Inside Facebook: the Facebook Book

On June 6, 2007 I boldly predicted this would happen within a year, and now, here it is. Facebook and Myspace have the same amount of traffic according to Alexa! Myspace still exceeds Facebook in the U.S. specifically, but globally, they are identical, and the alexa’s reach number is poised to soon favor Facebook as well.

Facebook also reports 50 million active users, and over 36 Billion pageviews a month. Alexa similarly reports that each visitor averages 30/PVs/day on Facebook, with 10% of this now coming from apps pages. For completeness let me add, Compete.com reports much lower numbers for Facebook, showing myspace still very clearly ahead. I can’t compare methodologies here, but it seems to me that Comscore’s results more closely corroborate Alexa.

Some people say facebook is over hyped. In the dotcom bust, pageviews came from unsustainable advertising and excessive IPO funded burn rates. Facebook’s growth and usage is naturally viral and organic, and the company is profitable. Three weeks ago, I posted 7 ways that facebook is poised to exceed google in traffic, and only #6 has seen any activity so far, and that announcement on Nov 6th is likely to be bigger than I expected. We’ve seen leading companies regularly eclipsed by better newcomers, and that is likely to continue and even happen more quickly riding on social networks, so no one can predict whether FB will be relevant in 10 years, but the rising curve still has a long way to climb.

I now predict that FB will exceed two out of three of these by Jun 6, 2008: google.com, live.com and youtube.com. Google will be moving heavily into open social networking with an api launch next month, and youtube continues to grow reach very effectively. MSFT is shift msn.com traffic to live.com rapidly. Since this would make Facebook a global top 5 website, it would be non-trivial. More significant will be whether facebook exceeds the combined traffic of google/youtube/orkut or yahoo.com. It is clear they are working hard on the monetization of this traffic, in a way that doesn’t impact the user experience. myspace went with ad volume and visibility, and facebook is looking only to ad quality.

For me personally, the most exciting part of this is the tremendous explosion of creativity we will see with social network applications as widgets as the entire ecosystem competes on openness and features, for the hearts and passion of a million developers.

Never before has an internet site grown as the Facebook. Never. On June 6th, just 4 months ago, I predicted that within a year FB would be larger than myspace, and though this was in no way obvious then, it is now on track to happen before the end of 2007. FB’s global reach, at 4.5% today, is about 1 percentage point under myspace.

Interestingly just this week for the first time, FB’s proportion of vistors from U.S.+Canada+U.K. slipped under 50%, which is still the highest proportion at any SN. The world is now growing faster than the core, since growth in all segments is very strong and the world has a relatively smaller installed base.

Sites come and go, so what will FB do over the next 2-3 years to become the single largest internet destination?

1. Roll-your-own networks and/or organize your friends. We’ve seen public evidence that FB is planning friend lists, and the questions are only whether those will be public or private (my friends for X vs. a group of friends that is X network) and how well they will integrate with other API features.
2. International. Fortunately FB is built on php and mysql, which are naturally multi-byte. Just in japan/korea/china, this could easily double site traffic.
3. Marketplace coming to its potential. Wouldn’t you rather buy from someone you know? The scale of use vastly exceeds any other classifieds engine including craigslist, and the specificity of targeting and grouping is unmatchable.
4. A truly relevant feed. Right now only 10% of what is in my feed is interesting to me, but this is a only a very difficult relevance tuning problem, since less than 1% of my news makes it into my feed. What if this rose to 50% and I had visibility into as much of it as I wanted to see?
5. Full communication: a full featured messaging system, integrated teleconferencing and voice, easy IM, organized broadcasting through feed and notifications.
6. The FB ad platform, leveraging both the profile information, ultimate targetting and segmentation, and scale of a quarter billion members, will be offered as the preferred model for monetization of FB apps.
7. Multiple profiles per account, multi-page profiles, and public/private/target specific views. It can’t all fit in one view, and when FB solves this in several years, they will again double page views, and solve that many more use cases.

(note: i have no insider information about any of this.. i’ve just been watching and using heavily.)

And when they get around to it, they will monetize, and I praise Zuck for making the battle against irrelevant, annoying ads an essential characteristic of FB. Any perceived revenue problem just shows a severe lack of imagination.

Certainly myspace, google and yahoo are following furiously and hundreds of startups are seeking the next paradigm shift. The next super site will probably grow more quickly than even FB did, leveraging the viral tools of all SNs. So we can just know that the pace of internet innovation - more people, more devices, more real tools and solutions, more fun and imagination - will only continue to increase.

Justin Smith’s InsideFacebook blog broke that the Facebook API may soon include the functions friends.getLists and friends.getListMembers. These were only visible for a short time, when some internal code (yes, FB developers use the same tools as app developers) was accidentally pushed public. Since organizing my hundreds of very different friends is an essential need for me, and I spend a chapter of my book on it, this difficult topic excites me. I could build a Friend organizer app, but this and top friends needs to be integrated into the core of platform.

Fred Stutzman muses that this could be a first step to allowing us to roll our own custom networks: for our own church, or my small unsupported company. This would require the Lists to be public, rather than just private labels for my own grouping for friends. For example, on IM I create my own buddy lists, but I can’t organize and publish a shared buddy list for my company. I fervently hope it is true that FB takes Lists to that next level. Even for private lists, an App could read and aim to semantically organize these lists for sharing among friends who have the app.

Top Friends, and Slide which created the App, should release an API for it, so that any application can use that information to guide its own flow. For example, I’d like to first offer invites to I Am Green to the Top Friends of a new user. A new member is more likely to invite friends that they feel close to, for a serious, personal application. I spoke with their top developers about it, and while they like the idea and acknowledge the utility, I saw some hesitation. I suspect it is against the TOS to offer application specific information to someone who hasn’t installed the app. Protecting yet severely limiting, and FB’s platform itself doesn’t have that limit of course.

Comments on the post by top application developer Trey Philips noted that groups.join will also be added, and that this one already is recognized as a valid entry in the developer wiki. If this means we can automatically send invitations to groups, this will be extremely powerful, and demonstrates that FB will promote their platform tools heavily. An administrator can message groups, and group activity (like adding a photo or a FB video) gets promoted on the Feed. For I Am Green, I’ve been asking people to add themselves to various organizing and local groups, so I’m delighted. I do notice that this ties my application more closely to the platform, by encouraging me to add functionality that only is possible on FB.

Alexa now finally lists Facebook in its top 10, after some lag due to their “3-month average” methodology. Facebook is actually 8th now, having leapfrogged biadu, orkut and wikipedia. If I ignore hi5, as I plan to continue to do for a while, myspace is the next site up ahead. That’s the elite company at which FB has arrived with 8 months of explosive, unprecedented growth.

Now we need to find a metric around site utility, which distinguishes the informative content of google or wikipedia, from random profile and photo surfing on a social network. Furthermore, social networks will start to get more sophisticated with their monitization, using their demographic and personal information in unique ways - to seriously match users with purchases or brand identification. Further refining the “value equation” we need to incorporate ajax and flash, which is an increasing part of the facebook (and google and yahoo) experience, optimizing the user experience at a cost to pageviews, in a way myspace would be challenged to imitate.

Have any of you ever woken up on a Saturday or Sunday morning to discover that one of your friends has tagged 18 photos of you from the night before that you don’t quite remember taking? Have you ever received 15 comments on your wall from people you don’t know that well due to a change in your relationship status? Do you ever find yourself saying at least a few times a day “I hate facebook,” when really you check your profile every hour? If there is one thing that I learned after the first day of college, it is that facebook is an unavoidable evil. It is a great tool to stay in contact with friends and send invitations, but you pay a great price for such a tool: your privacy. However! The good news is that some of my most amusing dramas from freshman year came about because of facebook. I will describe briefly for you one of the most fascinating of these dramas: The Facebook Breakup.

When I went to college many of my friends (including myself) were in long distance relationships. Of course, most of these relationships ended within the first few weeks of college. The most memorable of these breakups happened with a friend down the hall. This breakup was memorable due to the classic “facebook war” she had with her ex in Colarodo the week after they broke up. This “facebook war,” as many facebook wars, involved 3 main steps:

1. Changing Your “Relationship Status”

Of course, the first thing you do when you breakup with someone on the phone is not to cry or call your best friend. Instead, you absolutely must change your facebook status from “In a Relationship” to Single. You may think I’m joking, but this is exactly what my friend (as well as many of my other friends) did after a breakup.

2. Changing Pictures

Not only do you have to change your profile picture of your with your past “love,” you also have to make sure that you have untagged all of the romantic pictures you had together. As my friend told me, the purpose of such an action was to “Make the other person feel bad.”

3. Writing Comments About What a Horrible Person Your Ex Is

For many people it is not enough to just end a relationship with a breakup. Many times your bitterness causes you to have a thought that goes something like this, “I’m going to make sure that everyone who is my friend on facebook knows what a horrible person my ex is.” Of course, such an action serves two purposes; to indirectly tell your boyfriend how much you hate him while at the same time thinking that if your publish your thoughts on your ex he/she will never be able to find a significant other again : )

AThought355
www.philisophicalhigh.blogspot.com

Perhaps on the back of the Newsweek cover story, FB just burst up to 2.98% reach on Alexa, so will be at 3% imminently. It took 3 months from mid-march to climb from 1% to 2%, and less than 2 months to jump to 3%.

The pageviews graph shows even more impressive results, with a 4 month climb from 0.5% of internet traffic to 1%, followed by the jump of almost 0.5% in the last 6 weeks. Incredible: according to alexa, facebook is serving 50% more pageviews now than it was 2 months ago, shortly after their api launch. apps.facebook.com is now contributing 5% of pageviews, and 300 applications have over 25K members.

Fred Stutzman reported on Comscore’s analysis of social network growth rates, noting that total unique visitors shows 270% growth for FB between jun ‘06 and ‘07, up to 54 million visits, a rate roughly 3x greater than the competition, with almost 70% of this in the most profitable north american demographic. Much of this with older members, as Business Week discusses, where a tremendous potential for growth obviously remains.

My prediction 2 months ago that FB would supercede myspace within a year is one-quarter achieved as FB rapidly closes the gap, with “reach” growth even more rapid than my chosen metric of pageviews. Since 50% of all FB users visit the site daily, according to company statements, this reach growth is a powerful forward indicator of pageviews. Alexa now ranks FB 8th in the world over the prior week. hi5 is keeping up with its latin american storm, but i see them as another myspace for a different demographic, and couldn’t contemplate betting on them over facebook.

The true tipping point will come when other major websites feel compelled to create facebook applications, just as they felt in 2000 a need to make a website. We are 6-9 months away, and other major social networks will actually contribute to the inevitable pressure by encouraging those apps to build for their networks as well.

The latest rumors postpone an IPO out to two years. If so, general market pressure would be the culprit, and FB would be waiting for conditions to support a huge new market cap after this current mortagage/debt recession weakens, just as google 2004 IPO showed the web 1.0 bust was well past. Having zero insider knowledge at this point, I still predict an IPO in 2008, after a few explosive revenue deals (showcasing its demographic and rich data uniqueness) and its position in the public mind within the same tier as myspace and google secured.

Facebook just jumped into the top ranking for sites in Canada according to Alexa. The very top site by a blend of traffic and reach.

There is no reason why this shouldn’t happen in the U.S. and U.K. where FB is growing rapidly. I take personal credit for this because “I Am Green” has over 3000 active users from Canada

Facebook is also the 9th ranked global site at this moment, though it continues to bounce around 10th position. And finally Alexa has moved from “thefacebook: the college network” to “Facebook: A social utility that connects people with friends and others who work, study, and live around them.” Better.

Over 8000 people have committed to 122,000 green lifestyle choices, with their friends. That’s 204,000 Leaves grown. All in just a few weeks, and only organically with zero press or blog coverage.
See “I Am Green”.

“I Am Green” is a networking application for facebook members about caring for the future of our planet by changing little things we do everyday. Members change small things about their every day lives, and share these ideas together. Some of the popular actions are using cold water instead of hot, switching to the right green products, and not using paper or plastic in many specific cases where habit draws us but it’s not needed. Members call their green actions ‘Leaves’ which they pile up. Their lists are displayed on their profile for all their friends to see and endorse or even copy. Its a smart way to find out about little things that will make a better tomorrow.’

Try “I Am Green”.
The facebook platform makes rich, social interaction possible. If you are Green, act on it, and be proud of it.

leaf photo: (CC BY-ND, http://www.flickr.com/photos/krassycandoit/)

The FB site has been down this morning, from around 6:30am PST according to my logs, so going over 2 hrs now. I’m suspecting a DOS attack related to the platform changes, discovered around the valley yesterday. I have no evidence for that at all. I did notice that the developers documentation pages went down shortly after the stories hit valley way for a few hours.

20070629 9:28:56|error|219|acting
20070629 9:28:57|error|219|home:total:a:1:{s:5:"total";s:4:"8708";} 

20070629 12:08:38|error|217|acting
20070629 12:09:10|error|217|acting

Some developers are vocally upset, since their weeks of feverish work are less likely to hit wide adoption. As invites go 10/day vs all right now is a tectonic shift - from very likely to explode to may grow quickly. Users will need motivation to go back and invite.

Why? Because the high early adoptions of the initial apps didn’t result in high usage or great satisfaction. Not a huge surprise, because the first of anything is rarely great, and applications will mature and improve.

So now, only 10 people per day will get to shout that your app is great, which will benefit the tone of the entire app process. It’s unfortunate that the early movers got such an advantage, and that there will be intertia against uninstalls - so basically they have an open window to make their apps effective at retaining users and building daily usage.. which is exactly what facebook wants them to be doing.

I am Green has been growing steadily, even with notifications down for 2 days, and without invites. So I’ll just be happy knowing those work even a little bit.

I’m upset about how this was (not) communicated though. I spent at least 6 hrs over the last two days fixing and fixing a bug in my invite system which wasn’t a bug.. it was the new way. Similarly, if notifications are down (and i haven’t received any in two days) that deserves a posting to some developer rss feed, so I don’t wonder what I did wrong. FB should give app developers more love, just as ebay did to power users. We’re energentic, grateful, and passionate, and there are 69,791 of us.

The Facebook F8 Platform will propel the site ahead of myspace in total pageviews, within a year.

This alexa graph of myspace vs. facebook looks quite innocuous, so my prediction is not self-evident. Myspace has grown above 2.5% of total traffic and claims to be adding 300K new users/day. Facebook just tickling both 1% of traffic and 2% of Reach.

Two factors will enable this:

1. The Feed will become so rapidly changing and interesting that we’ll all need to check it more often than email.
2. The Profile will really become our online identity.

Currently few FB page views are of the Profile, because it hasn’t been interesting enough. Well, now it will have both the mini-feed rapidly updating - where I can see what this friend Tried to put in my Feed, and unique application boxes, interesting enough for my attention. There is no archive of the Feed .. once you miss it, it is gone, and I think it would be against the TOS to cache it. So you gotta go look at yours now.

The developer application/group crossed 33K members today. Each one can have up to 10 application keys. I’ve created two applications, Lists and Shout, and have 6 other keys in development. That means hundreds of thousands of applications are coming, and the beauty of the viral application adoption model is that the most useful applications get use. Even those useful only to whatever niche they serve. Some of these applications will be backed by serious marketing efforts, by companies to are paying to develop them, and betting heavily on their success.

Mark has pulled thousands of application developers into his fold, and they are rushing to fill a rapidly closing opportunity: to be the first X, Y or Z application on Facebook. I personally have been pushing myself beyond my physical limits (down to 3-5 hrs/day of sleep for 9 days) yet delighting in the chance. Google search is now within the site. I’m be putting wikipedia in, unless happily some person beats me to it. I’m only one of thousands, and that is great for Facebook.

To exceed myspace, FB only needs to double membership, and double pageviews for each member. Since 50% of all members visit daily (a metric myspace will never match), this is extremely achievable in one year.

Since this is my first annual prognostication column (on my daughter’s birthday) I will also add that FB will IPO within 5 months of that date, at a total valuation greater than $10B. Google’s was $21B several years ago, and FB has much greater relative traffic and share than google did at the time.