Study: Most Facebook apps are silly, pointless

HAHAHAH.........

The title of the article from CNet is "Study reveals shocking truth: Most Facebook apps are silly, pointless".

"Shocking truth"???? It may be a shock to CNet, but I bet it is not shock to the millions of FaceBook users who wastes their time on FaceBook. Here's my post on why Social Networking = Social, NOT Working back in Feb of this year.

So according to the chart below by Flowing Data, roughly 14,000 of the 23,160 FaceBook apps fall under "Just for Fun", "Gaming", or "Sports" Category. We have yet to count in "Dating", "Chat", "Messaging", "Photos", "Fashion" and "Filesharing" which each have between 200 to 1800 apps.


Again, this is not me bashing Social Networks - I use them. I am just saying that people waste their companies' time on them.

Now from a brand advertisers perspective, this is a goldmine of niche marketing, or dare I say, "long-tail" marketing.

One thing to remember though, this is NOT a Google killer, and will never be. People go to social networks to be "social". They go to Google when they are looking for something. Advertise on the former and you are trying to get their attention when they are doing something else. With the latter, you are advertising when they want your product (or your competitor's product). The second one gets the better ROI every day. As I say, this is the difference between Online Marketing and Ecommerce, between Marketing and Sales, between Yahoo's business model and Amazon's business model.

The Economist: Facebook is not a business

Ran across this article from the venerable Economist.com that led in with the by-line:

"Social networking will become a ubiquitous feature of online life. That does not mean it is a business"

YES!!!! I finally get some validation to what I have been saying here, here , in Dec 2007, and in Nov 2007: Facebook does not have a business model worth USD 15 billion.

The article likens AOL's recent purchase of Bebo for USD 850million to Microsoft's purchase of Hotmail back in 1997 for USD 400million and made Sabeer Bhatia very rich.

"Both deals, in their respective decades, illustrate a great paradox of the internet in that the premise underlying them is precisely half right and half wrong. The correct half is that a next big thing—web-mail then, social networking now—can indeed quickly become something that consumers expect from their favourite web portal. The non sequitur is to assume that the new service will be a revenue-generating business in its own right."

Free webmail is great. They are everywhere now, and Microsoft, AOL, Google, and Yahoo! are the largest providers. Microsoft wanted the subscribers and relaunched Hotmail under passport.com (remember that one?) to try to get these people onto an eCommerce gateway/platform. After that failed, passport.com became live.com to get people onto their search/online gaming/lifestyle/entertainment platform. All the while, people are still getting their free webmails, and their email account space has increased from a measly in 2MB in 1997 to a whopping 5GB or so in 2008.

"Social networking appears to be similar in this regard. The big internet and media companies have bid up the implicit valuations of MySpace, Facebook and others. But that does not mean there is a working revenue model. Sergey Brin, Google's co-founder, recently admitted that Google's 'social networking inventory as a whole' was proving problematic and that the 'monetisation work we were doing there didn't pan out as well as we had hoped.' Google has a contractual agreement with News Corp to place advertisements on its network, MySpace, and also owns its own network, Orkut. Clearly, Google is not making money from either."

So as that old Wendy's lady says, "WHERE'S THE BEEF?!??!"

The argument is that it is very useful for users, but it will be like "air" (needed, but free).

“We will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to be social,” says Charlene Li at Forrester Research, a consultancy. Future social networks, she thinks, “will be like air. They will be anywhere and everywhere we need and want them to be.”

But wait! There's more:

"The problem with today's social networks is that they are often closed to the outside web. The big networks have decided to be 'open' toward independent programmers, to encourage them to write fun new software for them. But they are reluctant to become equally open towards their users, because the networks' lofty valuations depend on maximising their page views—so they maintain a tight grip on their users' information, to ensure that they keep coming back. As a result, avid internet users often maintain separate accounts on several social networks, instant-messaging services, photo-sharing and blogging sites, and usually cannot even send simple messages from one to the other. They must invite the same friends to each service separately. It is a drag."

Total drag. I mean I have accounts on Linked In, Facebook, WIWIH, Xing, Evite, Socialzr and a few others that I can't even remember who they are much less user name and passwords. (Please do not look me up in those networks and add me as your "friend".) I have heard so many people saying that they resisted getting a Facebook account, but were so bombarded with invites that they eventually gave in. And then what happens? "On Facebook, a social graph notoriously deteriorates after the initial thrill of finding old friends from school wears off." (i.e. you forget the user name and password.) OR Social Networking becomes Social, NOT Working.

Go on read the Economist article. I know it is the Queen's English but you will enjoy it nonetheless.

One last thing the article notes: "Google, Yahoo!, Microsoft and other firms are now discovering that they may already have the ideal infrastructure for social networking in the form of the address books, in-boxes and calendars of their users."

Well this all ties in very well with what I have been saying about Consumer Computing Services... Another piece of the pie that those BIG guys are fighting for.

You read it here first....

Social Networking = Social, NOT Working

As a user, I like the social networks.

I have had a profile on Linked In for years and have been updating every now and then. I have made contacts with ex-colleagues and other industry professionals and they are in my "network". And I have used Linked In successfully to search for candidates - on advice from a Bezurk friend and also a Google recruiter. And once in a while I get a random message from someone or other on business opportunities and such. Linked In is useful for business professionals and it is there when you want to use it, but most of the time you just "forget about it".

Last year, with much virtual prodding, I joined Facebook. I came into the Princeton network and the Singapore network. People who were offline friends became online friends. Friends who were lost were now found. Acquaintances from years ago are now Facebook "friends". When you get on facebook, you get bombarded with news about your "friends" and what they are doing. It is truly social, unlike Linked In which is "professional".

So my point is when does "social networking" become "Social, NOT working". I see people "attacking" other people, commenting on their pages, and writing on each others' walls. I have "Texas Hold'em Poker" invites as well as invitations for "zombies", "vampires", "werewolves", and "slayers". I get things about "Friends for sale", "Are YOU interested?", and "find out what city you should live in". I see groups of university alumni group, ex-Open World employees group, and the "I know someone that should be hit by a bus" group. I won't even start on the applications....

There are hundreds of thousands of things to do (if not millions). But the thing is... many people are doing them during office hours! I don't mean your normal Dilbert cubicle farm employee, I mean senior people in major companies "poking", "superpoking", "writing", and "slaying" other people during the working day.

Don't they have work to do? Are they as swamped with duties as I am? All this socializing must come at a cost to productivity. Well, the news has been reporting so...

BBC: Facebook 'costs businesses dear'
INC.com: Pulling the Plug on Facebook
Sydney Herald: Facebook labelled a $5b waste of time
Timesonline.co.uk: Is social networking a waste of time?

To all my Facebook "friends" out there, I am not dissing you. I am just confounded. Don't "remove me from friends". If you do, I will have to add you to the list "I know someone who should be hit by a bus".

'Facebook Fatigue' or rather Web 2.0 Fatigue...

The Register (UK) recently ran an article titled:

"'Facebook fatigue' kicks in as people tire of social networks"

This is what I have been saying about Facebook. There is no real business model that is worth USD 15 billion smackaroos. See Nov 20th, 2007 posting. Gartner was warning against the "Web 2.0 Hype" in December (my posting on this here).

The Reg: "The average length of time users spend on all of the top three sites is on the slide. Bebo, MySpace and Facebook all took double-digit percentage hits in the last months of 2007."

Yes people.. stop wasting your time on FaceBook during Q4. You have to work to make those earnings targets. Facebook and Myspace does not help with productivity.

Checkout these stats from ComScore (courtesy of Creative Capital):

So the total social network audience grew by about 5% YOY, but average time spent DECREASED by 23%.

The Reg: "That 'user engagement' is dropping off (page impression growth is merely slowing) should be of particular concern for the sales people struggling to turn these free services into profit-making businesses. In the age of tabbed browsing, how long people stick around is particularly key for 'interactive' sites, where people aren't attracted by useful information, but by time-wasting opportunities."

Dat's what I said.... 1) no business model, and 2) time waster

The only exception may be LinkedIn where I have been told to go to head hunt rather than use traditional methods. And it seems to be working! And I was told this by a Google staff and by a Bezurk.com staff (recently acquired by NewsCorp).

Anyway, do read the Register article. It's a fun read. The article ended by reminding readers to put things into perspective. Ford Motor Company is valued at less than USD 15 billion by Wall Street! Ford is worth less than FaceBook!

HAHAHHAHAHAHAHAAHAH!!!!!! God does have a sense of humour.

CNET: Gartner warns against Social Networking hype

According to CNET, "Many companies are thinking about how they can take advantage of social-networking technology, but analysts at Gartner are warning against getting caught up in the hype." See here.

I thought they meant warning businesses against advertising or working with a Facebook or myspace. As I mentioned in my post about FaceBook, there is no solid business model in this space. The best they can do is Google Adsense.

But what Gartner really meant was "Businesses are advised to consider certain issues before investing in or developing internal social-networking tools."

Yes.. DEVELOPING internal social-networking tools. I guess in hopes of replacing the water cooler crowds, the photocopy pests, and the late lunch laggers? May be to help those busy bees find the right mate in their cubicle-land? Or find those colleagues that they haven't seen in 3 weeks? Will my yearly review depend on how much I corporate twittered since that is how my boss will keep up with what I do?

"But the Gartner report says the hype around social networking doesn't necessarily mean it's a mature enough technology to make it a critical business requirement... There is also little evidence that social networking will be as beneficial for businesses as other Web-based communications technology, such as instant messaging."

It takes a STUDY to find this out? Shouldn't the study look at how much productivity is WASTED on social networks. Whenever I log into Facebook (which is not often and usually during lunchtime only BTW), I see VPs, Directors, and Managing Directors "poke", "superpoke", playing "texas holdem poker", giving "gifts" or writing on "Funwalls"... all during business hours.

And since when did a social network become a "Web-based communications technology"? See the wikipedia definition of "communication" here. According to Wikipedia, key to communication is an exchange between the parties and "Exchange requires feedback." Instant messaging fits this definition, social networking does not. Even twitter does not. My Facebook "friends" answering "My questions" could almost be considered communication.. almost.

"The analysts recommend that IT departments think very carefully before committing to expensive 'social-networking white elephants.'"

Actually, don't think of it at all. Forget it completely. If you do, consider it a moment of madness... then forget it completely.

Newsweek: Facebook unveils ad targeting program

So Facebook finally grows up... and gets a proper business model. Then again.. is it a good business model?

It is ridiculous that both Microsoft and NY hedge firms are valuing Facebook at USD 15 Billion. (yes that is a big "B" and not "M".). I mean I did not blog when I read that, but certainly thought to myself "uh... why? What's the business models?" Up to recently, they were selling banner ads that do not work as well as icons ... I mean "Gifts"... to the same people who buy ringtones online. But that is not worth USD 15 BILLION!

So now they have unveiled an ad targeting program.

According to the Facebook Press Release, "Facebook Ads, an ad system for businesses to connect with users and target advertising to the exact audiences they want." You know what? It sounds like Google Adsense: " With Google's extensive AdWords advertiser base, we have ads for just about all categories of businesses and for practically all types of content, no matter how specialized. Google technology matches the most relevant and highest performing AdWords ads to your website."

I was getting excited when Newsweek started: "Facebook is giving users some control over whether to share information on their buying habits and other online activities with friends."

But the reality according to the press fodder was: "Facebook Ads launched with three parts: a way for businesses to build pages on Facebook to connect with their audiences; an ad system that facilitates the spread of brand messages virally through Facebook Social Ads™; and an interface to gather insights into people’s activity on Facebook that marketers care about."

Viral marketing is great but is it worth USD 15 BILLION SMACKAROOS?

During the a Google Panel, I actually suggested to Google why don't they let the AdSense site owners decide exactly what ad or product they advertise? This would apply to all social network sites they have and any Adsense customers. So let the market decides what it want to advertise on its pages and split the commission. Not just the product, but even choose the "etailer".

What if Facebook did this: produced a "What's in my purse?" widget/gadget/fadget and let people load up their "purse" with actual branded items. The brand marketers pay for this advertising AND facebook splits the ad dollar with the person. Extend this to "My mobile", "my watch", "my shampoo", "my computers", "my underwear", and even "my wallet" (including what type of Trojans and what flavor.). Imagine the freaking market research!!!

Now that is a business model. Not some silly "ad system that facilitates the spread of brand messages virally". This model is not viral. It is mainstream marketing and branding. And that's where the money is. It is not in viral marketing which is for product launches and market studies.

Besides transactional sites, all other web publishers are like any other media (print, TV, radio): Their main revenue comes from advertising. So get a proper business model to make the most out of that. Google currently gets the lion's share of my online marketing spend, because they perform and because I can track exactly how much money I make from the ads. And until Yahoo, Facebook, Myspace, etc get their collective acts together, they are still going to get left overs... if anything at all.

Peace. Out.