Yahoo! have been in talks with Facebook for over a year now and apparently lately got shy at Facebook’s $1 billion asking cost but as I will explain here Yahoo! have missed out on an absolute bargain.
Facebook have 18 million users, plenty. Having said that MySpace has 100 million + and sold for a mere $580 million to News Corp’s in 2005. YouTube sold to Google for a reported $1.65 billion in 2006 but it serves over 100 million video’s each day and has over 25 million visitors a month. So what makes Facebook so valuable? It gets relatively large traffic levels but not on par with YouTube or MySpace. Despite now getting out there to any one it started life as an exclusive network for students (you necessary an educational e-mail to register) and this is still its primary user group.
funny facebook status. Why Facebook Is Worth More than $10 Billion. 336
So where’s the money?
Presently Facebook displays conventional banner advertising on users’ homepages and selected pages by way of the web page. Adverts are unobtrusive and random in so significantly as they’re not targeted at any particular user- they’re just served to the entire site on a random basis. Facebook are doing ok out of this arrangement on the basis of the number of page impressions they receive, although in reality they’re keeping advertising at a minimum to be able to develop up the value with the website for its eventual sale which will virtually surely happen in 2007/8. Intelligent guys!
The power of data
Register with Facebook and quickly it is possible to find yourself giving away huge volumes of useful personal data. Think about it… Facebook know your name, they know how old you’re (in fact your D.O.B that is infinitely additional valuable as I’ll go on to explain), they know if you’re male or female, they know your hometown, your postcode in case you opt for to give it away (although I doubt many users decide on this), they know if you are single, in a relationship (and who with), married, divorced etc, they know your sexual orientation. Ok so you’ll be able to answer all these concerns as honestly, dishonestly or vaguely as you like but from what I’ve observed people today happily give accurate details about themselves as it’s their friends and potential friends who are going to see it- and no one else correct?
But what else do Facebook know? Nicely they know where you went to school, where you function, much more sinisterly your religious and political views. From this we can begin to build up a fairly valuable industry profile. As I’m telling Facebook I may well also tell you I’m Male, 22 (born in August), Straight, in a relationship, conservative, atheist from Brighton, England. Went to school at Blatchington Mill Secondary, college at a location known as BHASVIC, University at Bournemouth. From this info we can draw further assumptions- I live in Brighton and based on the location of my schools catchment region we could pretty accurately map places in Brighton I know about, visit, and live in (think Google maps API). I’m a straight; conservative from a reasonably wealthy region in full time employment thus I’m quite possibly white, middle class having a decent disposable income.
funny facebook status. Facebook: A Well-known Social Networking Web site. 839
So what else? Facebook know what you appear like, they almost certainly know what you made use of to look like several years ago also. Most likely most significantly they know who your buddies are, they know how you know them, they know after you speak to them, what they appear like and ultimately they know specifically the similar information about them as they know about you- you’re interests, likes and dislikes and your buddies tastes at the same time.
They know your e-mail address, so they know if you use Hotmail, Yahoo! Mail etc. They know your phone number so they could fairly readily function out your telephone provider. They have your IP address so they could work out your ISP. They know where you’ve arrived in the internet site from so they know what search engine you use (enter Yahoo! And Google towards the bidding war), what browser you are on, they know if you are visually impaired or have studying disabilities from the settings on your browser.
Facebook know when I’m logging in and from where so they know the hours I function, if I’m applying the web at work, the pages I leave Facebook to go to or the pages I come from so they know what other web sites I examine. I can set my present status and tell Facebook precisely what I’m performing or feeling proper this second.
Ok so you get the picture by now, one last factor although, is your Facebook password the identical as your e-mail account password, your world-wide-web and telephone banking password, each other password you use within your everyday life (since until I wrote this post mine was!) just how much a lot more information do you need to give away?
What’s the risk here?
Realistically it’s pretty slim. Facebook are a good bunch of guys along with a wonderful website, I adore applying it and in spite of understanding what I know about details security plus the like I opt for to give away a large chunk with the information I’ve talked about here.
Yahoo! And Facebook
So if Yahoo!, Google or god forbid Microsoft successfully purchase Facebook (as I say I’m reasonably confident this may occur this year) the Orwellian lucid dream proposed by this post becomes a perpetual nightmare. Picture a company who have produced billions and dominated the fastest growing marketplace within the globe by developing algorithms which crawl hundreds of millions of pages of random data (the internet) and categorize that details using the ultimate goal of matching it to organizations and selling advertising.
The search algorithm let loose on Facebook
Picture the search engines let loose on Facebook. An algorithm tuned to choose out profile information and facts (John, born 13.08.84). Map it to key phrases in individual interests i.e. football, Manchester United. Plot your location on a map i.e. Brighton, England. Follow links for your closest pals with comparable interests i.e. Bob and Dave who live round the corner and serve me an advert some thing like:
Pleased birthday for subsequent week John.
Did you realize its Dave’s birthday the week immediately after?
Why not book tickets for Brighton and Hove Albion vs. Manchester united on 12.08.07
Click here to book now and get three tickets for the price of two (why not ask bob to come along- he supports Brighton and you haven’t spoken in a although).
Book today and we’ll offer you a half cost limo from your house towards the game with trashy-limo’s.com.
Now that’s effective advertising and it’s just around the corner. If Facebook has 25 million registered users by the time it is sold, half of whom check out every single day that’s a minimum 12.5 million page impressions per day. Serve the advert above at $1 a click (which is far less than its worth according to the present AdWords CPC model) anticipate a click by means of rate of as much as 10% based on the precise nature with the advertising and that’s $1.two million minimum a day- pretty much $½ a billion a year. Grow that user group to 50 million (realistic if Google or Yahoo! can tap into their existing user database) and sell ad space on an affiliate basis say the football tickets at $300 with a 10% affiliate kickback and a 10% conversion rate =$3 per user x 25 million users =$75 million each day or $2737500000 in year 1! OK lets not get carried away persons aren’t going to invest $300 each and every other day but the logics there and so the cash.
Will the audience except it?
Far better good quality advertising means less advertising- less internet sites rammed with banners so you can’t obtain what you are searching for, less popups, much less low high quality goods. This really is the main driving force behind the success of search marketing programs and profile based advertising is already in place with Google’s personalized search returning much more targeted AdWords ads than previously feasible. If it falls into the hands of Microsoft then people today could possibly be extra wary but with all the image of Google or Yahoo! and Facebook profile facts is observed as soft information as the business doesn’t sell you products directly and he service is cost-free. It is the way the world wide web is going and I believe it’s where we’ll be in 5 years.
Identity theft
The point I’ve been making tediously through this post is that we really should be much more careful about what info we give up and to whom. If the world wide web was a county it could be Nazi Germany and Facebook would be the Gestapo! Social utilities like Facebook are afforded the sort of privileged details fascist governments the globe over would and have killed for. We moan about identity cards becoming introduced in the UK (ironically there’s numerous Facebook groups dedicated towards the cause) but we happily give up personal details to a bunch of college geeks within the states who are ultimately preparing on selling our details to the highest bidder (the value of any internet site is according to the volume, good quality and amount of details they have about their traffic- but ideal of luck to them) possibly towards the company who already control the majority of globe organization systems via the windows platform.
This post isn’t meant to scare- it is basically a recognition with the power of new web technologies, their possibly applications and to pose the question- if your Facebook friends are your real friends shouldn’t they know your birthday? Are Facebook really going to buy you a present?!
