Yesterday Facebook announced the launch of Facebook Connect and with it the opportunity for sites around the web to easily integrate into the largest “social graph” on the web. The pre-f8 hype along with MySpace’s Data Availability initiative and Google’s Friend Connect program ended up muting much of the buzz that was intended for Facebook Connect. Whether or not it was buzzed about, Facebook Connect could have a substantial impact on the future of the web as Om Malik points out.

I agree with Om and I think that Facebook Connect could truly be game changing. As many industry thought leaders were saying last night at f8, Facebook Connect is the alternative to OpenID. It’s also the first time that mainstream users will understand the power of an OpenID-like system, something that only geeks previously understood.

Mike Arrington previously suggested that there is currently a land grab for user identities by becoming the largest OpenID issuer. I agree that there is a land grab for user identities on the web but OpenID may not be the answer that many thought leaders were hoping for. Instead Facebook, MySpace and Google are all racing to create their own standards which are essentially abstract OpenID copycats.

I fully support the concept of Facebook Connect aside for one thing: I don’t have access to a user’s personally identifiable information. As a business implementing an OpenID system I at least get a user’s email when they register for my site. This contrasts Facebook where all I know is what a user’s friends Facebook IDs are. Theoretically, in a worst case scenario Facebook could switch all users’ Facebook IDs to protect user identities.

This would leave all the businesses without a way of reaching out to their user base that registered via Facebook Connect. One of the most valuable assets that large web companies have are user email addresses and phone numbers. It provides the companies with a valuable marketing potential. Now Facebook will force me to contact users through the Facebook API.

Am I going to rely on Facebook’s algorithm to arbitrarily decide how many emails I can send out every day to my users? If I want to spam my registered user base I should be able to. It’s my own business decision. So while I’m all for Facebook becoming the center of my identity online, I’m not cool with Facebook telling me how I should run my business outside of their finely pruned walled garden.

I gave a pretty thorough overview of the Mark Zuckerberg keynote over on AllFacebook earlier today. If you missed it and would like to listen to the audio version, I’ve included the podcast below. Some of the audio is not that loud but it should come through clearly. I’ll be posting more podcasts over the coming hours. Stay tuned!

 

 Mark Zuckerberg f8 Keynote [82:46m]: Play Now | Play in Popup | Download

I’m live at f8 at the Design Center in San Francisco, California. I will be providing live updates, podcasts and video of the entire event. If you would like to see the live blog of the Mark Zuckerberg keynote you can read it on our other site AllFacebook.com.

Driving in my car today I came to the realization that the current race of the social platforms is still to own my contact list. How I got to this conclusion is slightly abstract but let me explain. Over the weekend I began using an amazing application called Remember the Milk. The application is a web based to do list. Not remarkably innovative in terms of their technology but what makes them so valuable is their accessibility.

Within a day I had installed a Firefox extension enabling me to place my to do list within my Gmail inbox and access it via my iPhone in an easy to use format. Now there is no syncing for my to do list anymore. It is simply always there with me and always updated. Have you ever thought about all the other things you constantly need to sync?

Building My Contact List

If you lose your phone, often times you lose your complete contact list. If you are one of the lucky ones that has a smartphone and has synced their device to their computer, you will be able to recover from your loss. What if I never needed to worry about any of this information disappearing ever again? Technically I can, thanks to Facebook.

I simply load up my Facebook application and there are all of my contacts all with updated contact information that they’ve updated, not me! This idea is not a foreign one to many who remember Plaxo but the problem with Plaxo was that they spammed your internet to get to your contacts. Facebook has instead developed a platform where so much interaction is taking place between your friends and family, you cannot avoid joining.

Facebook is the first company that has realized the most important feature of their platform is to enable people to track and group their contacts. Today I track my contacts via multiple sources: my Blackberry, my laptop, my iPhone, Salesforce.com, Facebook and LinkedIn. The only things that are occasionally in sync are my laptop and one of my mobile devices.

Contrast that with my to do list in which I am always in sync and can access anywhere. While Facebook has a platform for applications, I would argue that their “killer application” is still their ability to track your contacts, group them and have granular privacy features for each. Soon enough, any system that you grant access to will be able to call the Facebook API and get your contacts to improve your experience with the software or device you are interacting with.

Rather than tracking all of my contacts in Salesforce.com, it would be easier to track sales information about specific contacts. This includes things like: when did I last contact this person, what was my communication history with that person, etc. In their current form, “social platforms” exist as websites in which companies can build applications like games and dating apps.

I think that the existence of “social platforms” as websites in which we spend a large portion of our time on is simply a facade. Right now these platforms have enabled us to “waste time” and peer into our friends lives but during all of this time being wasted we have slowly build a more efficient version of our individual “social graphs”.

The Future for Facebook

Now was Facebook simply designed as a really elaborate scheme just to get all of my contacts? Perhaps but at some point the company got diverted. Users don’t want complex tools. They want simple ones that make their lives easier or more enjoyable. Just as Remember the Milk simplified my task list, Facebook could easily simplify my contact list and suddenly become the center for managing our contacts.

Is such a tool worth $15 billion? I’d imagine so if you have the majority of the world’s population in your database. If a large portion of the world’s information (which Google has attempted to index) is worth around $165 billion today, Facebook should easily be worth a 10th of that. How about photo storage, video storage, application hosting and payment processing?

I see those as separate entities for Facebook. The most important feature is the contact list. And as for the other social platforms, where do they fit in? I would suggest that most of the other platforms have a chance at competing but not even MySpace has an accurate representation of my social graph. Ultimately, the most valuable thing to the social platforms is the contact list.

Without an effective contact list, these platforms are simply another distribution channel for content. While that’s not a bad place to be, it’s a completely different focus.

Last month Facebook released the first version of mini-feed comments. I claimed that it was another step for Facebook toward FriendFeed functionality. Apparently not enough people were commenting though because Facebook has since made a slight change as MG Siegler pointed out yesterday. Rather than displaying a plus sign which potentially didn’t signify “comments” for some users, so Facebook has decided to go ahead and spell it out.

Ultimately this is an extremely small change but if Facebook users aren’t commenting on mini-feed stories, perhaps the concept of FriendFeed is just a bunch of Silicon Valley hype. Personally, I think it’s a little hype combined with great functionality. I think what Facebook is instead missing is comments from their main feed. Most users don’t spend a lot of time navigating their friends mini-feeds (as far as I know).

Conversely when a user first logs into Facebook the first thing they see is newsfeed items. Rather than going to a user’s profile and posting on their wall about a news story, it would be easier simply to comment directly from within a news item. Even with good design, it may be that users simply don’t want to comment on each others’ news stories. If that’s the case, FriendFeed is officially a bunch of hype and will remain limited to an extremely small group of users.

I don’t think that’s the case though. Do you think FriendFeed is more hype then actually being useful? Are you a regular FriendFeed user? Do you comment on peoples’ mini-feeds in Facebook?

It’s no secret that among social platform developers Facebook still reigns king. On MySpace though, while there may not be top applications like Top Friends which has close to 38 million installs on Facebook, the top application has over 6 million installs which would rank it among the top 30 applications on Facebook. As Ian Swanson said in my podcast with him last week, he has been seeing the MySpace platform gaining traction.

Additionally there is buzz that MySpace will soon begin adding features that help applications grow virally. Initially there were a lot of restrictions in place but as the restrictions decrease, applications are experiencing more traction. This strategy contrasts Facebook’s in which the platform was completely viral and there were no restrictions on viral growth. Over the past year, Facebook has placed an increasing number of restrictions on developers.

In my opinion this will help MySpace build more positive relationships with developers. While it took some time for the platform to gain traction, MySpace is increasingly become a platform that can compete with Facebook when it comes to reach. While the types of users differ across both platforms it is clear that the MySpace platform has become a viable competitor to the Facebook platform.

The quality of applications are also increasing. Just last night I was playing a flash version of the extremely popular Guitar Hero game. The application has attracted over 160,000 users and the quality is pretty damn good. I spent a good 30 minutes trying to improve my skills. While it’s not as good as the real game it is definitely a fun time.

As the MySpace platform matures I’d expect to see higher quality applications appear and a growth in the application install base. What has your experience been with the MySpace platform? Do you even use MySpace?

As each new technology pops up that promises to help me connect more efficiently with my friends, I have begun to wonder what I’m really seeking with each new product. Am I aiming to streamline my communication processes as much as possible so that I can increase the number of people I’m having it with? Am I’m simply an early adopter that wants to check out the newest shiny object?

Most likely all of these things apply to me, but what I’ve begun to notice is that I am really using all of these tools for the purpose of social discovery. Social discovery is simply one method of finding content in this limitless sea of content we call “the internet”. It is increasingly my preferred discovery method as I have found a vast network of individuals that share similar interests.

To understand social discovery I think it is more important to understand the activities that we are engaged in when using the internet. Ultimately, all internet usage is simply the transmission of media. Occasionally we transmit other information used for purchasing physical good but the discovery of those products and services involve the transmission of media.

New Media Lifecycle

Over the past few years I have become increasingly active in all phases of what I now define the “new media lifecycle”. All of these “tools” that new technology companies are creating are for the most part trying to make at least one phase of this cycle more efficient. I define the new media lifecycle as the stages through which new media typically flows. Not very complex!

To expect new media to flow in any continuous direction is ludicrous but I have found there to be three stages that new media flows through. I think determining a starting point of new media is the same as determining what came first, the chicken or the egg. As such, you could enter the new media life cycle at any point during one of the following three phases:

1. Content Creation - Audio, video, text and images are all types of content that is produced in new media. In contrast to days of old, media can now be produced by anybody, not just the large media companies.
2. Content Discovery - Discovery is probably the most important phase of the lifecycle for technology companies as they are the ones developing the tools for discovery.
3. Content Consumption - Content can be consumer in practically an infinite number of ways. The consumer is the one that chooses the medium they prefer. It can be mobile phones, computers, televisions, stereos or a number of other mediums.

One other important thing to note is that there is no requirement to be part of the content creation phase as a consumer. Soon enough content creation will be an activity that practically every consumer engages in whether they like it or not. Their activities will automatically dictate the creation of content. For now though, it is still possible to simply watch what is going on.

Social Discovery

I think social discovery is one of the most fascinating parts of the new media lifecycle because we are so early in determining the most efficient way of social discovery. Search has now been dominated by Google and while new companies attempt to attack what is increasingly becoming a monopoly, most companies have realized that the space of social discovery has yet to declare a winner.

What is social discovery exactly? Well social discovery is the usage of social tools to find relevant content. A social tool is a system which enables the sharing of content with other users. That content can be as simple as the activities users are engaged in such as “Nick just played MouseHunt on Facebook” to the modification of my social profile to the sharing of a video, image or song that I thought was good.

Some have suggested that the current battle on the social web is over the most efficient newsfeed. I think it should be framed instead as the battle over making the most efficient social discovery tool. Feeds are simply one way of displaying content. It may very well be that feeds are the most effective way of displaying that content but I think this is still up for debate.

Over the past few weeks as my digital social activity has become stretched across FriendFeed, Twitter, Plurk, Facebook and other places, I have begun to ask myself where the real value is in any of these things. The reality is that a valuable community that I feel connected to is most important. As we strive to build new technologies that help us connect more efficiently I think in the end all that matters is the community.

Email continues to be an extremely basic form of communication but what makes it so powerful is that I can access anybody via email. Even though it helps, it doesn’t really matter if your technology is the most efficient. What matters more is that your technology has a community backing it. As the early adopters chase after the latest shiny social object trying to dissect the pros and cons of each feature, I’d wait to see where the real communities form.

In my own opinion, while social discovery has yet to be monetized effectively, social discovery currently provides the greatest opportunity for breakthrough growth.

Today marked the launch of the new iPhone application directory and iPhone users worldwide had the opportunity to start testing out the new applications. So far it appears that there is positive feedback and given the expected success of the iPhone 2.0 tomorrow, things are looking up for Apple. There are some unexpected competitors though as Caroline McCarthy points out: Facebook and MySpace.

I have said over and over again that the iPhone is inherently a social device and have suggested that the phone could transform social gaming. At this juncture, I think that could easily be an understatement. With the launch of multiple iPhone applications this morning, it is clear that MySpace and Facebook have distinct competitors: Loopt, Whrrl and of course Apple, just to name a few. Most of those competitors have also built in location based services and some have included instant communications with others in the network.

The other thing that’s important is that companies can immediately start charging for applications, something that no developers have been able to do on social platforms. While that may soon change with the launch of Facebook’s payment platform, Apple has just catapulted themselves to become one of the potential front-runners in the social platform wars.

While the iPhone still has less users than Facebook or MySpace, that could rapidly change. With Apple ready to launch in a number of countries, the company has a great opportunity to reach their iPod user base which is already larger than Facebook and close to the size of MySpace. In the wars of the social platforms (just as with any other platforms), the battles are fought for developers and clearly the current opportunity presented by the iPhone will attract plenty of developers.

Whether or not competing social network offerings will be able to pull away the users from sites like Facebook and MySpace, the initial battles are simply for developers and that’s all that matters. In the coming weeks we may begin to hear of similar success stories to those experienced by the initial Facebook application developers.

As the success stories roll in, the developers will follow suit and jump on the latest platform craze. Facebook better be able to pull something out of their hat at the upcoming f8 event in San Francisco. With the clamping down on privacy violations, developers are getting nervous and there was never a better time to try out the latest hot thing. If Facebook doesn’t pull out something big at f8, there is a chance for yet another monumental shift of development resources.

Do you think Facebook, MySpace and other social platform developers will soon jump ship?

Privacy is increasingly becoming a topic of discussion in the world of online advertising. As new tools emerge to target advertising based on user behavior as well as provide social relevance, privacy is becoming a critical issue. Whether it’s the tracking of users via cookies or the monitoring of their activities throughout “the social graph”, we are in a new era in which the lines between personal and public lives have become blurred if not eliminated.

Today, Chris Kelly, the Chief Privacy Officer of Facebook spoke to the United States Senate Committee on Commerce, Science and Transportation about the “Privacy Implications of Online Advertising.” A full transcript of Chris Kelly’s testimony is available on the Senate’s website. On the topic of differentiating between personally identifiable information and non-personally identifiable information, Chris Kelley stated:

The critical distinction that we embrace in our policies and practices, and that we want our users to understand, is between the use of personal information for advertisements in personally-identifiable form, and the use, dissemination, or sharing of information with advertisers in non-personally-identifiable form. Ad targeting that shares or sells personal information to advertisers (name, email, other contact oriented information) without user control is fundamentally different from targeting that only gives advertisers the ability to present their ads based on aggregate data.

Chris Kelly also gave an overview of Facebook’s SocialAds and their Beacon program. From the initial glance at this hearing, there is not much significant revealed. What is clear is that the govenment is actively involved in discussing the privacy of internet users and this arrives at a critical time. Advertising networks are racing to develop systems that target users based on their friends and activities and in some cases it is pushing the limits of privacy standards.

I frequently discuss the privacy of social network users on this site and the implications that these new advertising systems have in regards to their privacy. It is excellent to see that the govenment is quickly to discuss what it taking place. Personally, I hope that we see a global set of privacy standards and rights developed in the near future.

I’d imagine that one day we will have an enforcement organization that monitors the activities of many of these companies.

Platform-A, the AOL owned advertising network which has the largest reach of any network based on the number of pages their ads are shown on, has announced that they will begin offering social application developers on Facebook and Bebo a guaranteed rate. Platform-A already advertises on AOL Instant Messenger and Bebo but this extends them into third-party applications. This is a similar strategy to Lookery who guarantees 12.5 cent CPMs (cost per thousan impressions) globally and 25 cents in Europe.

According to Larry Dignan, Platform-A’s CPM rate will probably be closer to the 70 to 80 cent range. PaidConent is reporting a much lower rate at around 40 cents. This is still extremely low for most developers and the overall industry is finding it extremely challenging to boost the CPMs much higher. The move by Platform-A into this space emphasizes how this is an industry wide problem and not just confined to a small group of application developers. It is ultimately in everybody’s best interest to figure out a way to boost the CPMs.

Last week at the Digital Media Conference in Virginia, Lynda Clarizio, President of Platform A, stated that she expects a substantial amount of consolidation in the industry. Ultimately, having countless advertising networks is not really sustainable. Over the next 12 months we are going to see new monetization models pop-up but it will still be a challenge to try and increase the overall industry returns. Do you know of any networks providing higher CPMs?