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

November 9, 2011

Max SEO with 8 simple Google+ steps

Chris AbrahamLet me boil my last post, Here’s why it make sense to use Google Plus, down to practical pieces. Part of what makes a technology premature is that you have to be careful how you use it, because it isn’t mature enough to just work no matter what you do with it. To help you carefully handle Google+ for maximum advantage, I’ve assembled eight steps that help you get the best search visibility from your Google+ posts. These tips are simple, but some are easy to overlook. I hacked this awful-looking graphic as an example:

Optimizing Google+ for optimal SEO

Here’s a list of things that you need to consider before you invest your time and energy in Google+:

  • Make sure all your posts are Public. You can add more circles in order to spur interest among your friends, but be sure you explicitly tell Google, through your willingness to share publicly, that they can index your content in their public search engine. Check this every time because sometimes Public isn’t always selected, depending on the situation. Here’s my Google+ public profile.
  • Use a clean URL when you add your content to Google+. Google+ hasn’t been translating URL shorteners well, so use a link from the source. This will not only allow Google to better populate the content as you see above, including the Title, Blog Name, Description, and an Image from the post, but it will also allow that content to be cross-referenced to any Google +1 “likes” from others within Google+ and the rest of the Googlephere. Site URLs are translated the way they are on Facebook. You need to paste the URL into the “Share what’s new…” text box.
  • Prefixing names with a plus sign links that name to the person’s profile on Google+. You can include your friends and people you’re connected to on G+ in a similar way you do in Facebook, but Google+ has a gimmick that you may know or not. In the graphic above, you’ll see a light gray-blue rectangular box around the names Arsh S and Jenna Levy — I did that by adding a plus symbol (+) before each name while I am writing the article. G+ then populates a pull-down, offering pre-populated names of people I am connected to. I just need to select and go. Sometimes the profile’s privacy setting prohibits the link reference to persist after posting. Linking to people is a good way to engage, inform, and initiate conversation.

Continue reading