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kottke.org posts about Facebook

Twitter, Facebook, and old new media

posted by Jason Kottke   Oct 19, 2012

Newsweek announced yesterday that the print magazine will cease publication and the entire thing will move to an all-digital format.

Newsweek Global, as the all-digital publication will be named, will be a single, worldwide edition targeted for a highly mobile, opinion-leading audience who want to learn about world events in a sophisticated context. Newsweek Global will be supported by paid subscription and will be available through e-readers for both tablet and the Web, with select content available on The Daily Beast.

In talking about the shift on his Daily Beast blog, Andrew Sullivan notes something interesting about reading online vs. reading in print (emphasis mine):

Which is why, when asked my opinion at Newsweek about print and digital, I urged taking the plunge as quickly as possible. Look: I chose digital over print 12 years ago, when I shifted my writing gradually online, with this blog and now blogazine. Of course a weekly newsmagazine on paper seems nuts to me. But it takes guts to actually make the change. An individual can, overnight. An institution is far more cumbersome. Which is why, I believe, institutional brands will still be at a disadvantage online compared with personal ones. There’s a reason why Drudge Report and the Huffington Post are named after human beings. It’s because when we read online, we migrate to read people, not institutions. Social media has only accelerated this development, as everyone with a Facebook page now has a mini-blog, and articles or posts or memes are sent by email or through social networks or Twitter.

People do tend to read people and not institutions online but a shift away from that has already started happening. A shift back to institutions, actually. Pre-1990s, people read the Times or Newsweek or Time or whatever. In 2008, people read Andrew Sullivan’s Daily Dish or Paul Krugman’s column in the Times or Gwyneth Paltrow’s GOOP. Today, people read feeds of their friends/followees activities, interests, thoughts, and links on sites like Twitter, Facebook, Pinterest, and Tumblr, i.e. the new media institutions.

Now, you may follow Daily Dish or Krugman on Twitter but that’s not quite the same as reading the sites; you’re not getting the whole post/article on Twitter, Krugman items are intermingled & fighting for attention with tweets from @horse_ebooks & Lady Gaga, and if you unfollowed Krugman altogether, you’ll find when he writes something especially good, someone else in your Twitter stream will point you to it pretty quickly. That is, Twitter or Facebook will provide you with the essential Krugman without you having to pay any attention to Krugman at all.

What that means is what blogs and the web are doing to newspapers and magazines, so might Facebook & Twitter do to blogs. Blogs might not even get the chance to be called old media before they’re handed their hats. It’ll be interesting to see how smartphone/tablet apps affect this dynamic…will apps push users/readers back toward old media institutions, individuals, or the friend-packaging institutions like Twitter?

Facebook’s current valuation in BK Whoppers

posted by Jason Kottke   May 16, 2012

Facebook’s going public in a few days and will finally get a real valuation attached to it. During a 2009 Burger King promotion that doled out free Whoppers for deleting some of your Facebook friends, I estimated Facebook’s valuation at about $1.8 billion.

What BK has unwittingly done here is provide a way to determine the valuation of Facebook. Let’s assume that the majority of Facebook’s value comes from the connections between their users. From Facebook’s statistics page, we learn that the site has 150 million users and the average user has 100 friends. Each friendship is requires the assent of both friends so really each user can, on average, only end half of their friendships. The price of a Whopper is approximately $2.40. That means that each user’s friendships is worth around 5 Whoppers, or $12. Do the math and:

$12/user X 150M users = $1.8 billion valuation for Facebook

At the time, Facebook’s estimated worth was anywhere between $9-15 billion, about an order of magnitude more than the company’s 2009 Whopper valuation. According to the company’s Key Facts page, Facebook has 901 million monthly active users as of the end of March 2012. Doing the math again:

$12/user X 901M users = $10.8 billion valuation for Facebook

Right now, the price range for the IPO is $34-38 a share which would put the company’s overall valuation at $104 billion, the same order of magnitude more than the current Whopper valuation.

Now, I’m no economist, but that’s a lot of hamburgers.

How Mark Zuckerberg became a good CEO

posted by Jason Kottke   May 09, 2012

Writing for New York magazine, Henry Blodget explains how a young startup founder and college dropout became the CEO of a soon-to-be $100 billion company.

When talking about Zuckerberg’s most valuable personality trait, a colleague jokingly invokes the famous Stanford marshmallow tests, in which researchers found a correlation between a young child’s ability to delay gratification — devour one treat right away, or wait and be rewarded with two — with high achievement later in life. If Zuckerberg had been one of the Stanford scientists’ subjects, the colleague jokes, Facebook would never have been created: He’d still be sitting in a room somewhere, not eating marshmallows.

Abraham Lincoln invented Facebook

posted by Jason Kottke   May 08, 2012

[Ed note: read the update below…this is likely definitely a hoax.] Intrigued by a possible connection between PT Barnum and Abe Lincoln, Nate St. Pierre travelled to the Lincoln Museum in Springfield, IL. Once there, he stumbled upon something called The Springfield Gazette, a personal newspaper made by Lincoln that is eerily similar to Facebook.

The whole Springfield Gazette was one sheet of paper, and it was all about Lincoln. Only him. Other people only came into the document in conjunction with how he experienced life at that moment. If you look at the Gazette picture above, you can see his portrait in the upper left-hand corner. See how the column of text under him is cut off on the left side? Stupid scanned picture, I know, ugh. But just to the left of his picture, and above that column of text, is a little box. And in that box you see three things: his name, his address, and his profession (attorney).

The first column underneath his picture contains a bunch of short blurbs about what’s going on in his life at the moment - work he recently did, some books the family bought, and the new games his boys made up. In the next three columns he shares a quote he likes, two poems, and a short story about the Pilgrim Fathers. I don’t know where he got them, but they’re obviously copied from somewhere. In the last three columns he tells the story of his day at the circus and tiny little story about his current life on the prairie.

Put all that together on one page and tell me what it looks like to you. Profile picture. Personal information. Status updates. Copied and shared material. A few longer posts. Looks like something we see every day, doesn’t it?

Lincoln even tried to patent the idea.

Lincoln was requesting a patent for “The Gazette,” a system to “keep People aware of Others in the Town.” He laid out a plan where every town would have its own Gazette, named after the town itself. He listed the Springfield Gazette as his Visual Appendix, an example of the system he was talking about. Lincoln was proposing that each town build a centrally located collection of documents where “every Man may have his own page, where he might discuss his Family, his Work, and his Various Endeavors.”

He went on to propose that “each Man may decide if he shall make his page Available to the entire Town, or only to those with whom he has established Family or Friendship.” Evidently there was to be someone overseeing this collection of documents, and he would somehow know which pages anyone could look at, and which ones only certain people could see (it wasn’t quite clear in the application). Lincoln stated that these documents could be updated “at any time deemed Fit or Necessary,” so that anyone in town could know what was going on in their friends’ lives “without being Present in Body.”

Man, I hope this isn’t a hoax…it’s almost too perfect. Also, queue Jesse Eisenberg saying “Abe, if you had invented Facebook, you would have invented Facebook”. (via @gavinpurcell)

Update: Ok, I’m willing to call hoax on this one based on two things. 1) The first non-engraved photograph reproduced in a newspaper was in 1880, 35 years after the Springfield Gazette was alledgedly produced. 2) The Library of Congress says that the photograph pictured in the Gazette was taken in 1846 or 1847, a year or two after the publication date. That and the low-res “I couldn’t take proper photos of them” images pretty much convinces me.

Update: And the proof…the original Springfield Gazette sans Lincoln. (via @zempf)

Facebook and Instagram as company towns

posted by Jason Kottke   Apr 11, 2012

One of the more thought-provoking pieces on Instagram’s billion dollar sale to Facebook is Matt Webb’s Instagram as an island economy. In it, he thinks about Instagram as a closed economy:

What is the labour encoded in Instagram? It’s easy to see. Every “user” of Instagram is a worker. There are some people who produce photos — this is valuable, it means there is something for people to look it. There are some people who only produce comments or “likes,” the virtual society equivalent of apes picking lice off other apes. This is valuable, because people like recognition and are more likely to produce photos. All workers are also marketers — some highly effective and some not at all. And there’s a general intellect which has been developed, a kind of community expertise and teaching of this expertise to produce photographs which are good at producing the valuable, attractive likes and comments (i.e., photographs which are especially pretty and provocative), and a somewhat competitive culture to become a better marketer.

There are also the workers who build the factory — the behaviour-structuring instrument/forum which is Instagram itself, both its infrastructure and it’s “interface:” the production lines on the factory floor, and the factory store. However these workers are only playing a role. Really they are owners.

All of those workers (the factory workers) receive a wage. They have not organised, so the wage is low, but it’s there. It’s invisible.

Like all good producers, the workers are also consumers. They immediately spend their entire wage, and their wages is only good in Instagram-town. What they buy is the likes and comments of the photos they produce (what? You think it’s free? Of course it’s not free, it feels good so you have to pay for it. And you did, by being a producer), and access to the public spaces of Instagram-town to communicate with other consumers. It’s not the first time that factory workers have been housed in factory homes and spent their money in factory stores.

Although he doesn’t use the term explictly, Webb is talking about a company town. Interestingly, Paul Bausch used this term in reference to Facebook a few weeks ago in a discussion about blogging:

The whole idea of [blog] comments is based on the assumption that most people reading won’t have their own platform to respond with. So you need to provide some temporary shanty town for these folks to take up residence for a day or two. And then if you’re like Matt — hanging out in dozens of shanty towns — you need some sort of communication mechanism to tie them together. That sucks.

So what’s an alternative? Facebook is sort of the alternative right now: company town.

Back to Webb, he says that making actual money with Instagram will be easy:

I will say that it’s simple to make money out of Instagram. People are already producing and consuming, so it’s a small step to introduce the dollar into this.

I’m not so sure about this…it’s too easy for people to pick up and move out of Instagram-town for other virtual towns, thereby creating a ghost town and a massively devalued economy. After all, the same real-world economic forces that allowed a dozen people to build a billion dollar service in two years means a dozen other people can build someplace other than Instagram for people to hang out in, spending their virtual Other-town dollars.

Also worth a read on Facebook/Instagram: Paul Ford’s piece for New York Magazine.

Facebook, a company with a potential market cap worth five or six moon landings, is spending one of its many billions of dollars to buy Instagram, a tiny company dedicated to helping Thai beauty queens share photos of their fingernails. Many people have critical opinions on this subject, ranging from “this will ruin Instagram” to “$1 billion is too much.” And for many Instagram users it’s discomfiting to see a giant company they distrust purchase a tiny company they adore - like if Coldplay acquired Dirty Projectors, or a Gang of Four reunion was sponsored by Foxconn.

So what’s going on here?

First, to understand this deal it’s important to understand Facebook. Unfortunately everything about Facebook defies logic. In terms of user experience (insider jargon: “UX”), Facebook is like an NYPD police van crashing into an IKEA, forever - a chaotic mess of products designed to burrow into every facet of your life.

Social media shaming tames Spring Break

posted by Jason Kottke   Mar 16, 2012

Maybe Facebook *is* good for society: teens aren’t acting as crazy during Spring Break because they don’t want to get caught doing inappropriate things on camera.

They are so afraid everyone is going to take their picture and put it online.

You don’t want to have to defend yourself later, so you don’t do it.

But spring break [in Key West] has been Facebooked into greater respectability.

“At the beach yesterday, I would put my beer can down, out of the picture every time,” Ms. Sawyer said. “I do worry about Facebook. I just know I need a job eventually.”

“Oh, no,” she recoiled. “I’m friends with my mom on Facebook.”

Facebook: Society’s Self-Surveillance Network™. (via @gavinpurcell)

The reluctant sex lube salesman

posted by Jason Kottke   Feb 27, 2012

Nick Bergus recently posted a link on Facebook to a 55-gallon drum of personal lubricant sold by Amazon — it’s only $1500! Then the post got sponsored and his family and friends started seeing it when they used Facebook, turning Bergus into a pitchman of sorts for an absurd amount of sex lube.

A week later, a friend posts a screen capture and tells me that my post has been showing up next to his news feed as a sponsored story, meaning Amazon is paying Facebook to highlight my link to a giant tub of personal lubricant.

Other people start reporting that they’re seeing it, too. A fellow roller derby referee. A former employee of a magazine I still write for. My co-worker’s wife. They’re not seeing just once, but regularly. Said one friend: “It has shown up as one on mine every single time I log in.”

Get used to this…promoted word of mouth is how a lot of advertising will work in the future.

BTW, as with many unusual products on Amazon, the “Customers Who Viewed This Item Also Viewed” listing (horse head mask?) and the reviews are worth checking out.

As a Fertility Specialist for Pachyderms, this was exactly what we needed to help rebuild elephant populations all over sub-saharan africa. It’s not all just Medications and IVF treatments. Some times you need a loudspeaker, a Barry White CD and a 55 Gallon drum of Lube.

Working with Zuck

posted by Jason Kottke   Oct 26, 2011

More than a year ago, Facebook engineer Andrew Bosworth wrote a post about how best to work with Facebook CEO Mark Zuckerberg.

I think one of the biggest mistakes people make when first working with Zuck is feeling that they can’t push back. As long as I have been at Facebook, I have been impressed with how much he prefers to be part of an ongoing discussion about the product as opposed to being its dictator. There are a number of exceptions to this, of course, but that comes with the territory. In those instances where he is quite sure what he wants, I find he is quite good at making his decisions clear and curtailing unneeded debate.

Barring that, you should feel comfortable noting potential problems with a proposal of his or, even better, suggesting alternative solutions. You shouldn’t necessarily expect to change his mind on the spot, but I find it is common for discussions to affect his thinking over a longer time period. Don’t necessarily expect acknowledgment for your role in moving the discussion forward; getting the product right should be its own reward. If you do that, you’ll find you are invited back more and more to the debate.

Facebook is certainly an interesting company…they’re a large company that appears to operate much like a small company. Will be interesting to see if they can keep that up as they get larger, go public, etc.

Stalking in the age of Facebook

posted by Jason Kottke   Oct 13, 2011

This is the contemporary take on the guy-meets-girl-at-party story. Guy isn’t particularly interested in girl but at some later point starts surreptitiously taking photos of her and posting them to a secret blog. Girl finds out, isn’t creeped out at all. Boy doesn’t feel shame at girl’s discovery, only that it ruined his creative outlet before “he might have gotten better at it or something”. Girl decides to interview boy for her communications class. You know, completely normal.

She messaged Walker through Facebook, and at first he seemed receptive. “He thought it was funny,” said Merker. But after an initial show of interest, Walker got skittish, canceling and rescheduling the interview repeatedly. When Merker finally sat down with him, it was only after she had managed to catch him off-guard, saying she was already in his neighborhood and offering to meet at a bar.

Walker had one condition: he wanted to do the interview “in character” as the persona he had established through the blog. That would mean interviewing Merker, too; after all, any blogger who had devoted an entire Tumblr to a single person would certainly take the opportunity to directly question his subject.

You know when Mark Zuckerberg says stuff like privacy doesn’t matter and Facebook makes formerly private information public without notice and all the tech pundits (most of whom are older than Zuck) go bananas tearing out their hair about how stupid and crazy that is? Now you know where Zuck and Facebook are coming from.

Don Draper pitches Facebook Timeline

posted by Jason Kottke   Sep 27, 2011

This is just flat-out fantastic.

(via ★interesting)

Mark Zuckerberg’s adult supervision

posted by Jason Kottke   Jul 05, 2011

In the latest issue of the New Yorker, Ken Auletta has a profile of Sheryl Sandberg, COO of Facebook. A lot of the article focuses on gender issues in business and technology.

Early this spring, Sandberg gathered twelve female Facebook executives in a bare, white-walled conference room to review the agenda for the company’s Women’s Leadership Day, which was scheduled for the following week. Each of them was expected to lead sessions encouraging all the female executives there to step up “into leadership” roles. “What I believe, and that doesn’t mean everyone believes it, is that there are still institutional problems and we need more flexibility in all of this stuff,” Sandberg told them. “But much too much of the conversation is on blaming others, and not enough is on taking responsibility ourselves.”

Yes, she continued, we could swap anecdotes about sexist acts. But doing so diverts women from self-improvement. She opposes all forms of affirmative action for women. “If you don’t believe there is a glass ceiling, there is no need,” she told me. She doesn’t even like voluntary efforts to keep positions open for qualified women. There’s a cost, she explained, in lost time, and a cost for women, because “people will think she’s not the best person and that job was held open for a woman.”

How Facebook decides what to show you

posted by Jason Kottke   Oct 22, 2010

Thomas Weber attempted to reverse engineer the algorithm that Facebook uses for its “Top News” feed and learned some very interesting things about what Facebook chooses what to show (and not show) their users.

1. Facebook’s Bias Against Newcomers. If there’s one thing our experiment made all too clear, it’s that following 500 million people into a party means that a lot of the beer and pretzels are already long gone. Poor Phil spent his first week shouting his updates, posted several times a day, yet most of his ready-made “friends” never noticed a peep on their news feeds. His invisibility was especially acute among those with lengthy, well-established lists of friends. Phil’s perpetual conversation with the ether only stopped when we instructed our volunteers to interact with him. A dynamic which leads to…

2. Facebook’s Catch-22: To get exposure on Facebook, you need friends to interact with your updates in certain ways (more on that below). But you aren’t likely to have friends interacting with your updates if you don’t have exposure in the first place. (Memo to Facebook newcomers: Try to get a few friends to click like crazy on your items.)

This bit at the end is particularly interesting:

All the while, Facebook, like Google, continues to redefine “what’s important to you” as “what’s important to other people.” In that framework, the serendipitous belongs to those who connect directly with their friends in the real world-or at least take the time to skip their news feed and go visit their friends’ pages directly once in a while.

Facebook soon bigger than Google?

posted by Jason Kottke   Oct 05, 2010

In a piece at the normally unlinkable TechCrunch, Adam Rifkin argues that Facebook could be bigger than Google (revenue-wise) in five years. Rifkin makes a compelling argument.

Facebook Advertising does not directly compete with the text advertisements of Google’s AdWords and AdSense. Instead Facebook is siphoning from Madison Avenue TV ad spend dollars. Television advertising represented $60 billion in 2009, or roughly one out of every two dollars spent on advertising in the U.S.; the main challenge marketers have with the Internet till recently has been that there aren’t too many places where they can reach almost everybody with one single ad spend. Facebook fixes that problem.

Worst practices on the web

posted by Jason Kottke   Sep 16, 2010

Dark Patterns are UI techniques designed to trick users into doing things they otherwise wouldn’t have done.

Normally when you think of “bad design”, you think of laziness or mistakes. These are known as design anti-patterns. Dark Patterns are different — they are not mistakes, they are carefully crafted with a solid understanding of human psychology, and they do not have the user’s interests in mind.

For instance, Privacy Zuckering is a dark pattern implemented by Facebook to get users to share more about themselves than they would like to. (thx, @tnorthcutt)

Zuckerberg and Style Rookie and Dyson

posted by Jason Kottke   Sep 13, 2010

The New Yorker has a trio of interesting articles in their most recent issue for the discerning web/technology lady or gentlemen. First is a lengthy profile of Mark Zuckerberg, the quite private CEO of Facebook who doesn’t believe in privacy.

Zuckerberg may seem like an over-sharer in the age of over-sharing. But that’s kind of the point. Zuckerberg’s business model depends on our shifting notions of privacy, revelation, and sheer self-display. The more that people are willing to put online, the more money his site can make from advertisers. Happily for him, and the prospects of his eventual fortune, his business interests align perfectly with his personal philosophy. In the bio section of his page, Zuckerberg writes simply, “I’m trying to make the world a more open place.”

The second is a profile of Tavi Gevinson (sub. required), who you may know as the youngster behind Style Rookie.

Tavi has an eye for frumpy, “Grey Gardens”-inspired clothes and for arch accessories, and her taste in designers runs toward the cerebral. From the beginning, her blog had an element of mystery: is it for real? And how did a thirteen-year-old suburban kid develop such a singular look? Her readership quickly grew to fifty thousand daily viewers and won the ear of major designers.

And C, John Seabrook has a profile of James Dyson (sub. required), he of the unusual vacuum cleaners, unusual hand dryers, and the unusual air-circulating fan.

In the fall of 2002, the British inventor James Dyson entered the U.S. market with an upright vacuum cleaner, the Dyson DC07. Dyson was the product’s designer, engineer, manufacturer, and pitchman. The price was three hundred and ninety-nine dollars. Not only did the Dyson cost much more than most machines sold at retail but it was made almost entirely out of plastic. In the most perverse design decision of all, Dyson let you see the dirt as you collected it, in a clear plastic bin in the machine’s midsection.

Meet Sean Parker

posted by Jason Kottke   Sep 08, 2010

Vanity Fair has a profile of hacker-turned-billionaire Sean Parker, who helped found Napster, Plaxo, and Facebook.

He has financed the businesses of numerous cohorts, merely out of affection. “He’s one of the most generous people I know,” says another associate. “Also one of the flakiest.”

Traditional media’s adoption of social media

posted by Aaron Cohen   May 22, 2010

Think about the following platforms and when the first traditional media activity/participation occurred in that platform’s history: Friendster, MySpace, Facebook, Twitter, Tumblr, Foursquare, Chatroulette. It was a shorter and shorter period for each platform.*

Let’s call this the adoption half-life. It’s a bastardization of Moore’s Law, but the level of adoption required for a social platform to be covered as The Next Big Thing in social platforms will continue to decrease until NBT status is bestowed upon a platform used only by those in the media.

I’d been writing a post about this that wasn’t coming out the way I wanted, so I shelved it until I saw The Onion’s take on last fall’s New York Times’ take on Foursquare. Then I decided to jam 2 posts together.

The Onion sums this all up way more succinctly:

Aging, scared newspapermen throw themselves at the latest mobile technology trend in a humiliatingly futile attempt to remain relevant.

For his part, Foursquare founder, Dennis Crowley, had this to say:

Um, The Onion poking fun of @foursquare (and me). This is the greatest moment of my entire life.

*If someone has a LexisNexis account and can find the first mention of these platforms, I’d be grateful, but since this is the internet, I don’t need sources, mirite?

The gameification of everything

posted by Jason Kottke   Feb 25, 2010

In this 28-minute presentation, Jesse Schell talks about the psychological and economic aspects of Facebook games and what that means for the future of gaming and living. If you make products or software that other people use, this is pretty much a must-see kinda thing…the last 5 or 6 minutes are dizzying, magical, and terrifying.

Using Facebook to split up the US

posted by Jason Kottke   Feb 09, 2010

Data from Facebook reveals how the United States is split up into different regions like Stayathomia, Greater Texas, Dixie, and Mormonia.

Stretching from New York to Minnesota, [Stayathomia’s] defining feature is how near most people are to their friends, implying they don’t move far. In most cases outside the largest cities, the most common connections are with immediately neighboring cities, and even New York only has one really long-range link in its top 10. Apart from Los Angeles, all of its strong ties are comparatively local.

(thx, dinu)

Interview with an anonymous Facebook employee

posted by Jason Kottke   Jan 13, 2010

All sorts of goodies come up during the interview, including master passwords, keeping data after it has been deleted, and the the ubersmart Facebook engineers that you can’t talk to “on a normal level”.

Facebook = lobster trap

posted by Jason Kottke   Jul 23, 2009

I love a good analogy:

Facebook is basically designed like a lobster trap with your friends as bait.

(via migurski)

Facebook’s valuation and the network effect

posted by Jason Kottke   Jan 13, 2009

My inbox is divided about the valuation of Facebook calculated using Burger King Whopper Sacrifice promotion (unfriend 10 people to get a Whopper). The majority say that even if you prevented people from refriending those they unfriended for a Whopper, a value of 12 cents for each friend link is too high and that most links are worth much less than that. That is, Facebook is awash in junk friendships of little value.

A smaller contingent is arguing that Burger King would have to pay much more to break some friendships and that Facebook’s valuation is therefore higher than the straight calculation indicates. For instance, getting Johnny Shoegazer to unfriend that girl he likes might take a considerable sum of money. I agree that Facebook is worth more than $1.8 billion in Whoppers but not because some individual links are more valuable than others…it’s about groups and networks of links. You might be able to get someone to part with 10 “junk” friends for $2.40 but could you pay them $22 more to essentially shut down their Facebook account for good? I don’t think so. It’s going to cost much more than that…and for some intense users of the site, the “buyout” amount might be surprisingly high. (I’d probably accept $24 to close my Facebook account. But I pay nothing to use Twitter and ~$25 a year for Flickr and it might take several hundred or even thousands of dollars to entice me to permanently close either of those accounts…I get so much value from them.)

The reason for this seems like it might have something to do with Metcalfe’s Law:

Metcalfe’s law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n^2). […] Metcalfe’s law characterizes many of the network effects of communication technologies and networks such as the Internet, social networking, and the World Wide Web. It is related to the fact that the number of unique connections in a network of a number of nodes (n) can be expressed mathematically as the triangular number n(n - 1)/2, which is proportional to n^2 asymptotically.

Or for our economic purposes, the network effect:

In economics and business, a network effect (also called network externality) is the effect that one user of a good or service has on the value of that product to other users. The classic example is the telephone. The more people own telephones, the more valuable the telephone is to each owner. This creates a positive externality because a user may purchase their phone without intending to create value for other users, but does so in any case.

As Facebook accumulates users and friendship links, the service becomes more and more valuable for each user. In Whoppernomics terms, Facebook may well be worth the $15 billion that the Microsoft deal suggested, but there are obviously problems for Facebook in thinking about their value in this way. How do they extract that value from their users? Getting a user to accept a $500 buyout for their Facebook account is different than Facebook asking that user to pay $500 to keep using their account even though the monetary value of the account is the same in either case. What Facebook is betting on is that each user will put up with hundreds of dollars worth of distractions (in the form of advertising and promotions) from their primary goal on the site (i.e. connecting with friends). Also, as Friendster and MySpace and every other social networking site has learned, membership in these services is not exclusive and users may eventually find more value in some other network with (temporarily) less distraction.

Again, assuming that we’re not taking this too seriously.

Facebook’s valuation (in Whoppers)

posted by Jason Kottke   Jan 09, 2009

Burger King recently introduced a Facebook app called Whopper Sacrifice that allows users to delete ten of their friends in exchange for a Whopper sandwich. Watch the app in action.

What BK has unwittingly done here is provide a way to determine the valuation of Facebook. Let’s assume that the majority of Facebook’s value comes from the connections between their users. From Facebook’s statistics page, we learn that the site has 150 million users and the average user has 100 friends. Each friendship is requires the assent of both friends so really each user can, on average, only end half of their friendships. The price of a Whopper is approximately $2.40. That means that each user’s friendships is worth around 5 Whoppers, or $12. Do the math and:

$12/user X 150M users = $1.8 billion valuation for Facebook

That’s considerably less than the $15 billion valuation assigned to Facebook when Microsoft invested in the company in October 2007 and the lower valuations being tossed about in recent months.

P.S. Other assumptions for the sake of argument: every user is eligible for the Whopper promotion (it’s actually only valid in the US), you can sell all of your friends for multiple burgers (actually limit one per customer), and the “average user has 100 friends” means that Facebook users average 100 friends apiece (no idea what the reality is…if they’re using the median instead of the mean then that number could be higher or lower). Oh, and it’s also assumed that no one should take this too seriously.

Update: I’m getting some email saying that Facebook friendships require the assent of both parties. Is that the way it works for the BK thing? If I am friends with Mary and I unfriend her through the Whopper Sacrifice app, is she then unable to unfriend me to help get her burger? If so, then the $3.6 billion valuation drops to $1.8 billion because each unfriending event takes care of 2 friend connections, not just one. Anyone? Note: we are already taking this too seriously!

Update: Ok, it looks like unfriending on Facebook takes out two friendship connections, not just one. So that drops each user’s share to $12 and the valuation to $1.8 billion. D. Final answer, Regis. (thx, everyone)

kottke.org on Facebook

posted by Jason Kottke   Oct 16, 2008

kottke.org now has a Facebook page. I don’t know what this is good for exactly, but there it is. Become a fan! (kottke.org also has a Twitter account if you’d like to read the site that way.)

Facebook still closed

posted by Jason Kottke   Jul 07, 2008

Some Facebook employee wrote a rebuttal on Facebook to Facebook is the new AOL:

my former PayPal colleague Yishan Wong, now an ass-kicking, name-taking engineer at Facebook, lays the “Walled Garden” rebuttal smackdown on Kottke, Arrington, et al. you go, Yishan… you just go.

And then. Oh, the irony:

Doh! guess Yishan’s post is only visible to his facebook friends… okay, so maybe semi-permeable garden, perhaps.

Mmmm, invisible smackdown.

There’s a big kerfuffle (how many points

posted by Deron Bauman   Mar 06, 2008

There’s a big kerfuffle (how many points do I get for that?) over Hasbro, makers of Scrabble, suing Rajat and Jayant Agarwalla over their popular Facebook application, Scrabulous.

Mark Zuckerberg On ‘60 Minutes’

posted by Choire Sicha   Jan 14, 2008

Lesley Stahl of ‘60 Minutes’ did a big piece last night on Facebook and its CEO Mark Zuckerberg. (It followed Anderson Cooper’s horrifying story on rape in Congo and the spillover of Rwandan terror into the country; unreal.)

The worst part (about 3 minutes in, on the online video) came when Stahl said Facebook was the new Google. “You seem to be replacing [Google co-founders] Larry and Sergey as the people out here who everyone’s talking about,” she said. Zuckerberg didn’t say anything. “You’re just staring at me,” she said, almost immediately. “Is that a question?” he asked her. Then: “We were warned he could be awkward,” she said in a voice-over. Actually no, Lesley, that was a savvy response to a terrible, no-win question.

Facebookazine

posted by Adam Lisagor   Dec 06, 2007

A yet-to-be-released Facebook magazine/book hybrid “will be bought by Facebook experts and novices alike, as it covers everything from a step by step guide to getting started through to smart security tips.” Presumably, the bookazine will include tips for responding to zombie pokes of your friend’s friends’ favorite nonprofit topless $1 gift wall petition.

The effect of ditching my Facebook account last week didn’t register as much as it may have for some (sorry about that, my nine Facebook friends with whom I never otherwise communicate), but it’s been interesting to see the current backlash manifest itself. Deleting your Facebook is the new Facebook. (via hysterical paroxysm)

Facebook vs. AOL, redux

posted by Jason Kottke   Jul 01, 2007

I wanted to clarify my comments about Facebook’s similarities to AOL. I don’t think Facebook is a bad company or that they won’t be successful; they seem like smart passionate people who genuinely care about making a great space for their users.1 It’s just that I, unlike many other people, don’t think that Facebook and Facebook Platform are the future of the web. The platform is great for Facebook, but it’s a step sideways or even backwards (towards an AOL-style service) for the web.

Think of it this way. Facebook is an intranet for you and your friends that just happens to be accessible without a VPN. If you’re not a Facebook user, you can’t do anything with the site…nearly everything published by their users is private. Google doesn’t index any user-created information on Facebook.2 AFAIK, user data is available through the platform but that hardly makes it open…all of the significant information and, more importantly, interaction still happens in private. Compare this with MySpace or Flickr or YouTube. Much of the information generated on these sites is publicly available. The pages are indexed by search engines. You don’t have to be a user to participate (in the broadest sense…reading, viewing, and lurking are participating).

Faced with competition from this open web, AOL lost…running a closed service with custom content and interfaces was no match for the wild frontier of the web. Maybe if they’d done some things differently, they would have fared better, but they still would have lost. In competitive markets, open and messy trumps closed and controlled in the long run. Everything you can do on Facebook with ease is possible using a loose coalition of blogging software, IM clients, email, Twitter, Flickr, Google Reader, etc. Sure, it’s not as automatic or easy, but anyone can participate and the number of things to see and do on the web outnumbers the number of things you can see and do on Facebook by several orders of magnitude (and always will).

At some point in the future, Facebook may well open up, rendering much of this criticism irrelevant. Their privacy controls are legendarily flexible and precise…it should be easy for them to let people expose parts of the information to anyone if they wanted to. And as Matt Webb pointed out to me in an email, there’s the possibility that Facebook turn itself inside out and be the social network bit for everyone else’s web apps. In the meantime, maybe we shouldn’t be so excited about the web’s future moving onto an intranet.

[1] And I’m definitely not, as more than one person has suggested, “bitter” about Facebook’s success. Please. Just because you disagree with something doesn’t mean you’re angry. The only reason I even wrote that post is that I got tired of seeing the same people who think AOL sucked, that Times Select is a bad business decision for the NY Times, that are frustrated by IM interop, and that open participation on the web is changing business, media, and human culture for the better trumpeting that this new closed platform is the way forward.

[2] Aside from extremely limited profile pages, which are little more than “hi, this person is on Facebook and you should be too” advertisements. Examples here.

Facebook is the new AOL

posted by Jason Kottke   Jun 29, 2007

Earlier in the week, I made a comment in passing in a post about Vimeo:

you do know that Facebook is AOL 2.0, right?

A few people picked up on it and speculated what I might have meant by it. In reading those posts and poking around a bit, I found a post that Scott Heiferman made just after Facebook Platform launched in May:

While at Sony in 1994, I was sent to Virginia to learn how to build a Sony “app” on AOL (the #3 online service, behind Compuserve & Prodigy at the time) using AOL’s proprietary “rainman” platform.

Fast forward to Facebook 2007 and see similarities: If you want access to their big base of users, develop something in their proprietary language for their people who live in their walled garden.

Scott pretty much nails it here. I’ve no doubt that Facebook is excited about their new platform (their userbase is big enough that companies feel like they have to develop for it) and it’s a savvy move on their part, but I’m not so sure everyone else should be happy about it. What happens when Flickr and LinkedIn and Google and Microsoft and MySpace and YouTube and MetaFilter and Vimeo and Last.fm launch their platforms that you need to develop apps for in some proprietary language that’s different for each platform? That gets expensive, time-consuming, and irritating. It’s difficult enough to develop for OS X, Windows, and Linux simultaneously…imagine if you had 30 different platforms to develop for.

As it happens, we already have a platform on which anyone can communicate and collaborate with anyone else, individuals and companies can develop applications which can interoperate with one another through open and freely available tools, protocols, and interfaces. It’s called the internet and it’s more compelling than AOL was in 1994 and Facebook in 2007. Eventually, someone will come along and turn Facebook inside-out, so that instead of custom applications running on a platform in a walled garden, applications run on the internet, out in the open, and people can tie their social network into it if they want, with privacy controls, access levels, and alter-egos galore.

Update: I’ve clarified my AOL vs. Facebook thoughts here.