Will Facebook Ever Hit 2 Billion Users?

I just read Jason Hesse’s recent article on the falling stock price of Facebook. It makes some good points and generally I agree with it’s conclusions around the execution of the IPO and possibly today’s valuation. The multiples on revenue were after all, many times that of Google at IPO, for example.

Some of the other conclusions around future growth, I feel hold less water. Jason states:

“More than 900 million people is enormous, but could the company realistically double its monthly users? Anecdotal evidence would suggest not. ” …. “Naturally, the company’s growth could come from new sign ups. Facebook’s largest market is Europe, with more than 230 million users. This means more than one in four people in Europe are signed up to and use the social network. So realistically, there is little scope for this to grow significantly – if you’re not on Facebook already, the chances are you just don’t care and won’t join anytime soon.”

I don’t think I agree with this statement. Why won’t people care any time soon? I consider Facebook and social networking as a part of our lives, to be similar to the take up of email and other new technology, like the web itself. Even my Dad has a profile now, although admittedly for a 75 year old he is pretty well connected with PC’s, tablets and Android phones!

I also can’t help feel the sentiment of this statement is similar to the naysayers of the web 10 yrs ago; I would conclude social networking is following a very similar growth path.

With 1.5+ billion people on the regular internet but with 5 billion mobile subscribers, who are all fast moving to Smartphones with internet, the numbers also don’t support this statement.

And why would more than 1 in 4 people in Europe not want to join Facebook?

It’s taken just two years for Facebook to nearly double it’s user base.

The real issue IMHO is not that Facebook will stop growing because people don’t want to be on a social network and embrace the sweeping social change which those services is causing, but whether Facebook can maintain and evolve a service which captures that growth.

Given that a lot of the growth will be users who access the service by mobile, this is the second issue which faces Facebook (no pun intended). Can a service routed online historically successfully transform it self to become the stalwart of the mobile world?

In summary then the -in my view inevitable- growth of users numbers in Facebook is theirs to screw. They must:

1) Continue to innovate their product and maintain existing users attention
2) Navigate the cultural preferences of the untapped developing markets
3) Become a truly mobile orientated company, with the same level of UI/Ux on mobile as they demonstrate online.

Arguably they are currently failing at no.3

Finally, there is the spectre of “Privacy”. Jason says:

“If anything, as privacy concerns continue to grow, more people will leave the social network.”

I think this is also unlikely UNLESS Facebook makes a very serious faux pas. Radical transparency is not for everyone but there is good evidence to suggest the trend is in that direction. I can’t help feel this argument, that social networking has a limited growth due to privacy fears, is akin to the talk about e-commerce never taking off online for the mass market because of fears of credit cards not being secure online. In other words, it’s a red herring.

Compuserve was my first ever email address back in the mid to late 1990’s. It then slowly died over a period of years, as destination closed wall portals were trumped by the world wide web. Facebook, if it doesn’t continue to aggressively become more open, may risk it’s position as the ultimate social graph and silo of social data. (BTW, that little button in the top bar,  a globe with two striped lines, took you out onto the ‘scary’ WWW)

Facebook must get it’s future strategy right and that strategy must be around becoming more a platform and less a destination site, if it wants to maintain it’s position as the biggest silo of social data on the web. If it doesn’t do this fast enough, it will likely go the way of AOL and Compuserve before it, or be out manoeuvred by a future more open and yet to exist mobile competitor.

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I Love You, I Hate You: The New Influence Economy

The world of customer relationship management and brand management is changing fast; again. This is going to be a shock to many companies.

Some businesses have only just started to remember that their customers might actually be right, others have only just got their heads around CRM and being “online”. Others continue blindy on trying to save money by passing the leg work on to their customers and annoying us all in the process.

Entering your mobile number at a call centre in a cue, only to be asked it three more times once you get through, is just one great example.

Rude retail staff, telephone operatives and n employees who can’t speak basic English or empathise with customers are others.

The Enlightenment: 2011

The more progressive companies are waking up to the new economy of influence – better known as social media.

Klout and PeerIndex as businesses both exist for a reason. They purport to measure “influence”.

The passionate and vocal devotees (or detractors) of your brand online are fast becoming the kingpins of the next 10 years of successful brand building.

Ratings scores like Klout and Peerindex will become a new currency in a world of social networking, online endorsement, virality and brand reputation. Even some credit score companies are already experimenting these scores in to account and providing third parties this data alongside traditional scoring methods.

Brands need to wake up fast to the fact that the price of a ticket is no longer necessarily the most reliable indicator of the “spending power” of a customer.

Klout and Peerindex scores are fast becoming the standards of "reputation" online; but how do they compare and what do they really mean? It's early days...

What is the on-going endorsement worth of a customer with an influence score of 59 but who travels economy, worth over an Upper Class passenger who keeps quiet and never endorses your brand?

I don’t have the right answer, but it’s certainly the right question.

Who do you think you are?

I’ve flown with Virgin Atlantic since my first ever transatlantic flight age 22, to sunny Los Angeles. Since then I’ve been a devotee; but as this article attests, last time I flew I was very disappointed.

I’m was left wondering if my friend Milo had been with me, whether I’d have had the same experience.

That time around a train had broken down or something, but despite my arriving very late we sailed through check-in just 30 minutes before departure and were upgraded, although at least he had got there on time. I however, had not, nor was I checked in. The difference is, at the time he was working for The Telegraph.

However in my own way to my own audience – and certainly in my industry – I have some influence:

  • I write for WIRED and do guest blog posts
  • My Klout score is reasonable as is my PeerIndex score.
  • I’ve invited friends to join Virgin Miles.
  • I can identify specifically at least 25 people who I’ve directly influenced to fly VA over other airlines in the last 24 months, because Virgin Atlantic has been a lovemark of mine.

As with most things we love, we naturally endorse them and want them to prosper. They represent part of me. As I said in this post about brand relationships and lovemarks:

.. when you as a brand [a lovemark] behave poorly I feel you’re attacking not just me as a customer but me as your brand.  Your bad performance means subconsciously I feel like I’ve performed badly, because a little bit of your brand has become me.

It is true that influence scores have their problems and on these the two specific companies mentioned (here’s another bloggers overview of PeerIndex and Klout) although they are the current market leaders, the jury is still out.

The Context of Influence Matters

Who are they the influencers of? If I have 10,000 followers on twitter who are all unemployed, or worse all spambot fake accounts, how influential is that? ..the answer is of course not very.

Both services (PeerIndex top radar image, Klout bottom list) try to work out WHAT I'm influential about. Klout lists me as influential about "Germany" ... clearly there is still some work to be done!

These things are changing though. They are becoming more sophisticated. This is inevitability; they will become more accurate.

Smell the coffee anyway

Consider where we are today in reputation scores as the AM radio of the early 20th Century; rough, low fidelity, all a bit hit and miss. We’re not going to have to wait 100 years for it to improve before we get to DAB digital Stereo radio. Try 5 years.

So listen up Virgin Atlantic when next time you give me crappy service, or maybe I’ll respond to that Executive Club email from British Airways, or maybe I’ll send tweets, or write a blog post. The inherent viral nature of social media means these outbursts can have disproportionate impact.

Not significant perhaps you might think, given that I’m just one passenger and I’ve probably only taken nudging thirty transatlantic flights in my life; and they weren’t even all Upper Class?

However, you must also consider the influence of the people I influence

To fully measure influence you need not just context but to understand the TRUE reach of an influencer. That becomes both computationally challenging and inherently hard.

What is my endorsement for the next 15 year’s worth to your brand?

What is it worth to your competition?

If your company’s brand does not get its head around the new economy of influence now, you’re at best missing an opportunity and at worst inviting persistent damage to your reputation; and therefore your profits.

On the horizon are even more advanced interpretations of brand popularity which take the influence of individuals and brands, combine it with a sentiment for popularity, public opinion or value within a virtual currency and publish it for all to see. Empire Avenue is just one of these new indexes, entirely virtual in nature based upon 1000’s of peoples social networks, virtual investments and reputation.

Microsoft is using Empire Avenue to profile the popularity of it's Xbox brand in Empire Avenues Social Stock Market

Brand ambassadors are the future of your business and will disproportionality impact your bottom line – that fact is here to stay.

 

Why Skype as a Cross-Over Brand is important to Microsoft

Everyone and their dog has reported on the acquisition of Skype to Microsoft this week, it even made the BBC 10 o’clock news, so I need not cover it here again in any detail.

What I will highlight is an important subtlety which strategically may be significant to Microsoft going forward but which I’ve not yet heard mentioned.

The world of social media has accelerated the blurring of lines between work and play, enterprise and home, business and personal.

Microsoft continues to take the bulk of it’s revenue from traditional enterprise software sales while it sinks millions into trying to keep pace with the future: mobile phone and internet, social (that wonderfully woolly catch-all) and Enterprise 2.0 (much as I hate that term).

LinkedIn and Facebook, plus the up and comings like Twitter and Huddle, are proof that the business world is in mid-collision with the personal web. Functionality like “Chatter” in Salesforce, and social CRM systems are the tip of the iceberg.

It is becoming harder and harder NOT to do business, or as a customer engage with brands, on the services which until recently were reserved for friends and personal pleasure.

Aside from MSOffice and possibly Bing search, Microsoft’s services remain pretty siloed. It’s Outlook and Exchange in the workplace and Hotmail at home.

MSN Messenger is not, generally, used in the office. Microsoft Windows Phones used to be a business device, but they took so long catching up many companies have switched to Apple iPhone or remain with RIM’s Blackberry.

Skype in contrast is a hybrid – one of the few big 2.0 web companies whose brand neatly straddles work and play. It is inherently social and is “acceptable” to use it in a business or corporate setting as much as if sitting at home on the sofa.

More and more services and brands will occupy this mongrel position of being cross-over brands especially as everything becomes mobile.

Happy Happy Joy Joy. Well, for now.

Are we really going to be carrying TWO mobile devices (one for work and one for home) in 2015? I doubt it. Blackberry have already begun to attend to this issue with their new O/S 7.0 devices due this Summer; it remains to be seen how successfully they’ll be aiding that separation on one handset.

Skype’s culture is pretty cool (Skype’s Estonian office is one of the funkiest I’ve ever visited) and happily hopefully for the recently swalled Skype workforce, many of the people I’ve met at Microsoft in recent years have none of the baggage and arrogance from yesteryear- in fact they are the abject opposite.

People talk about the corporate bureaucracy at Microsoft (and I’m sure it’s there) but as the old guard inevitably rotate out, change must be making root and spreading fast.

Microsoft remains on the back foot with Windows Phone 7.0 but they have a large war-chest of cash to play with – and a few more ballsey acquisitions of hybrid cross-over companies like Skype might be just what they need to keep pace.

Alternatively, the usual problems with integrating two very different companies, may just make the thing a premature Christmas turkey purchase.

Spam alive and well on Social Networks

Its been a while since Ive been spammed on a social network; infact since I last got junk from MySpace, but it appears spamming is alive and well. Today I received an invite from “Erica”. I meet alot of people around the world so I wasn’t sure if I knew her or not. A quick look at her profile gave the game away – some people I know are very popular, but 28,000+ friends? I think not.

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[For those who cant see it on this graphic, it says Erica has 28,623 friends … yea right. She’s cute, but she’s not 28,623 friends cute!]

It is, without doubt, difficult for sites (including our own at Rummble) to manage and avoid unscrupulous users using the site to spam unsuspecting users about their products or to drive traffic to porn sites, but there are obvious things one can do. Safeguards we employ includes:

  • Simple “Abuse” reports for people sending fake invites
  • Automatic highlighting of unusual activity in the system (excessive friend invites for example)
  • Captcha technology which is randomized to prevent scripts hijacking invite functionality on the website

With Hi5’s size and funding, I’m surprised that these are either not in place or not being actioned. There really is no excuse.

Suffice to say I will not be purchasing from “Die Dada” mobile portal. I had hoped that this sort of spam selling was something of the past in the mobile industry; clearly that hope was premature. It does nothing to induce confidence in users and if they are willing to use spamming techniques to gain traffic and potential sales, then they are likely to unscrupulously charge your credit card for subscription downloads on mobile too! So avoid! …you have been warned.

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