Content Matters

Via Research Recap comes this summary of a Hitwise report showing that UK web traffic to social network sites has now exceeded that to web-based email systems like Hotmail, Gmail and Yahoo! Mail.  Social networks like Facebook, Bebo and MySpace accounted for 5.17% of UK traffic in October as compared to 4.98% for the email sites.

While those numbers may come as a surprise, what I found more compelling was the chart below, where Hitwise shows that clicks to retail sites from social networks exceeded the traffic sent by the email sites.  Let me repeat that - social networks in the UK were driving more clicks to etailers than the major web-based email sites.

I find that shocking, especially when you think about all of the promotional email that the etailers send out on their own, all to generate links back. 

I'd like to dig further into the Hitwise numbers to see which widgets or pages are generating the clicks and what online retailers are the greatest recipients, but on the surface, this suggests that the referral-based marketing that is at the heart of the newly launched Facebook ads is already occurring a meaningful way among social networks.

I will be participating in a panel Thursday as part of NYU's VIP Lunch Dialogue on B2B marketing online. 

ClickZ's Heidi Cohen will serve as moderator.  Topics will include business models for online content, marketing and advertising models, use of new technologies and more.

The program will be held at NYU's Midtown Center (11 W 42nd Street), 10th floor, from 12:30 - 1:30pm on November 8.

Hope to see you there.

With nine-figure investments and multi-billion dollar valuations comes the expectation that Facebook can effectively monetize the pages in its rapidly growing social network.  So, it was no surprise that Facebook yesterday announced Facebook Ads, a new advertising network.

Facebook Ads will be focused on brand advertising.  They are positioning the ads as "socially aware" advertising, leveraging a user's social network, akin to personal referrals.  There are three components to Facebook Ads:

1. Social Ads: ads which are targeted to Facebook users based upon demographics compiled from their profile information, such as age, sex, relationship status, employment history and indicated interests.
2. Facebook Pages: Corporate ad widgets (formerly project Beacon) where corporations will be able to create corporate Facebook pages, placing an ad widget on the page which can be grabbed by users, in essence becoming endorsers of that product; and
3. Insight: Analytics and usage metrics fed back to advertisers providing aggregated demographic profile information of the types of users who are clicking on their ads.

These ads will be managed directly by Facebook; this is not part of the deal announced with Microsoft, which is focused on the sale of banner ads.

The profile-aware social ads make sense to me, though it depends how effective Facebook is at mining the interest data and matching that to potential advertisers.  While age, sex and relationship status can easily trigger some demographic ads such as dating services, that's pretty limited.  But if they can mine the interests, for example, to serve Prius ads to people who focus on the environment, that could be more compelling.

The corporate ad widgets could be effective, but will require advertisers to become much more creative than they've been until now.  Paul Kedrosky sarcastically envisions receiving a Coke Wants to Be Your Friend message, thinking "ooh I can't wait".  I think there are a limited number of products for which users may be openly willing to act as an endorser.  Apple would have little problem getting iPhone endorsers, as could Nintendo for the Wii.  Entertainment companies could effectively find endorsers for movies, bands and television shows and auto manufacturers have shown that they can drum up enthusiasm for at least some of their offerings.  The (Red) campaign, as featured in the Facebook sample to the right, would certainly attract users.  But most traditional industries will struggle in this regard.  I can't see too many endorsers for CPG products "boy, this new Tide detergent really cleans my clothes well".

In the early stages, products will either need to have a sense of "coolness" about them or perhaps be tied to social issues.  For example, environmentally friendly products could quickly find support among green-focused Facebook users.  These ads will work for enthusiasts, but finding passionate users won't be easy for many segments.  Users may be willing to refer their friends to products that seem cool or where they are viewed as an expert because of the endorsement, but they are likely to resist if they come across as a corporate shill.

Lots more details and analysis are available on the Facebook blog, Valleywag, Mashable, Read/Write/Web and Scoble,  while Om Malik asks if Beacon is a privacy nightmare.

I've gotten a flurry of invites to Plaxo Pluse in the past week or so.
Most of these have come from distant contacts, people I may have done business with 4-6 years ago, but whom I don't consider part of my current network.

I guess that makes sense, as Plaxo's core product is built upon each user's Outlook address book and also captures the email addresses of anyone with whom you've exchanged emails in the past.  Interestingly, though, hardly any of the invites which I've received are from people to whom I'm connected via LinkedIn or Facebook.

Which brings me to the question that I posed in the title of this post - where does Plaxo Pluse fit in the world of social networks?  LinkedIn has a straightforward value proposition - I can reach the network contacts of my network for business purposes (recruitment or business development).  Facebook is more the entertainment side of social networking, with a glimmer of hope for b2b potential to be built on their platform.  The new OpenSocial will, in theory, create a platform that I can use for development of b2b social apps.  But what value will Plaxo Pulse offer?

I know what I'd like it to become.  I think that Plaxo Pulse could become the open source social graph that I've posted about previously.  Plaxo already contains my extended address book and has triggers to alert users to changes among their contacts, so it could easily serve as the sole platform for maintaining my social graph.  But, there's no obvious business model for them in doing so.  With its "lifestream", a summary feed of the various feeds of my contacts, it could become another Friendfeed, but I'm not sure that's a sustainable model either.  Or, are they simply looking to improve their valuation by positioning themselves as a social network without any real direction?

Any thoughts on where Plaxo Pulse is headed or what their positioning might be?  I'd welcome your thoughts in the comments.

In an effort to simplify their elevator pitch, while improving shareholder value, Barry Diller's IAC Interactive Corp has announced its plan to split into five publicly-traded companies.

On the conference call, Diller stated "It can not be said in a single sentence, ‘what is IAC?". 

The internet company, IAC Interactive Corp, which includes Ask.com, CitySearch, Excite, Evite and Match.com, will continue to be led by Diller, while four other units will be spun off:

• HSN (Home Shopping Network)
• Ticketmaster
• Lending Tree
• Interval International (timeshare company)

Operationally, the deal might make some sense.  The web-based ad-supported properties will remain together, while the larger stand-alone businesses will be spun out.  However, assessing valuations for each of the individual businesses will be a nightmare, as Paul Kedrosky points out.  He adds:

We go from a crazy complex quilt of unrelated companies, to another crazy complex quilt of unrelated companies -- with a few wholly-owned unrelated subsidiaries.

Google has officially launched OpenSocial.  The OpenSocial links are now active and there’s some reasonable content up there.  They have set up a sandbox for developers to play with, building OpenSocial apps for Orkut.  The OpenSocial platform has been built on top of Google Gadgets, so there's a fairly deep framework already in place.  Meanwhile, MySpace and Bebo have joined the party, significantly growing the potential installed user base.

Here’s a quick roundup of what others have to say:

Ning founder (and OpenSocial participant) Marc Andreesen says “What a world we live in. Developers of Open Social apps will have distribution to 200 million users. I'm sorry, I know I'm supposed to be cynical about this stuff, but that's astonishing.”

Mike Arrington seems to have bought into the Google hype: "Google may have just come out of nowhere and checkmated Facebook in the social networking power struggle."

Meanwhile Dave Winer responds that “Google has a long way to go to build the base of users and developers connected using the new protocol that is the subject of all this chest-thumping. Do they exist in any tangible form? How much of a moving target are they? It's like proclaiming the new owners of A-Rod's contract as the winners of the 2008 World Series.”

With all of the announcements flying about, there has been silence from Yahoo throughout.  I’d previously suggested that Yahoo was the big loser in the Facebook war; now, with OpenSocial in the mix, it seems clear that’s the case.  According to Robert Scoble “As to Yahoo and Microsoft? Well, I talked with an executive from Yahoo today and he said he had nothing to announce. Translation: we have no clue. If they had a clue they would have had all guns blazing today. Now their choice is to join up. The industry support is too strong behind Open Social. Or, they could make a deal with Facebook on their “embrace and extend” strategy.”

The video from the Google announcement, at Google Campfire One, is available here.