[ This is my personal blog so all opinions expressed here are mine. I am a product, scalability, operations and monetization advisor and currently employed as Director of Business Operations & Technical Strategy for a top 50 website that delivers billions of page views per month. I was a keynote panelist for Scaling Up or Out keynote at MySQL Conference and speak regularly at conferences and user groups.
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Interesting study showing that the size of personal network remains stable over the years though “half of all friends” are replaced every 7 years.
“The results showed that personal network sizes remained stable, but that many members of the network were new. About 30 percent of discussion partners and practical helpers had the same position in a typical subject's network seven years later. And only 48 percent were still part of the network. This finding goes against previous research which had showed that social network sizes are shrinking.”half of all friends are replaced every 7 years
LinkedIn has raised $53 million valuing the business social network at over a billion dollars. In the video below, you can watch LinkedIn investors including David Sze (Greylock Partners), Jeffrey Glass (Brain Capital Ventures), David Cowan (Bessemer Venture) and Mark Kvamme (Sequoia Capital). Jeff Glass will join LinkedIn's board.
I got a chance to meet Adam Nash (Sr. Director of Product and Engineering of LinkedIn) at Graphing Social Patterns. What I liked in his presentation was the fact that LinkedIn is not trying to be everything, instead focusing on its core market: business networking.
“My back-of-the-envelope calculations show that if your user the value per subscriber of then LinkedIn’s $1 billion got a market valuation. On per-subscriber revenue basis, LinkedIn seems a tad overvalued, especially considering that their traffic is range bound, and the number of active uniques is showing a slight slump.”- Om Malik (GigaOm)2
Some say we are in a bubble but the bubble is here to stay, at least for some time. If Facebook is valued at $15 billion, why can't LinkedIn, one of the rare breed of social networks in the sense that it is profitable, be valued at a billion. Go LinkedIn!
Among other things, Benjamin focused on ARFU (average revenue from users), sticky features, business models, page views growth, services, revenues and profits for various social networks. Very interesting presentation.
If you missed Graphing Social Patterns East this year, make sure you go to the next year one. You may also want to check out Graphing Social Patterns West happening in CA later this year. Otherwise, you'll be missing a lot.
Following Slide, RockYou! has raised an impressive $35 million in Series C funding led by DCM venture capital firm. RockYou! is now claiming that their reach is bigger than Slide.
Today I came across a sneaky but very smartly implemented social history javascript. By embedding this javascript and making a few simple calls, you can find out if a visitor to your website or blog has visited a particular URL in the past. It does it in a very smart way (I'm not saying anything about whether the purpose of the script is right):
“By using a cute information leak introduced by CSS. The browser colors visited links differently than non-visited links. All you have to do is load up a whole bunch of URLs for the most popular social bookmarking sites in an iframe and see which of those links are purple and which are blue. It’s not perfect (which, from a privacy perspective, is at least a little comforting) but it does get you 80% of the way there. The best/worst part is that this information leak probably won’t be plugged because it’s a fundamental feature of the browser.”
“ * One potential issue that makes social networks resist data portability is the monetizability of the data * Not all user data is created equal, there’s interest versus intent * Social networks generally produce lots of low-value interest data, which has weak ROI attached to it * Search engines, review sites, comparison shopping, etc all produce high-value intent data * Even if you have the data, you have to worry about whether or not you have enough of it to matter - although ad networks and exchanges have started to alleviate that”
A friend of mine recently introduced me to Buddy Media, creator of several popular social networking applications and games including AceBucks, Mental Blocks, Sudoku, Pirates vs. Ninjas, Vampires vs. Werewolves, Cops vs. Robbers, Air Hockey and Pub Darts.
Launched in 2007 by Michael Lazerow, Kass Lazerow and Aryeh Goldsmith, Buddy Media also offers application development services for social networking websites. At the time of writing this post, Buddy Media claims that they reach more than 8 million Internet users every month.
Buddy Media also claims to "build an application and drive 1 million users in just a few months" for its clients.
That's a very ambitious claim to offer publicly.
“Buddy Media approves each developer to certify that only developers working on engaging applications can leverage Buddy Media’s sales engine. Our main focus at Buddy Media is not to aggregate the most amount of inventory in the social media space. Frankly, there’s already too much social media inventory. Add together the traffic from MySpace, Facebook, Bebo and the other social networks, social applications, blogs and more, and you get to trillions of impressions a month! We’re only focused on helping developers of quality applications make more money from their apps with access to higher-paying advertisers who value targeted, premium reach.” - Source: Buddy Media Blog
However, the applications created by Buddy Media was not the reason my friend introduced it to me. Instead the reason was Buddy Media's new social media ad network called Buddy Media Advertising Network.
Targeting: Buddy Media allows advertisers to target their ads by age, sex and location. In future more targeting options are expected to be available according to BM website.
Pricing: Buddy Media offers several pricing models including CPC (clicks), CPI (installs) and CPM (impressions). Performance based pricing model is available to a select few marketers.
Creative: Advertisers can either use their existing creative or create new ones using Buddy Media's provided system.
Where ads are shown?: Advertising campaigns delivered through Buddy Media's advertising network reach applications created by an "invitation only" developer network and deployed on various social networking sites including Facebook. Advertisers are offered "visibility into the apps" on which their ads are displayed.
Clients: Buddy Media's clients include Microsoft, FedEx, Anheuser-Busch, Priceline, Readers Digest, Time Inc. and Huffington Post.
Funding: Buddy Media recently raised $6.5 million in series B financing round led by Softbank Capital, European Founders Fund and GreyCroft Partners. Earlier Buddy Media had raised $1.5 million.
Overall Buddy Media seems to promise high ROI and quality exposure for campaigns by carefully choosing developers that create engaging social media applications.
While Buddy Media may be able to create great exposure for brand advertising, I remain skeptical on the short-term immediate conversion part. After a while it is very easy for users to become immune to ads that are embedded in widget or applications.
How many times have you clicked on an ad within your favorite Instant Messenger or similar application that shows ads while you chat?
Userplane, the company that offers free chat solutions based on an advertising-revenue sharing model, embeds ads in their chat client. Yet I can bet that users who use Userplane's application remain involved in their conversation and end up becoming immune to advertising that is present.
The world of widget-embedded advertising is about to get very crowded with Slide and Rock You, among others, working on similar advertising networks.
From a user point of view there is one interesting thing going on here. Widget companies are getting access to the user's data based on the application they developed and then creating new business models and applications based on the information that's passed back from social networking websites.
Only time will tell where Buddy Media can take their current targeting offerings.
I came across a post written last year by Dave Winer. In it he talks about the importance of interconnected social networks.
“Closed systems are fine in the early stages of a new technology. They're the training wheels for a new layer of users and uses. But, as we always see, the training wheels eventually come off, explosively, creating new systems that throw out the assumptions of the old.” Dave's wishes, to some extent are getting fulfilled by Google Friend Connect and Facebook Connect: Two services that attempt to make social graphs portable.
“Eventually, soon I think, we'll see an explosive unbundling of the services that make up social networks. What was centralized in the form of Facebook, Linked-in, even YouTube, is going to blow up and reconstitute itself. How exactly it will happen is something the historians can argue about 25 years from now. It hasn't happened yet, but it will, unless the rules of technology evolution have been repealed (and they haven't, trust me).”
A Morgan Stanley team consisting of "Queen of the Net" Mary Meeker, David Joseph and Anand Thaker recently did a presenation on Internet Trends.
The presentation focused on the topics of usage patterns, social networking, widgetization and componentization, measurability and transparency, customer satisfaction, video, monetization, mobile, emerging markets and last but not least, recession.
According to the presentation, consumer IP traffic will surpass business IP traffic in 2008 as consumers use more than 5,000,000 TB of data per month. Since 2005E, there has been a 58% CAGR in IP traffic.
"The surge in online content is at the center of the most dramatic changes affecting the Internet today. In three years' time, 20 typical households will generate more traffic than the entire Internet today."
"Fifteen years ago, enterprise technology was higher-quality than consumer technology. That's not true anymore. It used to be that you used enterprise technology because you wanted uptime, security and speed. None of those things are as good in enterprise software anymore (as they are in some consumer software). The biggest thing to ask is, 'When consumer software is useful, how can I use it to get costs out of my environment?'"
Douglas originally gave this quote in a WSJ interview while answering the question, "What's driving the "consumerization" of tech in the enterprise, where companies are borrowing tech ideas from the consumer Internet?"
Massive Transition in Available Ad Units This part of the presentation shows massive decline in the number of page views Yahoo! used to enjoy since 2002. At the same time the Alexa graph comparing Yahoo!'s page views to Google, Facebook and Youtube shows interesting patterns. Specifically YouTube's rapid rise to become the #2 destination on the Internet. This slide also touches on an important point that Supply of ad units is now greater than demand. An important thing to note is that Alexa changed their ranking algorithm recently. The latest Alexa graph for these sites doesn't go back to 2002, however it tells a slightly different story:
- Page views wise, Yahoo! is still number 1, followed by YouTube, Google and Facebook. - Reach wise, Google is number 1 followed by Yahoo!
Social Networking Characteristics - Fast Growth and Low Penetration
Next slide has a graph from from comScore's "Digital World: State Of The Internet" report which highlights growth in Emerging Internet Markets. The graph shows very fast growth for social networking sites but at the cost of low penetration. In contrast, the online search sector showed very high penetration but low levels of growth. Online personals, retail movies and Retail music industries depicted significant decrease in growth. Multimedia, on the other hand, shows decent growth but much higher penetration than social networks. Visitors growth to community focused sites that aren't social networks also decreased although these sites still have a strong penetration (even stronger than social networks).
Some other interesting findings from the comScore report that weren't in the Morgan Stanley presentation:
more than 300 million Internet users from Asia Pacific region, 15 years of age or older, were online in January 2008. This shows an increase of 14 percent over 2007 numbers (compare this to 10.4% increase in worldwide users). According to comScore, this increase "makes Asia Pacific the largest of the five worldwide regions"
Latin America and Middle East-Africa are two other regions that have also experienced "above average audience growth" since 2007. Latin America experienced 16.6% growth where Middle East-Africa experienced 20.2% growth, the highest percentage of growth among five worldwide regions.
US online audience now only represents 21% of worldwide Internet users.
Visits to social networking sites by global Internet users increased 34%
approximately 2 out of every 3 Internet users now visit a social network site with total visitors to social networking sites exceeding 530 million
MySpace and Facebook both now attract more than 100 million visitors per month
YouTube leads the way in online entertainment. Video is now the "dominant online entertainment format." More than 250 million visitors visited YouTube in January alone.
Social Networking Sites Gaining Significant Share of Online Traffic The next presentation slide highlights new entrants in the top-10 list of Alexa as well as top-10 sites of 2005 that have lost significant traffic. The sites that lost their top-10 ranking since 2005 include ebay.com, amazon.com, microsoft.com (not counting Microsoft Passport), google.co.uk, aol.com and go.com.
The new entrants in the top-10 list as of 2008 (based on old Alexa ranking model) included youtube.com, live.com, facebook.com, hi5.com, wikipedia.org and orkut.com. If the ranking list was a top-15 list, my employer would have been included at number 13.
How People Worldwide Spend Their Time Online
22% time is spent in online communication
16% time is spent in social communication. The presentation makes a note that this category didn't exist 3 years ago.
8% time is spent in online shopping activities
14% time is spent in entertainment and leisure activities
6% time is spent in work, business and education activities
Another interesting point made by the presentation, although no surprise, is that younger users (aged 15-24) tend to communicate more via Facebook whereas older Internet users (aged 44+) tend to use Yahoo! Mail more to communicate. The presentation raises the question whether email is becoming more archaic.
Comparison of popular sites
Facebook (#4 in global minutes) has experienced most growth (305%) since last year reaching 101 million members according to comScore. YouTube (#3 in global minutes) had the second highest growth (94%) with a total of 258 million users. Other two sites mentioned are PayPal and Skype, both eBay properties.
Two interesting facts about YouTube that I didn't know: A very high number of YouTube visitors (51%) visit the site weekly and half of the users "watch all videos to the end"
What is the most important source of Information?
Citing a study titled "Online World As Important to Internet Users as Real World?" conducted by Annenberg School for Communication , the presentation makes an important point: personal and online sources are two most important sources of information, and together they are the "essecnce of a social network."
The original report by digitalcenter.org also says that "online communities are a catalyst for connection and activism" and that "involvement in online communities leads to offline actions. More than one-fifth of online community members (20.3 percent) take actions offline at least once a year that are related to their online community." The original report also states that online activism is making online users get involved "in causes that were new to them when they began participating on the Internet" and that "more than 40 percent (43.7 percent) of online community members participate more in social activism since they started participating in online communities."
Another interesting point is that according to the Digital Future Project, Internet users 17 years of age or older trust Internet more (80%) than personal source (73%)
Some other important findings from USC-Annenberg Digital Future Project's report:
64.9 percent are involved in new causes
43.7 percent now participate more in social activism
56.6 percent log in to their community once a day
70.4 percent of community members "sometimes or always interact with other members of their community while logged in"
7.4 percent of American Internet users maintain a blog
23.6 percent of Internet users now post photos online. Previously only 11 percent were posting photos online.
12.5 percent of users now maintain their own website.
Internet users meet an average of 4.65 "friends online whom they have never met in person" and 1.6 "friends met in person whom they originally met online"
Facebook growth
Next, there are some metrics from Facebook's growth. Some highlights
as of 03/08 there were more than 14 million photo uploads a day being uploaded to Facebook and 6 million active user groups on Facebook.
there are 55,000 total networks (partitions?/shards? :) ) and 50% of the networks are outside of college. I wonder how many networks are location based?
Segment of users who are 25 years or older are the fastest growing segment. No surprise for me as my mother in law just joined Facebook.
There are more than 250,000 new registrations per day since January of 2007.
There are more than 859 million installations of 20,000 applications
Super Wall by Rock You! is the most popular application with 28 million installs on Facebook followed by Top Friends (26 million installs) and Fun Wall (25 million), both by Slide
Both Slide and Rock You! have 3 applications each in top 10 applications.
Facebook's own Video application is ranked #7.
Reasons for Facebook growing faster than MySpace
advertising that is considered less intrusive
news feed that is personalized
UI that is cleaner
friends section that receives more prominence
ads that are more personalized
more applications
more mobile friendly
facebook focusing more on monetizing word-of-mouth and conversations
The presentation titled Internet Trends is available on Slide Share, thanks to Tech Crunch.
Reid Hoffman, Chairman and President, Products at LinkedIn, talks in this business and marketing keynote, presented at Graphing Social Patterns 2007, about the Business of Facebook Applications.
He addresses five themes:
Social Networks and Platforms What makes social networks, platforms? What sets Web 2.0 social networks apart? Is Social Networking a feature, an application, or a platform? He talks about Friendster being referred to as Match.com but with a friends list added on top of it and for that reason it was considered a feature. He credits MySpace allowing the ability to "hack in 'widgets'" as the start of social network as a platform. He clarifies that according to his understanding it wasn't a 'deliberate design decision' by MySpace but rather an 'artifact of their platform' that didn't turn off or filter javascripts. This by accident lead to a 'robust ecosystem' through which users were including rich media etc. Ning then created a 'different conception of social networking as a platform,' allowing users to build any kind of social network. Facebook then 'launched the first platform on a large social graph.' Facebook applications could then rely upon the social graph in order to build.
He believes that social networks are platforms and has invested in several different social networks.
What makes a social network interesting? What creates a robust and interesting environment? "The key thing is that a social network takes patterns of important relationships we have in real life and then pus them on the web in ways that empowers important applications." People still care more about their offline world so if you can "import the relationships that matter to people here and make them available to [either] generate thin or light app yourselves which most of these networks do or provide them as a platform for other people, it actually enables applications that can really change people's lives"
The key elements 'from a sociological perspective' of Facebook's platforms are "extending functions of profiles, communications and messaging and the newsfeed." He goes on to say that Facebook's newsfeed is an example of many to many messaging. Then, you can 'integrate general web applications with data, relationships and communications'
He then goes on to contrast and compare several social networks including Facebook, MySpace and Ning. Facebook offered developers a massive social graph that allows them to acquire customers, leverage key relationships and leverage existing communication scheme. With Ning, although you can build your own social network feature wise, you are also left to build your own user base. For developers the key thing was that if they built something Facebook could get them in front of millions of potential customers. An example of leveraging existing communication scheme is that most Facebook apps have spread through messaging or emails or through newsfeed.
The remaining four themes of the video:
- Social Networks and Professional Networks - One graph to rule them all? - Facebook Platform: some of the opportunities enabled - What does the social platform mean for the evolution of the web?
