Facebook knows who you are, and that's worth more than you think | Hacker News Reader

Facebook knows who you are, and that's worth more than you think

paulbuchheit.blogspot.com

68 pointsmattjaynes50 comments

I remember how most of my friend were on ICQ and suddenly they all moved to MSN, I never understood why! ICQ had more feature + offline message. Very few at the time used Yahoo's messenger program, even when it also had more feature!

Now most of my friends use facebook, I don't use it as much, but thats mainly because it's blocked by work. Hi5 and myspace never really made that big, at least here in egypt. Hi5 was perceived as something nasty or dirty. Facebook had respect

Anyway, my moral is, it's really non trivial to understand what makes a site popular, and what make people switch.

To replace facebook one have to come with something that is very very very attractive

which is easier to remember: 483960572194022 or imadude7347?

I'd say Paul is biased on this one. His own startup revolves around people keeping track on their friends, and their company's value is on knowing who you are, and who you are connected to.

So, since is selling lemonade, he is telling you that lemonade is really good and valuable.

Or you might conclude that he is confident enough that he is right about this that he started a company in order to benefit from it.

True. He really believes it (and he might be very right about it, i am not discussing that point), but the essay would have been more powerful coming out from somebody that doesn't directly benefit so much from it.

A not so great analogy; would be real estate agents telling you "it is always a great time to buy a house", or "buying a house is a great investment" etc..

Clearly a conflict of interest. And, just because a real estate agent buys a house himself, doesn't make him necessary right.

Anyways, I still think Facebook will do great, but 15 billions is a strech. Maybe it would be sticky for a long time, but I still remember, when everybody I knew, my age, was using ICQ in high-school, then AIM in college, (you couldn't survive without it at campus), and then slowly people moved away from it, and now I barely use it. Maybe, once people added everybody they know, and the novelty wears off, facebook will slowly fade also. Who knows.

Isn't it more like a homeowner saying that buying a house is a great investment?

That would be if a FriendFeed user wrote this article. Paul is like the home builder or developer. He has product that he needs to move and he's marketing. (I'm sure he believes it too, but that is the effect of his writing. But it's no different than pg writing about startups or Joel writing about issue tracking)

The benefit he's selling isn't one that friendfeed users get. Only the owners of friendfeed as a company can monetize the social graph. I don't think friendfeed is looking for acquisition, so I see the financial value of social graphs as a benefit (or potential benefit) that he owns himself, not as one he needs to sell.

He gives verifiable evidence, uses clear logic, and doesn't try to disguise the opinions. Worrying about conflict of interest is more or less ad hominem in this case. It's a mild curiosity worth knowing, but that's all.

Neither, actually. FriendFeed doesn't gather much identity information, certainly not like Facebook. FriendFeed is more content oriented, which is valuable for different reasons.

I wrote the blog post because I thought people might be interested in understanding what exactly they are building over there. I don't particularly care what people think of FB or social networks though.

Where did all the conspiracy theorists come from? I think Paul is right on the money here.

> I get a lot of messages on Facebook, but unlike email, I have yet to receive any spam. That's pretty remarkable.

That is pretty remarkable. My Facebook experience is defined mostly by spam. Application spam, newsfeed spam ... etc

And unlike email there is no way to automatically filter most of it.

There's a greasemonkey script called UnFuck Facebook, which does exactly that - It hides all app things and auto ignores apps sent to you, hides all Facebook ads and makes it look very clean in general.

I was talking about the Facebook messages, which are very similar to email. The App invites are pure spam, so they can simply be ignored. Spam is only a problem when it gets mixed in with something useful.

If Facebook could roll in degrees of separation, it'd be interesting.

What about adding an "is this person important to me" web service for email. For example-- I get an unsolicited email via Gmail. Gmail looks at the sender, pings Facebook's social graph to determine if I know the person or happen to be a degree or two of separation away.

Voila-- a foil for spam and a tool to allow you the ability to sort email based on social "proximity".

Of course, the social graph isn't new. Gmail has a pretty good read on the Social graph. Not as much explicit relationships, but it could determine relationship strength by frequency and size of correspondence.

Facebook has a good start, though I think they have a long road before they have enough data (especially among older generations) to be useful.

Facebook is not going become the next Google. If they do get lucky, they may be the next Microsoft, though.

If Facebook manages to crowd everyone within their walls because of the hassles of spam and anonymity, Facebook will have an enormous amount of control over protocols and standards.

Part of my negativity towards Facebook is because I think that will be a very bad thing in the long run. I agree that it's possible, but I'm praying something better comes along.

I've said this before and I'll say it again. The whole "walled garden" meme is, at best, uninformed. It has an open API (has had one for a long time), it is an open platform (anyone can write apps, any language). What walls are you referring to?

The core functionality of facebook involves personal profiles that people log into. One must join facebook and volunteer personal information. This is the entire basis of facebook's value, without that it's nothing.

In order to interact with these users, you must use Facebook's API, you must use the protocols they decide to support, and you must interact with their servers. It does not matter whether they are open or not, what matters is who controls them.

In order to exploit users using Microsoft operating systems, you had to use their API and you had to use the protocols they decide to support.

Google made it to the top and stayed there by being the best at what they did, and figuring out a good way to make money off it. If Facebook wins it will be because they've managed to get enough people hooked to their network and unable to leave without consequences, much the same way people wouldn't switch away from Windows in the 90s.

For the record, I don't think Facebook is going to become the next Microsoft. That's just where they're headed if they manage to pull it off.

I understand what the core functionality of Facebook involves, the fact that you must join does not make it "closed" at least by any reasonable definition that affects developers.

Also the amount of control Microsoft has over developers and users is not comparable at all with a service like Facebook. You're talking about an OS that comes pre-installed in the computers most people use, they generally don't know how to keep it updated, much less remove it and install a different one. Anyone can join a new web service.

Oh and btw part of the reason Google stays at the top (at least with regard to revenues) IS because they're at the top. Having an enormous inventory is a big part of the ads business.

> Facebook is not going become the next Google. If they do get lucky, they may be the next Microsoft, though.

What do you mean by this statement? Microsoft is larger and makes more money that Google, do you think that Facebook will be bigger that Google?

I'm not sure I'd agree with that; what make you think this?

If Facebook manages to become as useful as everyone is hoping, then yes I think it is very possible. If every internet user in the world in the world had a Facebook account they used, it would be incredibly valuable.

But it has to be everyone. I don't think it'll get there, because I don't think they'll be able to achieve the critical mass of users that Microsoft did with windows. They've managed to lock in college students-- meanwhile millions of people aged roughly 27+ barely use Facebook, and have little incentive to change their lifestyle to accommodate it.

Will Facebook be able to keep hooking college students for 20 years until the older generation becomes irrelevant? Will Facebook figure out how to get these users somehow? If they can't answer that then I don't really see it taking off the way everyone says. I don't think it will happen, because Facebook just isn't better than its alternatives (generally speaking, I'm not talking about MySpace I'm talking about the various other ways people use the internet without using facebook).

a lot more people can replicate a social network feature set than a search engine. That's why is harder to replace Google.

the moment any networking site begins charging for any of their service they will lose 90% of users, and they know it and then the rest of the 10% will abandon because there wont be any value for them to stick around.

Facebook is more like eBay than like Google in this respect. It is easy to replicate the computer technology, but not the social aspect of the site.

Except that eBay has stopped innovating (in either the technical or the human/social part of their technology), while Facebook is constantly trying new things.

allow me to say Fb is not any close eBay

Please explain. In what respect is Facebook unlike eBay? Is it better or worse?

it's not hard to see the difference

This argument doesn't hold weight at all.

"eBay is almost irreplaceble because it's a marketplace"

Are you saying marketplaces can't be replaced any easier than social networks (particularly, social networks with suprisingly passionate users)?

"Any marketplace is difficult to replace because if it already works well is because is reaching a massive audience, even if they are not actively particapating in it. At eBay there already people who have their rating etc so it's hard to beat that."

Ok, first off, the formal definition of what you describe is Network Effects - i.e. Metcalfes law. Facebook benefits from that just as well as eBay, and perhaps, as Paul said, even more so, because there is more trust. Secondly, a lot of the "rating" is artificially generated, comes from scammy behavior etc, so it doesn't hold much weight.

"Most people know eBay even if they never bought something off it" ...

And most people know about facebook even if they've never used it.

I think anyone that underestimates Facebook does so at their own peril.

I had already erased my comment before you've responded.

anw, maybe I am wrong but I don't think you can easily replace a marketplace that works.

Ok, first off, the formal definition of what you describe is Network Effects - i.e. Metcalfes law. Facebook benefits from that just as well as eBay

no. building a connection on ebay (i.e. buying or selling something and leaving feedback) requires a lot more effort than building a connection on a social network (adding a friend). that's why users are more locked into ebay than any social network.

Most of the people on facebook are more than just "adding a friend". There is a lot more depth to it. These are genuine relationships that have been there before they hit facebook.

i didn't comment on the depth of the relationships. i commented on the investment needed to create them online.

FaceBook's network effects are nowhere near as big as EBay's.

When I first started making friends online, we all got DeadJournals. It was free, it didn't have invite codes like LiveJournal, it wasn't "too young" like Xanga, and it wasn't "too old" like Blogger (I was a freshman in college at the time, and most of my friends were high schoolers).

Then one person in my group of friends got a LiveJournal, and with it, an invite code. LiveJournal was seen as higher-status, and so over the next 5-6 weeks, we all migrated over. Every week (that's how long you had to wait to get an invite code), the person who just got their LJ code would announce "I've got a code. First person to shout gets it" in an AIM chatroom, and one more person would move over, until we were all on LiveJournal.

Then, when my friends graduated high school, there was a big split between those who went to college and those who didn't. Those who didn't usually went to MySpace, because their local friends were all there and they felt they had less in common with those of us who were college-bound. Those who did would post messages on their LJ that said "I'm on FaceBook as Jane Smith @ SomeCollege", and then everyone else would comment with "OMG I HAZ FACEBOOK! Friended you! [And if they're polite, they'd say what their real name was, so the person didn't get lots of friend requests that they had no idea about.]"

Similarly, when LJ did something stupid and pissed off all of fandom at once, there was a mass exodus of people for GreatestJournal. Everyone would post "I'm now at username@greatestjournal.com", their friends would leave too, and they'd all friend each other on the new site.

Analysts are right that nobody ever leaves a social network site while all their friends are there. Instead, they leave as groups. It's very much like the tipping point where somebody grabs their coat at a party and then everyone gets up to leave.

EBay is very different, because if you're finding a seller for a rare item, you have no other means of communication other than EBay. EBay holds a monopoly on your means of finding the person you're looking for. FaceBook deals with real social relationships, and real social relationships always have backchannels. If you're FaceBook friends, you probably have regular buddy chats over instant-messaging, or you see each other at school, or you go out for lunch. If something better comes along, you can say "Oh, I found this cool social networking site, let's all go check it out."

You have a point. I have less personal experience with social sites, but it seems to me that the more information about your relationships you build, the harder it becomes to leave. Think of leaving Facebook as losing your phone and the contacts you have on it. It's up to Facebook to make it like this, but the potential is there.

Sounds like Paul is continuing to underline what Zuckerberg has been saying, stressing the importance of the "social graph."

It's amusing to see people involved in industry X continue to blog about how industry X is worth more than people give it credit for.

There's no doubt it's wealth (all information is). Keeping in contact with people is big business (cell phones, Outlook, vacations, dating sites, etc) but there just isn't a way to monetize this wealth. If it was open source or non-profit, it would be around until people got tired of it), but if Facebook doesn't get money in exchange for the wealth they've created (and soon), then that wealth will disappear and social networks in general may be branded as a bad investment. Actually, if that leads to a free and open alternative, that might not be so bad afterall.

FaceBook's only a small part of the average person's social graph, though.

If you look at my FaceBook Wall or SuperPoke or Scrabulous list, it's mostly friends from high school or violin. They predominate because I have no other means of getting in touch with them. The people I hang out with most in person are all Amherst alums in the area; they almost never appear on my FaceBook, because I can talk to them in person. If I do write something to them online, it's through PlanWorld, which is an Amherst-only social network hosted on an Amherst student organization's computers.

There's another group of friends I have: folks from my Harry Potter fandom days. I'm FaceBook-friends with nearly all of them, but there's little activity between us. Instead, I talk to them over AIM. Why put up with the latency of the FaceBook wall when you can communicate instantly?

Then there are former coworkers from work that I stay in touch with. Most of these people don't even have FaceBook accounts, though a couple do. I use e-mail and LinkedIn to keep in touch with them, or I send them an IM and setup a time to get together for lunch.

I think a lot of people that make a big deal about the social graph are Boomers and Gen-Xers that are keen observers of today's "always connected" culture, but aren't really participants. They know that social networking is a huge part of young people's lives, but have no idea just how pervasive it is or how many options people have. The average American teenager now "talks" through phone, text-messaging, FaceBook, MySpace, LiveJournal, e-mail, AIM, and a half-dozen special interest sites. There've been conversations I've had that were half-verbal and half-AIM, carried on through a mix of typing and talking with the other participant sitting 6 feet away. The FaceBook social graph is pretty inaccurate when you consider all the options for back-channel communications.

>What else is highly profitable on the internet? Search.

Actually, what is profitable is traffic, not search. Google gets paid by website proprietors to send traffic their way. They do not get paid by users for their search product.

Actually, after being in the industry, I would have to disagree.

Google makes so much money because of the high volume of traffic combined with the targeting they can do as a result search queries, knowing users and all that. I actually click gmail links occasionally because they relate to the email thread I am in. Discussing a camping trip the actual campsite I wanted to go showed up as a link! That combo of high traffic and highly targeted (and therefor high conversions) is what creates the value.

If Facebook + Loopt develops critical mass, it'll be a thing to behold.

Seriously, why doesn't everyone believe this? I've googled HN and the web, and I'm not seeing a lot of people pointing out the F+L duo. The user base is minimal for the Loopt Facebook app. As far as I can tell, I'm not making an obvious statement.

I don't get it. These two technologies together answer The question of the internet.

Explain it to us!

i think he means that missing link of directly tying the internet back into real life.

despite what people like us think, the internet is still just entertaining emails coming out of a confusing box for most people.

Glad I'm not the only one who gets it!

Though, it isn't just connecting the internet to real life, which still sounds mundane. The real Big Deal is the network effects you get from the feedback loop between the two. If you've read Guns, Germs, and Steel the two together in a social context create an autocatalytic environment, which is essential to every form of progress in GGS.

I actually think that the question of the internet is a different one.

I think the barrier between the internet and real life is the signal to noise ratio. we have tons of great examples, this site being one of them.

when someone comes up with an efficient and easy way of personalizing exactly what information you get and what is blocked without the fear of missing something important, they will become a huge company.

Hi mdemare,

I hate being so offtopic in replying to your comment here, but as YC doesn't have private messaging, I hope you'll see this. Could you put your email in your profile or email me at technoguyrob @ gmail?

I've put my email in my profile, but my point was that exploring the possibilities of combining FB and Loopt would make a GREAT essay. Lots of people would be interested, (certainly on HN), not just me.

Good arguments with an interesting look at a potential future. Now what about the hundreds of millions of good citizens who don't spam or commit fraud but don't want to put their personal info on a social site like facebook? How do they fit into this picture?

And that's exactly why I don't trust them.

I'm very wary of what any entity with that much personal information might do with it.

(Damn!! And I'm not even registered!)

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