a result it has quickly become the number one photo sharing site on the Web.

The problem with Beacon is that it virtually eliminates the friction.

Here are a number of different ways that information can be collected and distributed, starting from the most friction to the least friction:

1. Allow people to indicate in their profile which movies, books, etc. they like. Facebook has long had a space in its profile box for people to enter this information. I suspect (based on the number of times I see feed items about profile changes) that most people touch this once when they set up their account and rarely change it.
2. Allow people to add applications that reflect their interests. Applications such as Flixster, iLike and Virtual Bookshelf are vertically focused. They reduce the friction in entering information about your interests because they tie into content-rich databases. It’s like the difference between an essay question and multiple choice. And it’s a more engaging experience — if I enter a movie on Flixster, it comes pre-populated with the movie poster, actors, director and a capsule summary. But people still have to remember to go do it.
3. Bring in information from other sites using applications. If someone is already using Yelp to write reviews or Google Reader to share interesting blog posts, bring that information in automatically. Before the launch of Beacon, I was using Yelper to import my Yelp reviews and Feedheads to import my shared items from Google Reader. This gets you a steady stream of information on what people are doing elsewhere. It requires people to find the appropriate application and then configure it. Unfortunately, not a lot of people are going to bother. Feedheads has 8,800 users and Yelper has 950.
4. Aggregate information from other sources. You can just ask people to provide their flickr name, YouTube name, etc. AIM Buddy Feeds has been doing this for more than a year. Plaxo is also doing it with Plaxo Pulse. Eliminating the application requirement increases the number of people who will participate. Still, it requires people to come into a form and connect their other accounts.
5. Ask people on partner sites if they want to send their information to Facebook. At the point of purchase, review, comment, etc. ask the user if he wants to send the information. With this approach, the user doesn’t have to manually enter account information, reducing friction. More importantly, they are making the decision at a time when they can see the impact of it. An option to “always send” for a given partner further reduces friction. There are some sources I’m happy to share information from and others that I’m not.
6. Send all of the information automatically and then ask the user if they want to publish it. This is what Facebook Beacon currently does. Facebook gets all of that data and its unclear how unpublished information is used.
7. Send all of the information automatically and publish it by default. This is what Beacon initially did, causing embarrassment for some and ruining surprises for others.

Finding the right level of friction is tricky because people have different tolerances. Most people probably wouldn’t perceive a difference between options 5 and 6, but for me, they are night and day.

This analysis doesn’t take into account development effort involved. It’s often the case that steps that improve user privacy take more time and resources to develop. You can guess what the result is.

More on: facebook, privacy

See also:

• Coke Is Holding Off on Sipping Facebook’s Beacon (New York Times)
• Facebook’s Misrepresentation of Beacon’s Threat to Privacy: Tracking users who opt out or are not logged in (CA Security Advisor Research Blog)

In a much anticipated move, Facebook has changed its News Feed algorithm. The new algorithm rewards applications that compel their audiences to interact with them regularly. Scrabulous is a great example of a winner from this change.

Under the old algorithm, you would only see News Feed items from applications that you have installed. If all of your friends loved Scrabulous, you wouldn’t hear about it except possibly when they installed the application. I find this particular feed item from Scrabulous a bit spammy because the text doesn’t reflect anything that Ben did within the application. If it said “Ben played the word QUARTZY for 126 points” it’d be a more interesting news item.

This change also helps applications that compete with Facebook core features like the Wall and Photos. They are now on a more equal footing when it comes to promotion in the News Feed.

The additional competition for inclusion in the News Feed will hurt applications like Vampires that have large installed bases because they got in on the spam-all-your-friends bonanza when the F8 platform launched.

An earlier change by Facebook allows you to vote on News Feed items. In the screenshot above, clicking the thumbs up icon indicates that you like an item. Clicking on the “X” indicates that you don’t like an item. It’s unclear whether the vote applies to the person that the item is about or the application that generated it.

More on: Facebook

TechCrunch is reporting that Facebook has changed course on Beacon, a controversial new data gathering and publishing system. With Beacon, participating Web sites sent data to Facebook that automatically appeared on your profile. For example, if you wrote a review on Yelp or TripAdvisor, the review would appear in your Facebook Mini-Feed and could appear in the News Feeds that your friends see. Other partner Web sites include eBay, Fandango and Overstock.com.

This has caused a couple of concerns:

• Users saw information published that they didn’t necessarily want published. Many people are purchasing Christmas presents and the contents of their orders were put out on their feed, ruining surprises.
• It’s unclear what Facebook does with data that users choose not to publish. Facebook still receives the information from partner sites.

Under the new direction, stories will be sent to Facebook, but will only be published when the user takes an explicit action. That addresses the first concern, but it doesn’t address the second. For all we know, Facebook could be storing that information indefinitely and using that to target ads.

Facebook is all about giving up privacy in exchange for social connectivity. I frequently provide false information when sites ask me about age, gender, etc. Facebook, on the other hand, gets real data because it’s essential to the core function. It’s a tradeoff that I make. But automatically providing transaction-level detail from any partner site is a tradeoff I’m not willing to make.

I’m perfectly happy to have Facebook distribute reviews I write on Yelp. (I was using an application called Yelper to do this before Beacon existed.) But I wouldn’t want Facebook to automatically publish all my reservations on OpenTable (OT is not a partner, this is hypothetical). If I sell an unwanted gift on eBay, I don’t want friends to know about it. Not only do I not want Facebook to publish that information, I don’t want them to get it in the first place.

The biggest problem with Beacon is that there isn’t a clear benefit to the user. It seems like a data grab primarily for marketing purposes. Jason Calacanis’ take on this is well worth reading.

Beacon has a lot of power and can provide a lot more benefit to users than it currently does. I’ll talk more about that in the future.

Update: Om Malik reports that Facebook is deleting information that users choose not to publish.

See also:

• Facebook Beacon 2.0: What You’ll See (TechCrunch)
• Facebook updates Beacon: now truly opt-in (Inside Facebook)
• Feeling Betrayed, Facebook Users Force Site to Honor Their Privacy (washingtonpost.com)
• To Save Its Bacon, Facebook Weakens Beacon (GigaOm)

More on: Facebook, privacy, social networking

A large untapped opportunity in social networks is connecting people with information they’re looking for.

I was flying home this weekend from Lake Tahoe and connected in Salt Lake City. While I was there, I updated my Facebook status to indicate that I was in Utah for the first time.

Later that night I received a message from my friend Dean:

hey Rocky, whatcha doing in the beautiful, bizarre state of UT?

I lived there for a year after AOL. Let me know if you need any tips on where to go while you are there.

Without doing a search, I had information coming directly to me from someone I knew. I was just in Utah for 90 minutes, so I didn’t need any tips. But when I go there for real, I now know to begin my search with Dean.

By distributing information needs through our network, social networks allow us to tap into a large base of knowledge from known sources.

Services like Yahoo! Answers allow you to ask questions, but Answers is largely anonymous. Too many of the answers devolve into insults and name calling and it’s hard to tell if people know what they’re talking about. There is also an incentive problem: I don’t participate in Yahoo! Answers because I don’t have enough time to answer questions for random strangers. But I’m happy to answer questions for friends.

LinkedIn’s Answers product usually delivers better results by posing questions just to your network. And because I know these people, I can easily assess the credibility of their answers. LinkedIn’s professional focus is a bit limiting; I wouldn’t pose questions about vacation plans there.

If I were really going to Utah, I suppose I could spam everyone I know with an email asking if anyone knew anything about Utah. The passive approach of updating my Facebook status is more socially acceptable.

For now, this relies on my friends seeing my status message and responding. It was more or less random that Dean saw my status message. As social networks get smarter (and get more data), the request can be routed automatically to the people likely to have a good answer. My status message could be displayed more prominently to friends whose profiles indicated that they’d lived in or visited Utah.

Marketers can also be part of the conversation. Facebook allows you to become a “fan” of a company or a product. If I become a “fan” of United Airlines, they could send me information about their Utah service or upcoming sales. I’d love to hear about any great deals to Park City this winter.

More on: Facebook, search

See also:

• Marketing on social networks
• The power of location in presence

The other day I wrote about viral marketing on social networks by getting users to engage with your products and brands. Facebook Beacon, announced on Tuesday, allows sites such as eBay and Yelp to publish your activity on your Facebook news feeds, automating this process. 44 sites in all participated in the announcement.

This is expanding what many applications already do with Facebook. Applications such as MyFlickr (pictures), Yelper (local reviews), Feedheads (Google Reader), WordPress (blog posts) and others take off-Facebook activity and publish it in your profile and feeds.

With Beacon, when you do something on a partner site — such as write a review, buy a product, win a game — that information gets transmitted to Facebook. You then have the option to publish the information on your Facebook feed. This raises privacy issues. GigaOm and John McKinley offer sharp criticism.

The big question I haven’t seen addressed is what Facebook does with the Becaon data if I don’t choose to publish it. There are brands that people would happily associate themselves with (Timbuk2), others that simply provide utility (Tide) and some that are embarrassing (Preparation H). If I buy Preparation H and tell Facebook I don’t want to publish it, do they still keep track of the fact that I’ve bought it?

With Facebook Beacon, I see the third-party sites being more concerned about the use of the data than users. If I’m Amazon or Netflix, one of my competitive advantages is the database of purchasing habits that I have. Do I really want to give that away?

More on: Facebook

Social networks like MySpace and Facebook are among the leaders in user engagement, with many users returning daily and some visiting many times a day. They’ve almost reached the same level of engagement as email* and have double the engagement of news and sports sites. Yet they present a special problem for marketers: the content is so compelling that few people bother to look at the ads.

The ads have been poorly targeted banner ads or Facebook’s “flyers.” The flyers target a specific network, but even those frequently miss the mark. I’m in the Northwestern network and frequently get ads for coffee shops near the campus in Evanston.

The future of marketing on social networks is getting users to create and distribute advertising information for you.

Two of my favorite Facebook apps are MyTech and HotLists.

MyTech is an application from CNet that allows you to publish your technology purchases. Here’s a screenshot from my profile:

My friends can see what I’ve bought and how I’ve rated it. The purchase and review appear on my mini-feed. (Facebook will soon change the rules on its news feed, allowing the review to also get distributed in my friends’ news feeds.) The Facebook platform and MyTech are enabling word of mouth well beyond the people I talk to on a regular basis. The personal connection also allows my friends to get more information on a product by asking someone they know.

Another great application is HotLists from the makers of HotOrNot. The HotLists application allows you to associate yourself with brands. Here is mine:

Who is going to associate themselves with brands?

Lots of people, if you make it easy enough. We do it every day when we wear a Product(RED) T-shirt, drive a BMW or put white earphones in our ears. On Facebook, HotLists’ statistics page shows that more than 38,000 people use the application every day; about 3.8 million have it installed.

A natural extension of the HotLists application is a brand recommendation engine that suggests brands you might be interested in based on the brands you’ve already selected.

This won’t work for all brands. I don’t see people putting Metamucil or Depends on their Facebook profile. But it can work for brands like Keen. Whenever I wear my Keens, it’s a conversation starter with other Keen fans.

My brand attributes also imbue the brands I choose. People who know how much I travel know that Briggs and Riley makes luggage that can travel a million miles.

* This is based on the general U.S. Internet population; in the college audience, social networks have likely exceeded email in engagement.

I travel frequently and have friends scattered throughout the country. I usually do a bad job of keeping track of who is where, who has moved, etc.

Last week I was in Boston. As I headed out to dinner, I updated my Facebook status:

Later that night, I got a Facebook message from a friend I haven’t seen since high school. He lives in Cambridge and wanted to get together.

Unfortunately, the message arrived after I had gotten back to my hotel.

This almost-connection was facilitated by Facebook’s social graph and status updates. Next time I’m in Boston, I know to look Chike up. Twitter, Jaiku (acquired by Google) and Pownce can be used in the same way. But none of them know geography; they require that someone look at the message and determine that Cambridge is nearby. A friend who lives in Los Angeles is just as likely to see that message as someone in Cambridge.

There are a number of companies trying to turn that missed connection into an actual connection. Among them are Loopt, uLocate and Whrrl. Google purchased a pioneer in the field — Dodgeball — but hasn’t done much with it. (Dodgeball’s founders very publicly left Google, complaining that they couldn’t get engineering resources.)

Although the details vary based on site, you can publish your location from the Web or a cell phone. You can also see where your friends are on a map. I could have checked a map before I headed to Cambridge to see which of my friends were nearby. Some services will even alert you when a friend is nearby.

More on: location-based services, maps

Disclosure: I have a consulting relationship with uLocate.

Google has added a profile page for its My Maps and local reviews products. The profile page allows users to roll up their maps and reviews onto one page. Here’s a screenshot of my profile page:

In addition to links to the reviews and maps that I’ve created, there are a few fields to tell people a little bit about myself. It’s not as robust as Yelp’s profile page, but it shows the beginnings of a social bent to Google’s local properties.

Among the things I’d like to see:

• People-friendly URLs. The URL for my profile page is http://maps.google.com/maps/user?uid=110282169465175925759&hl=en&gl=us. On Yelp, my URL is http://rocky.yelp.com.
• The option for people who use my maps to leave comments. The feedback options on flickr and Yelp are important drivers of continued participation; if I hear from people who find my work useful, I’m more likely to contribute.
• A Facebook application that distributes my maps and reviews to my friends. Google has already released a Google News application and a third party has created a Google Reader app.

More on: Google, maps