The Business of Facebook Applications: Social Graphs, Applications, and the Future of the Web Graphing Social Patterns Reid Hoffman, 9 Oct 2007

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?

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?

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

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

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

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

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

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

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

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

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?

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?

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

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

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

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

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

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

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

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

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

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

Questions