As Facebook's membership seems to be reaching 'critical advertising mass', the site has been exploring its options for monetizing its users. Notice I didn't say 'exploring options for improving the community's experience while also making money'.
First came 'sponsored listings', a small ad inserted in a member's news feed that really does nothing but get in the way. But Facebook's latest effort, Beacon, is drawing serious fire over privacy concerns. Charlene blogs about buying a table at Overstock and then seeing that activity appear on Facebook where all her friends can see. What if the table had been a Christmas gift for a Facebook friend?
I've already talked about Facebook's new idea to let members become 'fans' of companies, products, even people. There's one common thread running through all of these ideas:
These are efforts to directly monetize Facebook's members.
Which means that Facebook has followed the same path that MySpace did: give users a unique experience that brings them in, then once the membership reaches critical mass, you monetize it. Look at the traffic for MySpace over the last three months. Notice that it's finally leveled off and that page views have been falling since the end of June? Facebook's traffic is still rising, but their page views are already falling.
Paul offers another view on Beacon:
There aren't real problems with the bulk of the program. For both advertisers and the consumers they're marketing to, it makes a ton of sense to use shared data to increase relevant advertising messages in a non-obtrusive way. Everybody wins there. But this shit where companies can add online purchases to your facebook feed without giving you the ability to opt out completely beforehand, and only 20 seconds to opt out after the purchase, is ridiculous. And Facebook knows it. Zuckerberg is his customer base, trust me he gets it.Then Paul adds this: "You may have also noted that MySpace rolled out its own feed this week, also."
Just like he got it when they rolled out the feed in the first place. With obvious opt out and privacy issues. And not surprisingly, facebook eventually got what it wanted with the feeds, while the marketplace was quieted because they complained and felt as though they were still heard. The compromise was established. Users can opt out but facebook got the platform it needed to advance its own advertising interests.
Actually I didn't, cause I finally closed my MySpace account a few weeks ago. You can only piss in the community pool so many times before everyone gets out.
This isn't rocket science, put the community first, and have any monetization of your community, also benefit the community. Threadless has been thriving for longer than either MySpace or Facebook with this model, and will probably be around after both are social-networking cautionary tales.
Geoff Livingston - Facebook's lost way(great discussion in comments section)
Karl Long - Facebook jumps the shark
BONUS: Brennan more or less says I am full of it. ;) Again, I agree with Paul's point about Beacon, but that wasn't mine. My point is that if these sites want to think of themselves as being 'Web 2.0', then they need to apply Web 2.0 thinking to their business models. I have no problem with Zuckerberg trying to monetize Facebook. But the error (a very Web 1.0 error, BTW) that I think he is making is to look at this from point of view of what's best for Mark Zuckerberg, Facebook Founder. Not Mark Zuckerberg, Facebook community member.
That's not a business model that's conducive to long-term online growth, IMO.
Tags:The Viral Garden, Marketing