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Monday 8 October 2007

Facebook - Changing the Web

Here's a great overview and insight into how Facebook (moreso than other social networking sites, because of it's "application platform" model), is changing how we do things on the Internet.

The Facebook revolution

The Internet megahit may be growing into the biggest, most valuable database in the world.

By Fred Vogelstein, October 7, 2007

When I first met Mark Zuckerberg, he seemed as much a visitor to his surroundings as I was. It was earlier this summer, in Facebook's boardroom in Palo Alto, and it was clear Zuckerberg hadn't spend a lot of time there. He wondered aloud to his media aide why we were meeting in such a big and off-putting formal space. His comments caught me off-guard. I expected a guy who has become as rich and famous as Zuckerberg to more fully embrace it. And then I thought, "Of course he feels awkward about his surroundings. He's only 23 years old."

It's been like that from the beginning for Zuckerberg. Ever since he started Facebook out of his Harvard dorm room four years ago, he has been scrambling to keep up with epic growth in his and the company's fame and fortune. The last year has been particularly remarkable. Users have quadrupled while employees and revenues have tripled. Zuckerberg was mocked briefly in 2006 for turning down a near $1-billion buyout from Yahoo. Now, there is talk that Google and Microsoft both want to buy a chunk of or all of Facebook for a valuation north of $10 billion. Meanwhile, in bars and at cocktail parties, Silicon Valleyites ask. "Do you think he's more like Steve Jobs or Bill Gates?"

Another round of Silicon Valley hype, you say? Perhaps. It does defy a certain logic that a 23-year-old might be worth -- based on his 30% stake in Facebook -- $3 billion. But the facts are these: Facebook is the hottest social networking company on the planet right now. And two very smart companies -- Google and Microsoft -- along with most of Silicon Valley believe that Facebook, or its kind of technology, is going to completely change the way you use the Internet in five years. Is that worth $5 billion? $10 billion? $15 billion? I don't know, but I know it's worth a lot.

When I first met Zuckerberg, I hadn't figured that out. Sure, MySpace -- owned by Rupert Murdoch's News Corp. -- had more than 100 million users, and Facebook had 40 million. But these were all teenagers sharing party pictures online, right? At their best, the two websites seemed like a more technologically advanced version of Internet chat rooms. At worst, they were a hangout for scammers and sexual predators.

It turns out that Facebook's reputation as a teen site, at least, is fading fast. The fastest-growing age group on Facebook is over 35, representing 11% of its users. And it is clear from talking to Zuckerberg that he thinks everyone on the planet can -- and should -- have a Facebook page. His vision is Googilian? Microsoftian? Intergalactic? Choose your word. He wants Facebook to become the biggest, most valuable database in the world -- the database of human likes and dislikes or, as author John Battelle likes to say, "the database of intentions."

If you don't know what a Facebook page is, well, that's what it is: Your contact information, your picture, an e-mail in-box and a compendium of your likes and dislikes, all -- and this is critical -- verified by your friends and typically only viewable by them. You can easily create a fake identity on Facebook, or a real identity with fake credentials. But you either end up with no friends or get called out for lying. This is a big distinction between MySpace and Facebook -- for the moment.

You can't change the look and feel of your Facebook page as much as you can on MySpace, but since May you can do something much cooler: choose from a giant list of free, non-Facebook-produced programs that will run inside your page the same way Microsoft Word and Excel run on your PC. There are more than 5,000 to choose from. Zuckerberg and Facebook don't have to anticipate all the things Facebook users want to do with their pages, but instead will let them bubble up from the global marketplace of ideas. Two of the most popular -- iLike and Movies -- allow users to know what music, concerts and movies their friends like best. Another, Causes, makes it easy to tell your friends the causes you care most about and solicit donations.

It all sounds way too complicated for mortals to understand until you hear Zuckerberg explain it. Boiled down, it goes like this: Humans get their information from two places -- from mainstream media or some other centralized organization such as a church, and from their network of family, friends, neighbors and colleagues. We've already digitized the first. Almost every news organization has a website now. What Zuckerberg is trying to do with Facebook is digitize the second.

Think about what this means. Right now, the interactions among friends, neighbors and colleagues -- a.k.a. word of mouth -- is still analog. You go to a cocktail party, and a friend tells you about this incredible pediatrician he's found. You ask a few other friends to confirm that data and eventually two things happen: You switch doctors, and the physician becomes a favorite in town. Now imagine that information automatically pushed out to all your friends, tested, verified and returned to you in 24 hours, and you have Zuckerberg's vision for Facebook.

Zuckerberg doesn't think we'll stop getting our information hub-and-spoke-like from big news organizations. But he does think that news about Mom's surgery or Dad's latest trip will get to friends and relatives faster and play a more prominent role in our lives. Zuckerberg is often quoted saying, "We're not trying to help you make new friends online. We're just trying to help you digitally map out the relationships you already have."

The kinds of information one can push through a digital web of family, friends, neighbors and colleagues -- properly segmented -- is endless and powerful. For instance, because I have a Facebook profile, I already know what books, magazines and newspapers my friends read, what websites they frequently visit, what music they listen to and what TV shows and movies they like. Many executives I know "google" and "facebook" job candidates before they arrive for an interview.

Down the road, I imagine that if I'm burglarized and put that on my Facebook page, every one of my neighbors -- and the police -- will know that too. I know bloggers who use Facebook to automatically tell their readers what's on their mind by having Facebook keep track of the books and articles they read every day. They do that in addition to posting mini-essays, photos and movies. There is already lots of talk about how someday our Facebook page, or something like it, will serve as our universal identity -- where hospitals can go to check our health insurance, where banks can go to check our employment and credit-worthiness, even where the Internal Revenue Service can go to find our tax data.

Zuckerberg and the 200 Facebookers he has working for him have only just begun thinking of ways to make money from all this information. But it's pretty clear from talking to him and his executives what they have in mind. What corporation or politician wouldn't die for a look inside Facebook's developing database of consumer likes and dislikes?

For companies like Google and Microsoft -- really, any corporation -- it's not clear what is scarier, the idea that another company would administer this "social graph," as Zuckerberg refers to our web of relationships, or that we, the users -- and not them, the corporations -- would control our data. They've bet their future on being the center of their customers' universe, either through a search box and various other online offerings that Google has, or through Windows, Office and the growing online offerings that Microsoft has. If we, the users, through our Facebook page, become the hub, and they, the corporations, our spokes, the idea that we once worried about Microsoft's monopoly or, as we do now, Google's growing power in online advertising, will seem very silly indeed.

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