June 11, 2012

Facebook’s biggest barrier to enormous wealth? Trust


Image by RedKoala on BigStockPhoto

 

Why Facebook will find it hard to monetize the social graph

This is first of a three-part series on Facebook as an investment. Coming up:
Facebook will remain king, but social pure plays will fade
Brands: How to cut your exposure to Facebook business risk

Christopher RollysonIf Facebook’s stock price were based on the number of blog posts about its IPO, the company would be in great shape, but too few posts have addressed Facebook’s real barrier to monetizing its business, so we will rectify that here. 

Although Facebook is a fantastic social venue and platform, I did not buy into Facebook and do not plan to invest in its stock. (The stock price is down 30 percent from its debut on May 18.) Facebook‘s Achilles heel is a significant trust gap with its users, and now, its investors. Its trust gap will make it difficult for Facebook management to fully monetize its most unique asset, its users’ social graph data. Moreover, the management team has not shown the insight or willingness to address this barrier.

Why lack of trust is Facebook’s Achilles heel

That Facebook has a spotty trust profile with users is an understatement. Its management has a history of being cavalier with users’ data. Although many have argued this point, I’ve observed that Facebook’s policies have been mostly legal, but trust is independent of legality. Facebook’s management has gotten better about “considering” users during the past year or so, but such consideration has felt compliant and not entirely voluntary.

This matters. Although I have no inside information about Facebook’s technology or strategy, my knowledge of user social data and its value in developing relationships leads me to deduce that Facebook’s gold mine is its unique knowledge of users’ social graphs. Just play around with Facebook ads. Only Facebook knows what California physics undergrads prefer in music, movies and running shoes. Who their friends and hobbies are, and when they post their running updates. And what moms with 3.2 kids who went to Berkeley think about whales or global warming or Republican budget proposals.

When users discover how Facebook intends to use their personal information, they will see red. This is Facebook’s biggest risk.

The problem is, although I’m sure Facebook has employed some of the best attorneys for a long time, and user agreements give Facebook the “right” to use social data however they want, we have all witnessed that users themselves revolt when they perceive that they have been duped. And when they discover how Facebook intends to use their personal information (that they have willingly, if ignorantly, surrendered, by the way), they will undoubtedly see red. This is Facebook’s biggest risk. It’s not a legal issue, it’s a trust and relationship issue. Continue reading

February 6, 2012

TaskRabbit: Crowdsourcing comes to your neighborhood

A mobile marketplace for getting stuff done from JD Lasica on Vimeo.

Start-up offers location-aware marketplace for getting stuff done

JD LasicaOne of my favorite new iPhone apps and online services is TaskRabbit, a platform that allows people to hire other people to complete tasks in their own towns or neighborhoods.

The concept is drop-dead simple but difficult to pull off. Founder Leah Busque says TaskRabbit lets folks “outsource small jobs and tasks to other people in their neighborhood” — say, if you need dry cleaning or groceries picked up, house cleaning or yard work done, Ikea furniture assembled or a wifi system set up in your home.

“We’ve seen some really funny ones,” Leah said, “like, ‘Help me write a love letter to my ex-girlfriend to help win her back.’ Or, ‘Help me prank my office mate by wrapping all of his desk items in cellophane.’”

Here’s my 8-minute interview with founder Leah Busque on Vimeo.

A simple way to connect customers with a local workforce

TaskRabbit works like this:

• Sign up on the site for free.

• Post a task — what do you need done and at what price? Use the app to voice-record a description and upload photos.

• The task goes out to participants (“TaskRabbits”) based on their location. They bid on your job, you confirm the best match, he or she goes to work, and TaskRabbit gets a small cut of the price.

Well over 2,000 people have signed up to perform tasks in Boston, the San Francisco Bay Area, New York, Los Angeles, Chicago, Portland, Seattle, San Antonio and Austin, with Atlanta, Dallas and Houston on the way. The company’s vetting process includes online applications, video interviews and a background check, which greatly weeds out the flakes (my term, not hers). Trust, safety and security are at the heart of the marketplace, Leah says.

Unlike online services like Angie’s List, TaskRabbit is not marketing the services of licensed electricians, plumbers and carpenters but instead is targeting regular folks — individuals in a community who can offer their free time, special skills and services.

TaskRabbit has 35 full-time staffers at its San Francisco headquarters with “city managers” across the United States, and it has $24.7 million in financial backing, TechCrunch reports.

In a phrase, TaskRabbit is about service networking rather than social networking. Check ‘em out.

Related

Do you have a strategy for social bookmarking and crowdsourcing?

Book: ‘A Guide to Open Innovation and Crowdsourcing’

September 30, 2009

The Top Five Misconceptions About Social Media

The Social Media Campaign by Gary Hayes and Laurel Papworth 2008

Ayelet NoffIn the years that I’ve been involved in social media, I have heard so many misconceptions and myths about social media that I am certain this article is long overdue. Here is a list of the top five misconceptions regarding social media:

Misconception #1: Social media is only right for certain brands

Often people ask me: “Is social media only right for web services or for ‘cool’ products?” The answer is no. Social media is right for every brand as long as the brand is able to find its target audience within a certain platform and converse/interact with it in an effective manner. Of course it may be exciting to do a marketing campaign for Apple than for Charles Schwab but for either one of those brands a targeted social media campaign within social networks and the blogosphere can bring amazing results as far as: Brand awareness, Overall buzz around the brand, traffic, customer loyalty and ultimately revenue. Continue reading

May 21, 2009

Friends go head to head on XPO Games

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Ayelet NoffSocial gaming has become huge in the last year — after all, playing games is naturally a social activity. Social gaming basically combines the best of the gaming portals with the social network platform. What’s so great about this idea is that the social tools offered enable casual gamers to play in a much more fun, interesting and competitive environment. It not only allows friends to share their scores with one another, it creates a fun way for people to interact, create and receive feedback.

Continue reading

April 8, 2009

AOL executive on its social services toolbox

Ayelet NoffAOL sure is in an interesting place these days. They have a brand new CEO (ex Google VP Tim Armstrong), a legacy dial-up access business that more than 20 years after it was launched still makes billions of dollars a year and the rest of AOL split up into three different groups: Platform A, one of largest advertising networks; Media Glow, which includes AOL.com and mega blogs like TMZ and Engadget, and the group that most interests me, People Networks, which includes AIM, ICQ, Bebo, Yedda, Goowy and the newly acquired SocialThing.

People Networks is now planning an extensive synergy of all these properties (and also third party outside content) under the banner of “life streaming,” where users will be able to syndicate all their online activity into one stream.

Continue reading

March 4, 2009

Social media and a school death threat

How Twitterers acted to head off tragedy in St. Louis

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JD LasicaI just heard a fascinating story that speaks to how the community is tapping into social media on life-and-death matters — in this case, a bomb threat at a high school. Let me tell it to you.

Short version:

Tuesday night a history graduate student at at George Mason University in Virginia stumbled across a threat made by a student against a St. Louis school on the Wikipedia page for Langston Hughes. (See accompanying screen shot, which names the school’s principal as a target.) He alerted history professors and other followers on Twitter. One of the history professors, Marjorie McLellan (@margiemcl on Twitter), grabbed a screen shot of the threat before Wikipedia removed it — without, apparently, notifying police or officials at Lift For Life Academy charter school, south of downtown St. Louis.
Continue reading