Why Facebook Is Worth Over $10 Billion

Posted by admin in Facebook on March 8, 2010

Yahoo! have been in talks with Facebook for over a year now and apparently recently got shy at Facebook’s $1 billion asking price but as I will explain here Yahoo! have missed out on an absolute bargain.

Facebook have 18 million users, plenty. However MySpace has 100 million + and sold for a mere $580 million to News Corp’s in 2005. YouTube sold to Google for a reported $1.65 billion in 2006 but it serves over 100 million video’s a day and has over 25 million visitors a month. So what makes Facebook so valuable? It gets relatively huge traffic levels but not on par with YouTube or MySpace. Despite now being available to anyone it began life as an exclusive network for students (you needed an educational email to register) and this is still its primary user group.

So where’s the money?

Currently Facebook displays conventional banner advertising on users’ homepages and selected pages through the site. Adverts are unobtrusive and random in so much as they’re not targeted at any particular user- they’re just served to the entire site on a random basis. Facebook are doing ok out of this arrangement on the basis of the number of page impressions they receive, although in reality they’re keeping advertising at a minimum in order to build up the value of the site for its eventual sale which will almost certainly happen in 2007/8. Smart guys!

The power of information

Register with Facebook and quickly you can find yourself giving away huge volumes of valuable personal information. Think about it… Facebook know your name, they know how old you are (actually your D.O.B which is infinitely more valuable as I’ll go on to explain), they know if you’re male or female, they know your hometown, your postcode if you choose to give it away (although I doubt many users choose this), they know if you’re single, in a relationship (and who with), married, divorced etc, they know your sexual orientation. Ok so you can answer all these questions as honestly, dishonestly or vaguely as you like but from what I’ve seen people happily give accurate information about themselves as it’s their friends and potential friends who are going to see it- and no one else right?

But what else do Facebook know? Well they know where you went to school, where you work, more sinisterly your religious and political views. From this we can start to build up a pretty valuable market profile. As I’m telling Facebook I may as well tell you I’m Male, 22 (born in August), Straight, in a relationship, conservative, atheist from Brighton, England. Went to school at Blatchington Mill Secondary, college at a place called BHASVIC, University at Bournemouth. From this information we can draw further assumptions- I live in Brighton and based on the location of my schools catchment area we could pretty accurately map places in Brighton I know about, visit, and live in (think Google maps API). I’m a straight; conservative from a reasonably wealthy area in full time employment therefore I’m probably white, middle class with a decent disposable income.

So what else? Facebook know what you look like, they probably know what you used to look like a few years ago as well. Probably most significantly they know who your friends are, they know how you know them, they know when you talk to them, what they look like and ultimately they know exactly the same information about them as they know about you- you’re interests, likes and dislikes and your friends tastes as well.

They know your email address, so they know if you use Hotmail, Yahoo! Mail etc. They know your phone number so they could pretty easily work out your phone provider. They have your IP address so they could work out your ISP. They know where you’ve arrived at the site from so they know what search engine you use (enter Yahoo! And Google to the bidding war), what browser you’re on, they know if you’re visually impaired or have learning disabilities from the settings on your browser.

Facebook know when I’m logging in and from where so they know the hours I work, if I’m using the internet at work, the pages I leave Facebook to go to or the pages I come from so they know what other sites I look at. I can set my current status and tell Facebook exactly what I’m doing or feeling right this second.

Ok so you get the picture by now, one last thing though, is your Facebook password the same as your email account password, your internet and telephone banking password, every other password you use in your daily life (because until I wrote this post mine was!) how much more information do you want to give away?

What’s the risk here?

Realistically it’s pretty slim. Facebook are a nice bunch of guys and a great site, I love using it and despite knowing what I know about information security and the like I choose to give away a big chunk of the information I’ve talked about here.

Yahoo! And Facebook

So if Yahoo!, Google or god forbid Microsoft successfully purchase Facebook (as I say I’m reasonably confident this will happen this year) the Orwellian lucid dream proposed by this post becomes a perpetual nightmare. Imagine a company who have made billions and dominated the fastest growing market in the world by developing algorithms which crawl hundreds of millions of pages of random information (the internet) and categorize that information with the ultimate goal of matching it to businesses and selling advertising.

The search algorithm let loose on Facebook

Imagine the search engines let loose on Facebook. An algorithm tuned to pick out profile information (John, born 13.08.84). Map it to keywords in personal interests i.e. football, Manchester United. Plot your location on a map i.e. Brighton, England. Follow links to your closest friends with similar interests i.e. Bob and Dave who live round the corner and serve me an advert something like:

Happy birthday for next week John.

Did you know its Dave’s birthday the week after?

Why not book tickets for Brighton and Hove Albion vs. Manchester united on 12.08.07

Click here to book now and get 3 tickets for the price of 2 (why not ask bob to come along- he supports Brighton and you haven’t spoken in a while).

Book today and we’ll give you a half price limo from your house to the game with trashy-limo’s.com.

Now that’s powerful advertising and it’s just around the corner. If Facebook has 25 million registered users by the time it’s sold, half of whom visit every day that’s a minimum 12.5 million page impressions a day. Serve the advert above at $1 a click (which is far less than its worth based on the current AdWords CPC model) expect a click through rate of up to 10% based on the precise nature of the advertising and that’s $1.2 million minimum a day- almost $½ a billion a year. Grow that user group to 50 million (realistic if Google or Yahoo! can tap into their existing user database) and sell ad space on an affiliate basis say the football tickets at $300 with a 10% affiliate kickback and a 10% conversion rate =$3 per user x 25 million users =$75 million a day or $2737500000 in year 1! OK lets not get carried away people aren’t going to spend $300 every other day but the logics there and so the cash.

Will the audience except it?

Better quality advertising means less advertising- less websites rammed with banners so you can’t find what you’re looking for, less popups, less low quality products. This is the main driving force behind the success of search marketing programs and profile based advertising is already in place with Google’s personalized search returning more targeted AdWords ads than previously possible. If it falls into the hands of Microsoft then people may be more wary but with the image of Google or Yahoo! and Facebook profile information is seen as soft information as the company doesn’t sell you products directly and he service is free. It’s the way the internet is going and I believe it’s where we’ll be in 5 years.

Identity theft

The point I’ve been making tediously through this post is that we should be more careful about what information we give up and to whom. If the internet was a county it would be Nazi Germany and Facebook would be the Gestapo! Social utilities like Facebook are afforded the sort of privileged information fascist governments the world over would and have killed for. We moan about identity cards being introduced in the UK (ironically there’s several Facebook groups dedicated to the cause) but we happily give up personal details to a bunch of college geeks in the states who are ultimately planning on selling our details to the highest bidder (the value of any site is based on the volume, quality and amount of information they have about their traffic- but best of luck to them) possibly to the company who already control the majority of world business systems through the windows platform.

This post is not meant to scare- it’s simply a recognition of the power of new internet technologies, their possibly applications and to pose the question- if your Facebook friends are your real friends shouldn’t they know your birthday? Are Facebook really going to buy you a present?!

Tips For Accumulating More Twitter Followers

Posted by admin in Twitter on March 8, 2010

Increasing your Twitter following allows you to drive traffic to your website(s), build your online presence, and network with people from around the world. So how do you get more Twitter followers? Some may argue that it requires posting good tweets at a particular frequency or following good tweet etiquette while others say that it all boils down to driving traffic to your Twitter page and following people so they in turn follow you. Let’s explore those two arguments.

What We Can Gather From the Most Popular Twitter Users

If you go to twitterholic.com, you can see the users with the most number of Twitter followers. If you have a quick glance over the list, you’ll see that most of these users are already famous in real life, whether because they have a successful business or because they are a celebrity. It’s not like they built their Twitter profiles from the ground up and accumulated so many Twitter followers because they write good tweets. However, this doesn’t mean that you’re doomed not to gain a good following just because you’re not famous.

The Way You Use Twitter Has Little Importance

If you are worried that the frequency of your tweeting or the quality of your tweeting is what primarily affects the number of followers you get, quit obsessing. You must treat your Twitter account just as you would any one of your other websites. The key to success is driving traffic to your site. In the big picture, obsessing about your tweeting habits is really not going to make a difference. The idea is to maximize your visibility just as you would on your own blog. To come up with marketing strategies for getting more people to go to your Twitter page and follow you, think of some incentives for why those people would want to follow you.

Strategies for Increasing Your Twitter Following

Make your Twitter profile follow you wherever you go. Make sure you add a link to your Twitter page at the end of emails and forum signatures. Put links to your Twitter page on your other social media profiles. If you have an online business or application, consider using Twitter for tech/customer support. Try setting up a contest or giveaway on your Twitter page. You can also create a free tool and advertise it on your Twitter page. One of the exceptions to the rule of not worrying about tweeting etiquette is using tweets to link to articles of interest to your followers. This helps you build a following.

One of the most effective strategies for increasing your Twitter following is following other Twitter users. When you follow new users, those users usually follow you right back. The downside to this tactic is that if you start following many people in a short time on Twitter, you risk being labeled a spammer. So if you are looking to build a long-term strategy and a legitimate Twitter profile, you’ll probably want to follow people gradually. One way you can do it is start following a bunch of people to get them to follow you in return, and then cut down the number of people you follow to make your profile look legitimate. The problem with following too many people is that you are overloaded with tweets and it can be difficult to actually keep up with anyone.

In conclusion, there are two ways to approach Twitter when building your following. You can use it to get immediate traffic to your websites or you can use it to network and converse with your followers to build rapport. How you decide to build your following and use Twitter depends on the end goal you’d like to achieve. If you follow these simple methods though, you’re bound to increase your followers, no matter what your motive may be.

The Church of Facebook: How the Hyperconnected Are Redefining Community

Posted by admin in Facebook on March 7, 2010

• ISBN13: 9781434765345
• Condition: NEW
• Notes: Brand New from Publisher. No Remainder Mark.

Product Description
A revolution is taking place, one profile at a time. Online social networks are connecting people like never before. And with millions of users, they’re creating a virtual world that erases all boundaries. It’s a movement that’s changing how we form relationships, perceive others, and shape our identity. Yet at their core, these sites reflect our need for community. Our need for intimacy, connection, and a place to simply belong. Are we seeing the future of … More >>

The Church of Facebook: How the Hyperconnected Are Redefining Community