Matt Maroon: The Anti-Social Graph(mattmaroon.com)
mattmaroon.com
Matt Maroon: The Anti-Social Graph
http://mattmaroon.com/?p=356
40 comments
so facebook has nowhere to go but down. if they do find a magical solution they get to keep their 15 billion valuation (since the valuation is based on them finding said solution), but if they fail their value will drop rapidly to several hundred million at best. not the kind of bet I would want to make as an investor.
Facebook's users aren't valuable to advertisers because they're "fragmented" (i.e., no common interests).
That's why the only ads you see on MySpace and Facebook are for dating sites and T-shirts.
The bigger money is in selling very specific advertising (for example, selling HD-TVs to fantasy football fanatics).
That's why the only ads you see on MySpace and Facebook are for dating sites and T-shirts.
The bigger money is in selling very specific advertising (for example, selling HD-TVs to fantasy football fanatics).
I just searched, and there are 15,321 groups with "fantasy football" in the title on Facebook.
There's a third question, though, with regard to optimism about Facebook's future, and that's the quality of its end-user experience and the likelihood it will retain its current users and traffic and continue growing.
I think he makes a good point about the apps. There are literally thousands of apps and when I was involved in Facebook app development I saw _nothing_ that used the social graph for anything interesting.
I actually started a social news system inside Facebook (called Wildfire), the idea was that stories would only get voted up if people passed them from friend to friend. It went nowhere, perhaps that was my fault.
Has anyone seen a really cool Facebook application?
I actually started a social news system inside Facebook (called Wildfire), the idea was that stories would only get voted up if people passed them from friend to friend. It went nowhere, perhaps that was my fault.
Has anyone seen a really cool Facebook application?
I haven't but I've had two ideas I thought were fairly interesting.
1. Tomagochi app where your creature's features are representative of your friends friends. I.e. people with fewer friends will contribute more unique and interesting features to the creature and people with many friends contribute more material for making bigger creatures. This would motivate people to seek both ends of the spectrum.
2. Trusted distributed computing. People would bid for users' cpu time, and users choose who they want. Bids can either be money or promise of payout from the job's results.
1. Tomagochi app where your creature's features are representative of your friends friends. I.e. people with fewer friends will contribute more unique and interesting features to the creature and people with many friends contribute more material for making bigger creatures. This would motivate people to seek both ends of the spectrum.
2. Trusted distributed computing. People would bid for users' cpu time, and users choose who they want. Bids can either be money or promise of payout from the job's results.
I like the dopplr facebook app. It let's you know if any of your facebook friends are on dopplr as well as dropping your dopplr status into your minifeed. Simple and effective.
"That’s true, but it’s even more fashionable (at least in tech circles) to say that Facebook is the next Google, or that Facebook is building the social graph which is worth a lot for some unknown reason and they’ll monetize it later."
At least in tech circles.
That was my point. Both are very fashionable because they're the only two extreme opinions on a very talked about topic.
I'm sure there are plenty of people with opinions in the middle, but moderates never speak out much.
I'm sure there are plenty of people with opinions in the middle, but moderates never speak out much.
I'm always hesitant to bet against anything Buchheit says. But, I really don't get the appeal of Facebook (this is probably why I do systems management apps instead of social network thingies).
I do know, however, that many large companies have historically paid very large amounts of money to know as much about people as Facebook got people to volunteer to give them. There probably is significant value in this information. It's stupid to think that the #2 social network is worth 30 times the #1 social network, but it'd also be dumb to wholly discount the value of all of that data.
I do know, however, that many large companies have historically paid very large amounts of money to know as much about people as Facebook got people to volunteer to give them. There probably is significant value in this information. It's stupid to think that the #2 social network is worth 30 times the #1 social network, but it'd also be dumb to wholly discount the value of all of that data.
Maybe, but for all the hype over Facebook I find it ironic that Amazon probably has more valuable information via Wedding/Baby shower wishlist registeries than all of the social graph in Facebook is worth.
No one is arguing that Amazon isn't worth a very large fortune, and that a big part of their value is in the data that they have about customers and the reviews that customers have written for them for free. But that doesn't really alter Facebook's value (there have always been multiple sources of data about consumers...and yet it is still valuable data).
Amen. I look at Amazons revenues, and the way I act when I buy stuff on the site (piling up more and more from their recommendations) and wonder why they are not cleaning GOOG's clock.
Profit margins seem to be the key.
Profit margins seem to be the key.
This makes sense though. By virtue of being users of this site and knowing how them 'puters work, we are almost certainly outliers in the general population. 'Things people want' and 'things we want' are likely to be different.
Very much so. I've been working sporadically on an article on that topic for 6 months. Still isn't good enough to click publish yet.
"It's stupid to think that the #2 social network is worth 30 times the #1 social network, but it'd also be dumb to wholly discount the value of all of that data."
I agree. To me it seems like the data that one enters into their profile in Facebook is much more organized and uniformly formatted than the train wreck that comprises most Myspace pages. Facebook also one-ups Myspace by making users prove that certain data is true, for example using email confirmations to verify which school they go to.
The bottom line, though, is that none of us know exactly how much data is being aggregated by Facebook (ie. are they tracking things such as profile trends by logging changes in each user's likes/dislikes section?). Just like Peter Norvig explained at SS, the real value doesn't lie in the code, or in this case the application itself, but in the amount/value of data collected. The trick is just finding the right way to manipulate that data to yield the highest value/most profitable data for their investors. And something tells me that Facebook, and its investors, already know this.
I agree. To me it seems like the data that one enters into their profile in Facebook is much more organized and uniformly formatted than the train wreck that comprises most Myspace pages. Facebook also one-ups Myspace by making users prove that certain data is true, for example using email confirmations to verify which school they go to.
The bottom line, though, is that none of us know exactly how much data is being aggregated by Facebook (ie. are they tracking things such as profile trends by logging changes in each user's likes/dislikes section?). Just like Peter Norvig explained at SS, the real value doesn't lie in the code, or in this case the application itself, but in the amount/value of data collected. The trick is just finding the right way to manipulate that data to yield the highest value/most profitable data for their investors. And something tells me that Facebook, and its investors, already know this.
It's a Rolodex for people under 27. Stores contact info, likes, dislikes, etc. of everyone we know, and lets us keep in contact with them so the connections are reasonably fresh when we need them.
Matt, here's an example of money in the social graph: What movies have your friends and their friends put in their netflix queue? Friends of friends might have interests similar to yours, and you might end up renting a movie you might not otherwise have rented.
Friend-of-friend recommendations have a tremendous commercial potential, whether Facebook or FriendFeed have realized them or not. My example above is actually from FriendFeed:
http://friendfeed.com/search?q=&service=netflix
Beware of using "If P then the Facebook guys aren't imaginative" as proof of not P. Also, don't use examples of the usefulness of the anti-social graph to negate the usefulness of the social graph.
Friend-of-friend recommendations have a tremendous commercial potential, whether Facebook or FriendFeed have realized them or not. My example above is actually from FriendFeed:
http://friendfeed.com/search?q=&service=netflix
Beware of using "If P then the Facebook guys aren't imaginative" as proof of not P. Also, don't use examples of the usefulness of the anti-social graph to negate the usefulness of the social graph.
But does this beat Netflix's recommendation service that uses data from all Netflix customers? I'd love to see someone explore that. I've read a lot on the Netflix prize and it leads me to guess it wouldn't, but I would love to find out if I'm incorrect.
It wouldn't necessarily even have to beat it -- you could use synergy.
For example: here are movies a bunch of your friends are watching, and here's how much we estimate you'll like each one. Or, to flip it around, out of all the movies we think you'll like, here are the ones that have the strongest buzz amongst people you know.
Anything that gets people excited about watching movies is good for Netflix, and should be something they can monetize.
You could do the same thing with YouTube videos, or with a music service. Instead of having people send you a bunch of annoying "Hey check this out" messages (by whatever messaging medium), you could look at a widget that shows the current favorites amongst your friends. Sure, a Netflix-style rating service may be more accurate, but a lot of people want to know what their friends recommend.
For example: here are movies a bunch of your friends are watching, and here's how much we estimate you'll like each one. Or, to flip it around, out of all the movies we think you'll like, here are the ones that have the strongest buzz amongst people you know.
Anything that gets people excited about watching movies is good for Netflix, and should be something they can monetize.
You could do the same thing with YouTube videos, or with a music service. Instead of having people send you a bunch of annoying "Hey check this out" messages (by whatever messaging medium), you could look at a widget that shows the current favorites amongst your friends. Sure, a Netflix-style rating service may be more accurate, but a lot of people want to know what their friends recommend.
Doesn't Netflix already do this? I think you can already friend everyone there and see what they watched, how they rated it, what they put in their queue. Why would they pay Facebook for that?
Pretty sure YouTube and some music services have some of this sort of functionality too. Every site does these days.
Pretty sure YouTube and some music services have some of this sort of functionality too. Every site does these days.
If Netflix doesn't keep social graph data, then they won't know the probability of you ending up in a conversation about a particular movie. That alone might make a lot of people choose the social recommendation.
But keep in mind, to be valuable the social recommendation doesn't have to be more accurate than the anti-social recommendation. It doesn't even need to be chosen by more people. All you need is for some people to prefer it and it's valuable.
But keep in mind, to be valuable the social recommendation doesn't have to be more accurate than the anti-social recommendation. It doesn't even need to be chosen by more people. All you need is for some people to prefer it and it's valuable.
But they can take the many movies you rate, find people who rate similarly (which may be way closer to your taste than your friends') because of the large data set.
Making money off of it and justifying a $15 billion valuation does require a lot more than for some people to prefer it.
Also, even if they did beat Netflix at recommendations, how does that monetize?
Making money off of it and justifying a $15 billion valuation does require a lot more than for some people to prefer it.
Also, even if they did beat Netflix at recommendations, how does that monetize?
I won't try to justify the $15B valuation. That's obviously speculative. I just agree with Paul Buchheit that there's interesting potential in the social graph.
Back to netflix, I do think the anti-social graph will work better for some people, especially independent thinkers whose tastes haven't changed lately. For others, what movie they want to watch may depend on what movies their friends want to watch. Or they might have a change in taste correlated to a change in social circle. In those cases the social graph would work better.
To monetize, friendfeed could charge commissions for "get it now" links. They could sell ad space that is as lucrative as search ads.
Back to netflix, I do think the anti-social graph will work better for some people, especially independent thinkers whose tastes haven't changed lately. For others, what movie they want to watch may depend on what movies their friends want to watch. Or they might have a change in taste correlated to a change in social circle. In those cases the social graph would work better.
To monetize, friendfeed could charge commissions for "get it now" links. They could sell ad space that is as lucrative as search ads.
More classic MM haterade fuelled ranting. keep swigging. (with credit to aston)
But I like the article a lot. Facebook now feels like the warm up to something greater. (and probably smaller)
The identity thing is no longer an advantage for them since they opened up beyond schools and coroporates. It is socially engineered toward real identities, but that's all.
But I like the article a lot. Facebook now feels like the warm up to something greater. (and probably smaller)
The identity thing is no longer an advantage for them since they opened up beyond schools and coroporates. It is socially engineered toward real identities, but that's all.
That's the problem with getting greedy. They had a great thing going when the community was more closed, in fact that was their selling point for me. Opening up like this seems very short sighted, but I guess that's what you get with the flipper ethic.
New Onion headline? "Area man constantly bringing up how overhyped Facebook is"
Good point about spam.
Facebook turns your friends into spammers, which isn't helpful.
I don't really use Facebook so I may not really appreciate the problem, but I don't think you can call messages from people you actually know and sent specifically to you "spam", for any reasonable definition of spam.
Question to Matt:
How much do you think your yc startup draftmix is worth?
How much would it be worth if it came preinstalled on every facebook users profile... with social aspects built in... and with the name brand of facebook behind it?
Facebook is worth a ton of money because people under 30 with money visit it several times a day... and its not like other sites like cnn or espn.com or whatever because there friends are on it and there is an emotional attachment to it.
How much would it be worth if it came preinstalled on every facebook users profile... with social aspects built in... and with the name brand of facebook behind it?
Facebook is worth a ton of money because people under 30 with money visit it several times a day... and its not like other sites like cnn or espn.com or whatever because there friends are on it and there is an emotional attachment to it.
facebook has become a useless spam machine. Doesn't work for me anymore.
I have to agree with Matt on a lot of points here. As soon as I heard the phrase social graph, my BS buzzphrase filter peaked.
Never been on facebook and I wouldn't say they are worthless, but $15 bill valuation for a second place player doesn't make sense to me. Then again, a lot of other things don't either.
Never been on facebook and I wouldn't say they are worthless, but $15 bill valuation for a second place player doesn't make sense to me. Then again, a lot of other things don't either.
MM is doing the wrong startup. He should be writing more and I bet he will have a decent size audience. Although i think he mostly likes to be on the opposite side just for the hell of it, i still like to read his post and sure knows how to defend his views by backing them with data. MM is sure making or writing "something people want": controversy.
Thanks, I've been told that a lot lately. I kinda like keeping it as a hobby though. Not sure it would be as fun full time. I already took one hobby and made a living from it and it ruined that.
I don't set out to play devil's advocate. I just don't find it interesting to write about the things that I agree with everyone else on. I won't bother with an article on how the music industry should give up DRM, for example, because it wouldn't be anything thought provoking to anybody anymore. Hell, even the record companies seem to have figured that out by now.
And I don't have much perspective on programming. I couldn't write anything of use on the merits of RDBMSes vs. SimpleDB (though I appreciate some of the articles from people who can). But I feel like I have a pretty good perspective on people and how they use the internet.
I don't set out to play devil's advocate. I just don't find it interesting to write about the things that I agree with everyone else on. I won't bother with an article on how the music industry should give up DRM, for example, because it wouldn't be anything thought provoking to anybody anymore. Hell, even the record companies seem to have figured that out by now.
And I don't have much perspective on programming. I couldn't write anything of use on the merits of RDBMSes vs. SimpleDB (though I appreciate some of the articles from people who can). But I feel like I have a pretty good perspective on people and how they use the internet.
I agree. He's the reason I joined tipjoy.
I couldn't agree more. Glad to see someone make the point clearly though, I wouldn't have wasted as much time on the topic.
Matt's answer to both, based on his recent two articles, is "right now, not much relative to the internet heavyweights." That actually isn't controversial at all.
There's a lot of optimism about Facebook's future, however, that allows people to argue against Matt based on the "just wait until you see what they come up with" line of reasoning.
I'd be interested in hearing from both sides about this future Facebook. As in, what facts, specifically, might change about the world that would make Facebook worth $15 billion, and how likely is it that those changes will come about?