March 6, 2009

An oversight on 'Social Networks over-valued?'

Just a quick update, I forgot to make a mention on my last blog about our reliance on advertisements – so I will keep this entry quick!

The social network QQ from China earned $523 million in revenues for 07-08, four times that of Facebook. Interestingly, only 13% of their revenue came from advertising – most of it came from Games and Mobile Services.

Perhaps this is where our Social Networks should be looking? It is funny how alot of Western businesses place advertising as their primary source of income where the rest of the world choose to innovate.

February 9, 2009

Facebook Connect – A few concerns

I have been wondering what to write for my first entry on this new shiney blog. I considered importing some of my favourite old blog posts but thought that a little cheap; it is something I will do in time. Then my brain kicked in and I thought I would start with some concerns I have over Facebook Connect, the new service from Facebook. I was researching this service with the scope of Innovative Business for an academic paper. I won’t bore you with the lengthy piece but a few things still bug me about the service they are running.

  • Firstly, we are heralding this as ‘new thinking’ and ‘innovative’, yet I can’t help but think this is a power grab. Widespread adoption of the Connect service makes Facebook the de-facto login standard on many websites, giving it a little too much power. Could this stop some users from joining non-connect affiliated websites?
  • Connect may provide Facebook with the ability to track external user movement and thus better target ads. I’m all for well targeted ads but this raises many privacy concerns (and Facebook are not known for their strength in user privacy).
  • I also worry because Facebook has a history of bullying smaller companies (see the case against Brazilian ‘Power’). Power allowed people to view snippets of Facebook feeds on the Power website. Facebook claim this caused irreparable damage and can steal user bases (yet ironically, Facebook gains many users via automatically inviting Gmail / MSN friends). Jumping to litigation was their first response with Power – can smaller companies adopting connect afford that?
  • Facebook has also recently become prominent in OpenID by joining the board. It will be interesting to see how this plays out, they really are competing services. We can talk about cooperation all we want, if Facebook users adopt OpenID (with its current structure) Facebook loses money!

With all of these criticisms being aired, I am not totally against Connect. It is a great service and hell, I have even implemented it on this blog. However, with Facebooks reputation for poor privacy controls (remember Beacon?) I do worry about the long term direction..just a little!