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Social Apps are Big Business
While a lot of my blogs criticize Facebook for a plethora of reasons, I think we all know that it isn’t going anywhere. While the IPO did not go as planned, the fact remains that the company still has 900 million users. Yes, advertising dollars are down as more people shift to mobile; however, when you have 900 million users and growing, it is impossible not to make a profit. The company needs to change its profit model, and pivot a little bit, but I am confident that it will be back on track-financially speaking. Anyway, while Social “Giants” like Facebook and Twitter get all of the attention, a different social networking channel is growing at an unprecedented rate. “Last month, Vitrue — the social media marketing firm for Facebook advertising — was acquired by Oracle for $300 million. And just this week, customer relations giant Salesforce gobble up Buddy Media, another social media marketing platform, for a cool $745 million. Both Vitrue and Buddy Media happen to be social enterprise apps: tools geared toward helping big businesses capitalize on social media.” These social media tools are being adopted by Big Businesses and Corporations, globally. These social media apps aren’t used to simply keep in touch with existing customers/clients, they expedite a myriad of other functions:saving time, money and energy. Company departments such as Research and Development and Marketing implement these Social Apps in every facet. Social Apps are “Big Business” and are being adopted by “Big Businesses.” Do you think social apps streamline company objectives? Do they help generate more revenue? Have you been engaged by a company’s social app platform, and what was your experience? Love to hear feedback.
D. Spinelli
Drawing the parallels between Facebook and ‘The Matrix’: Is Zucky the ‘Architect’…
“You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.” -Morpheus, The Matrix
I’m sure many of you have seen this film. Keanu Reeves plays the part of Tom Anderson, an average office-rat by day, and Neo, a computer programmer/hacker by night. He is recruited by a group of ‘rebellions’ and eventually takes the ‘red pill’ (over the ‘blue pill’: ignorance is bliss?), thus embracing the painful truth that the world as he knows it is one big computer program. He is told that his mind has been controlled by intelligent machines for the duration of his life, as well as the fact that these machines harvest the bioelectrical energy of humans, who are kept docile within the Matrix, a simulated reality of the world (sound familiar). Without this ‘bioelectrical energy’, the machines would cease to live.
The idea of ‘The Matrix’ has been influenced by numerous religious beliefs and philosophies including those of Abbott, Plato, and Descartes. The thought of our world being controlled and monitored by intelligent machines is both scary, yet highly unlikely.
However, as the internet becomes an increasingly habitual platform for facilitating communication and personal relationships, there are an increasing number of parallels that can be drawn between the giant social networking sites and ‘The Matrix’.
“Your appearance now is what we call “residual self image”.
-Morphues, The Matix
Yesterday, we had posted an editorial detailing the unsettling news that Facebook, the site that serves as a platform for creating and maintaining your ‘residual self-image’, may allow children under the age of 13 to use the social networking service. This move was inevitable, though the dropping stock price has served as a catalyst. Facebook has been keeping tabs on it’s users for years, and now it is moving on to children, and FB most likely knows more about you and me than our closest friends. Furthermore, the social networking service sells this information, one of it’s biggest money makers. It’s other revenue sources include advertisements, and online games. All these sources of revenue rely on the continued and consistent use of the service by it’s user base. No users, no money…Can you see the parallels?!? Let’s break it down:
Facebook: Users + Activity = Money.
Matrix Intelligent Machines: Humans + Bioelectric Energy = Life.
Now, let’s not be too cynical…doesn’t every company rely on this equation? Without users/humans/consumers, the company has no market to sell it’s products, and without these users/humans/consumers putting in some energy, the products the company is selling won’t be bought. However, what other company has the vast knowledge of it’s userbase like Facebook does? Furthemore, what other company makes billions of dollars selling this information? Answer: None…
Do you control your information on Facebook, or does Facebook control the information on you??
-C. Sullivan
Look Ma! 2000 Friends!
I am always perplexed and yet simultaneously curious when I see a child walking around with an iPad, smartphone, or any other type of mobile device. Are these items making children more savvy? Maybe parents want their children to become technologically proficient to stay ahead of the curve-especially in such a competitive work environment. In case you didn’t realize, I am being overtly facetious. Anyway, when I was eight, I was outside playing backyard football, shooting hoops and doing what normal children do: or did? In any event, a rumor has surfaced that Facebook now intends on allowing users under the age of thirteen to use the social platform. Sounds like a fantastic idea to me! What an altruistic move by Facebook; they definitely want to extend their service to younger people so as to enhance their lives. Since the company went public, the companies stock has precipitously declined. As we all know, and as I have stated time and time again: Facebook lacks a steady stream of REVENUE, as people continue to move to mobile devices. So what does the company do? The answer is so simple: exploit the youth – a completely untapped goldmine. With users under the age of thirteen, the company will surely increase its 900 million users significantly. Of course, the company says that the kids accounts will be linked to their parents, so as to provide protection. However, this possible move is clearly a ploy to generate more money. More children than adults will be using Facebook from a browser. That means that the company will be able to generate more advertising dollars, as well as make money from games that children will surely nag their parents to buy. The ironic thing is that I write this blog as I develop my own smart phone product. So I guess it’s not in my interest to rag children for carrying smartphones, tablets, etc. On the other hand, I don’t think that youngsters should have these devices. I think that they subject themselves to things that they are not ready to see, and should not see. Furthermore, it makes children vulnerable to sick people that are on the web simply to associate with kids. If less children carried smart phones correlated with OptiLaunch making less money off our products, I have no qualms: good! I’d rather children be safe than exploit them to the myriad of liabilities they face on the web.
Bottom line is this…Facebook knows that the majority of everyday interactions between children under the age of 13 are mediated by the childrens’ parents. Once the parents lose this control, there is no telling what kind of serious danger children can put themselves in (they don’t know any better!!).
Facebook…Zucky…Take a step back and think of a better way to rake in profits than exploiting youths.
-D. Spinelli
Zucky not so Lucky
If Mark Zuckerberg wasn’t already stressed out enough with the issues pertaining to the recent IPO fiasco, as well as the escalating patent wars between Facebook and Yahoo, then Steve Bezos has just added the cherry. Amazon stated today that they had extended their patent portfolio to include ‘digital gift giving’, a service that allows Amazon users to send digital gifts (e.g. downloadable books, music for the Kindle Fire). Some of the claims of this issued patent include allowing the gift-giver to forego paying for the digital ‘goody’ until the user has accepted it. Sounds like a pretty broad set of claims in an age where an issued patent is becoming increasingly hard to come by.
Karma Science, a service founded less than a year ago and funded by Kleiner Perkins, one of the largest and most established venture capital firms in the world (other investments include Zynga, Google, AOL….and Amazon), is a social gifting site that runs on mobile devices. Karma was recently acquired by Facebook, on the day of the social networks not-so-mammoth public offering, for $80 million. Now, less than two weeks after the multi-million dollar acquisition, it seems like Facebook may be headed for further patent litigation – though not with a struggling company (i.e. Yahoo), but with Amazon (AMZN has twice as much cash on hand than YHOO). It is still a bit early to tell whether or not the service that Karma provides will indeed infringe upon Amazon’s newly issued patent, though this is just another setback for the social networking site which has seen nearly a 30% drop in value since going public.
Will Zuckerberg stand-up to Amazon and fight for his newly acquired company, Karma? Or will actual ‘karma’ bite the young and inexperienced CEO in the ass and force him to license the ‘digital gift giving’ service from Amazon? Furthermore, if Amazon did indeed win the potential ensuing patent battle, would Bezos license the technology to Facebook, or would he keep this golden-goose for himself, thus creating somewhat of a modern day monopoly?
I’m not sure anything, especially not a digitalized e-commerce company (not even Amazon) will be able to replace that “magical” feeling one gets when he or she goes to Macy’s in New York City in mid-December – though, why even make the trek to West 34th when you can do all your shopping in the comfort of your own bed (#obesity).
Facebook may not be in as much trouble as Macy’s, but they are starting to feel the heat of larger, more well-established companies, and Zuckerberg may be beginning to realize that the transition from a mere social-networking site (which, by the way was worth $100 BILLION at its peak), to a possible mobile phone provider and even an e-commerce .com, may turn out to be a much more tedious journey than he had originally anticipated.
Should investors keep their faith in Zuckerberg, the original mastermind behind Facebook, or may it be a good idea to nip the problem in the bud (inexperience), and find someone who is better fit to run the company. The only way to achieve the latter would be to actually convince Zucky to step down (Zuckerberg may only own 28% of the company, but in actuality he owns over 57% of the voting rights).
Either way, Facebook needs to come up with a concrete plan for the future, and creative pivoting options in the case that they run into any more problems like the ones that have arisen in the recent past. Let’s hope Zucky isn’t too over his head.
-OptiLaunch Team
Facebook Has their Evil Eye on Chomping It’s Way Towards a Mobile Phone
I don’t know exactly what Mark Zuckerburg’s vision was when he came out with ‘The Facebook’ (a minimal viable product) that cost about twenty thousand dollars to get off the ground. However, as the site evolved and grew, so did its advertising revenue. When Facebook was a private company its revenue model was quite simple; with 900 million users in roughly eight years, companies wanted to advertise…makes sense, right? But now, after the stock has trickled down from it’s original $38 dollar IPO (Down near $28 on the day), investors want to know how the company is going to generate revenue. Clearly advertising dollars are down, which makes complete sense, as mobile phone sales significantly out-do desktops and laptops. It’s hard to advertise on mobile phones – fact. Investors don’t give a shit about how Facebook is going to increase revenue and adapt to an ever-changing marketplace – they just want results. Therefore, Facebook has already announced its desire to tap into the mobile phone market and produce its own device. Now that the company has gone public and has an arsenal of billions at its disposal, it makes complete sense for them to move in that direction. How should they go about it? Creating a mobile device isn’t simple, and to make matters worse, Facebook has absolutely no experience in the field. The idea is excellent; Facebook operating on its own phone could do wonders for the publicly traded company. However, with no experience, it will be a daunting task for Facebook to develop a device that has the hardware, and operating system that will run smoothly with the sites social functionality. Research In Motion (RIM) – the producer of the “CrackBerry” is a logical acquisition for Facebook. Or is it? RIM is at a nine year low, however it still has a large consumer base. It is still widely used in the corporate world, because of its email security, sleek look, arguably the easiest keyboard to use, and not to mention, the wealthiest people in the world. Is RIM a good buy for Facebook at this point? Should Facebook wait for the floundering company’s stock to drop even lower, or does it risk another company furtively buying the company. Will RIM continue to flounder, or will it reposition itself and adapt (most likely not)? I think Facebook would be smart to buy it while the stock is at $10.73. Let me know your thoughts. Love feedback!
Apple and Facebook: “Big Brother”?
About eight years ago when I bought my first iPod I inserted it into my USB port and iTunes ‘magically’ popped up. Immediately I was inundated with questions and forced to create a username (Apple ID). Until this very day I still have that same Apple ID. Therefore, once I created my Apple ID, the company, in a sense, became, “Big Brother” (exactly the type of ‘force’ they were vowing to defeat when they released the 1984 Macintosh Commercial). The company can now track all of my purchases, tastes, dislikes, etc. This type of personal information has obvious benefits for the company which has recently become the wealthiest company with a market cap close to 530 billion dollars. This is over 130 million dollars more than second on the list, Exxon Mobile. It’s a bit disconcerting that an entity can keep such close taps on its consumers, and therefore exploit them. I feel like we are back in the days of the Soviet Union. I picture Stalin’s giant oil based painting of himself, staring down at the entire country. Maybe Apple won’t send me to the Gulag, but they certainly have superior knowledge of my life than most of my acquaintances and even some close friends. And Facebook?…Facebook?! Are you kidding me? Facebook makes Apple look incompetent when it comes to knowledge of its user base. I’m surprised Facebook hasn’t sent me a speeding ticket in the mail! No, but seriously, Facebook knows far too much about me, my hobbies, my interests and other things. Things that I wouldn’t want my mother to find out about, or even the law for that matter. Not only does the social giant know everything about me, it exploits that knowledge to the nth degree. The right side of my homepage is like an enormous billboard telling me I should drink Amstel, go back to Graduate school and donate sperm to Yale Hospital for a quick buck. We’re all slaves to these two giant corporations who cater to interests and control us like puppets. Why don’t you just call me Geppetto, Pinocchio whatever it’s all the same to me. Let me know your thoughts. Thanks.
-D. Spinelli
Facebook’s Inevitable Demise vs. Twitters Mere Invincibility (#StevenJohnson)
The two most popular social networking sites at the moment coexist in complete harmony. This is because they work in completely different ways and users implement them for completely different functions. While Facebook is rapidly approaching one billion (yes I said it, one BILLION) users, one must address the question of where the company is headed. With the recent drop in Facebook’s stock, it is more apparent than ever that the company is going to need to innovate in order to not fall into the abyss like other internet giants have done in the past i.e. AOL, MySpace. Facebook is no longer simple and easy to maneuver on; instead the user is inundated with newsfeeds and BS that you couldn’t care less about (does anyone really use the lists feature??). Sure it’s cool for college kids and younger people, however it does not meet the demands of the older more mature community. SImply put, Facebook is a liability for young adults and others in professional fields. Facebook lacks a coherent and comprehensive profit model as people shift away from browsers and move towards mobile and tablets. Facebook needs to adapt in a huge way if it is to avoid its inevitable demise. Too big to fail: I think not. In fact, I think exactly the opposite.
Now let’s shift to Twitter. Twitter will never die. It’s simple, easy, uncluttered and does not have a revenue model based upon advertising. Simplicity is the key recipe to gaining users and retaining those that they already have. Facebook’s ever increasing complications and confusing influxes add little to the overall utility of the site, while turning users off. If you really needed to talk to someone there are so many alternatives. I don’t know, maybe the phone? Skype? Facebook will fade off, while twitter will only grow its user base, because it stuck to its original model, and never deviated. Facebook is trying to do too much, while twitter continues to stick with its bread and butter (a phenomenal product). And in a world where everyone is trying to get into the app game, a social marketing like platform will prove to be a much more valuable tool than Facebook.
Comments welcome, and do the poll below on which Zynga game was the biggest fad. Also, remember to tune in tomorrow for the weekly ‘Rantarella Sunday Special’. #HappyBlogging!!
Weekly Friday Poll
After the Facebook IPO, Zuckerberg will own 18% of the shares, but control 57% of the votes.
From CNN Money Don’t like how Facebook is run? Who cares? You don’t have a vote. Facebook has two classes of stock. The ones the company is selling the public only get one vote each on matters such as who should be on the company’s board of directors, executive pay packages and company bylaws. The ones Zuckerberg is keeping for himself and his early investors get 10 votes. The result: After the IPO, Zuckerberg will own 18% of the shares, but control 57% of the votes.
OptiLaunch 