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The Business of Facebook: Social Graphs, Applications, & The Future of the Web
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The Business of Facebook: Social Graphs, Applications, & The Future of the Web

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LinkedIn Founder/Chairman Reid Hoffman's keynote presentation at Graphing Social Patterns 2007

LinkedIn Founder/Chairman Reid Hoffman's keynote presentation at Graphing Social Patterns 2007

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  • 1. The Business of Facebook Applications: Social Graphs, Applications, and the Future of the Web Graphing Social Patterns Reid Hoffman, 9 Oct 2007
  • 2. Observations and Themes
    • Social Networks and Platforms
      • The discussion in 2003; the discussion now
      • Contrast: Facebook, MySpace, Ning
    • Social Networks and Professional Networks
      • Differences in use cases
    • One graph to rule them all?
    • Facebook Platform: some of the opportunities enabled
    • What does the social platform mean for the evolution of the web?
  • 3. Social Networks and Platforms
    • In 2003 -- the debate around Web 2.0, social networks: what was new?
      • Feature vs. Application vs. Platform
    • Temporal History
      • MySpace: ability to hack in “widgets”
      • Ning: the platform for building any type of social network
      • Facebook: the first platform on a broad social graph
    • Why are Social Networks platforms?
      • Social network embodies key data for applications useful in the real world
      • Early example: Friendster as a Dating Application
      • This data + consumer engagement = channel for these apps
    • Key Elements of Facebook’s platform
      • Extend functions of profiles, communications, newsfeed
      • Integrate general web applications with data, relationships, and communications
  • 4. Social Networks and Platforms
    • Facebook and MySpace
      • MySpace: integrate “includes” of widgets
      • MySpace has something like a social graph of linkages,
        • But no access to a real set of relationships
        • And no access to key data (user, profile)
        • And no platform access
      • No access to communications or newsfeeds
    • Facebook and Ning
      • Ning: program your own social network
        • Control of policy, set-up, feature set
      • Facebook: build upon massive social graph
        • Acquire customers
        • Leverage key relationships
        • Leverage existing communication scheme
    • Facebook: platform leverages a communications architecture and a newsfeed “sharing” space
  • 5. Social and Professional
    • Facebook and Linkedin: Different use cases
      • Search
        • Contrast: search by name
        • Contrast: search for “open source expert”
        • Contrast: search for pictures
        • Contrast: search for company connections
      • Answers
        • Contrast: answers application(s) vs. Linkedin Answers
      • Messaging
        • Contrast: messaging environments (brokerage vs. general sharing)
      • Services + Jobs
    • Simple misconception: any communications infrastructure can be used for anything.
    • Where is there interesting overlap?
      • Public profile presence
      • Potential business applications upon the social graph
  • 6. One graph to rule them all?
    • Will there be one social graph platform?
      • First: is there only one social graph? (Where do Friendster, Tagged, Hi5, Bebo, etc. fit in with this)
      • Second: is there one graph which contains each different sort of relationship (friend, family, acquaintance, professional, etc.)?
    • My theory: there will be multiple “graphs”
      • There may be multiple social graphs: semantics of the connection
        • N.B.: the odd population of graphs, such as Orkut and Brazil
      • One graph that includes all of the types of relationship in one perfectly orchestrated universe: not!
        • This is the geek, blogger dream.
      • It may be important to have different baseline rules on different brands and different networks.
    • Fortunately: a massive valuable platform does not require the truth of there being only one big social graph.
      • A wide platform is sufficient for an interesting ecosystem
  • 7. Facebook Platform: possibilities
    • Studying current applications
      • Communications: walls, poking, gifts, mail
      • Games: the obvious but also
        • Comparing people
      • Music and Media
        • Movies
    • Future possibilities (likely)
      • Iterations off major use cases today
      • Interesting to see what happens with “friending” applications, like Top Friends
      • Honesty box
    • What’s new?
      • The theory of platforms is to enable tons of creativity
      • What other apps would be in a 1-1, 1-many, many-many communications environment with your friends?
  • 8. Facebook Platform: limits
    • Is there a limit to how many applications any user will have?
      • Rising above the noise
      • Why the metric that Facebook reflects shifted to focus on number of active users
    • The areas that have not worked (thus far):
      • Business
      • Politics
      • Money
    • The challenge of the “second act”
      • Just like the web: the discovery of interest is hard
      • But: the key thing is the “second act”
    • Role of creativity
  • 9. Facebook Platform: economics
    • Today: parallel to the internet gold rush
      • CPI Installs
      • Run of site ad inventory
      • Ad network aggregation
    • Challenges Today:
      • Applications inserting interruptive ads as ways to generate income
      • Incented installations
      • Installations financed by future hope (not sustainable)
    • Future possibilities
      • Targeted ads
      • Virtual or real currency
    • Platform innovation?
      • Developers
      • Facebook
  • 10. Platform: economic analysis
    • What will be certainly the case:
      • Low cost apps with sufficient sustaining appeal
      • Applications that fit the Facebook use cases
      • Evolution of key use cases
    • What is still up in the air:
      • Establishment of substantially new use cases
      • Major applications
    • Massive competition a la the web:
      • Someone else will try to give away anything you charge for
      • At least three people will try to copy anything that works
      • Competition from companies and from individuals
      • People will experiment, but stickiness will matter
    • Key factors: distribute, use, retain -- plus economics
  • 11. Facebook and the Web
    • One angle: new patterns of eMail and communication
      • Sharing
      • New cycle of communication: the genius of Facebook photosharing
      • Look forward to applications the replicate that genius
    • Future of discovery of the web?
      • Discover through friends and sharing: certainly a piece
      • Certainly discovery of people’s social lives
    • Applications and the platform:
      • Can one website be everything?
      • Social graph -- applications
    • What does the microcosm mean?
      • Not one graph to bind them all, but an interesting new world
  • 12. Summary
    • Many of the new interesting entrepreneurs from college will first write Facebook applications
    • There will be an interesting ecosystem between websites and Facebook applications
      • iLike (music) and Flixter (movies)
      • Websites establishing their position (contract, acquisition)
    • Economics will be a real issue (just like the web)
      • General recommendation: keep costs low
    • Constant newness will be important for entertainment
      • Facebook accomplishes this through the platform
      • Applications will need to keep this going
  • 13. Questions