When I received a note from my 2nd daughter asking me to delete all photos of her children from Facebook of course I agreed.
there have been some really disturbing cases on FB recently of people taking other peoples photos of children and posting them on pages...
She asked if I would be asking the same of others in regard to my newest daughter (aged 2 1/2), and I replied "based on what I know at this time - no".
Here are three reasons that, based on what I know at this time, I won't be asking anyone to delete photos of my daughter, nor restricting who can see them. I'll start with the least contentious and "work up":
Firstly, each day 250 million photos are loaded to Facebook, and it is estimated that there are currently more than 250 billion undeleted photos in the system. Therefore, if you have 1000 of your own photos in Facebook then a person will only have a 1/250000000th chance of finding your photos. Of course we don't know how many of the photos are made "Public" but it's still likely that even photo trolls will have a very low chance of ever coming across your own public photos.
The odds rise as your photos are shared, and of course as your Friends add photos of your children and they are shared. I think that it's logical to say that if all photos are shared equally then the odds of being found by a troll remain the same as if no "Public" photos were shared, in any case it's still a very remote chance. You can't cotrol your Friends but if you want to reduce the odds even more then just make your photos viewable only by Friends. I'm leaving mine Public for the time being.
Secondly, I enjoy sharing my photos of my daughter and seeing others enjoy them. I'm not ready to surrender that enjoyment to the photo trolls and have my actions dictated by them. The risks, as I perceive them, don't outweigh the enjoyment.
Thirdly, the most contentious reason. Facebook has generated a whole industry of journalists and many others who specialise in "Facebook Fear" stories (here's one from 2007).There's an associated set of people who flog Facebook pyscho-babble to the TV morning shows to feed their programming formula of fear, fashion, fads, fat, froth and cheap sympathy - for example Channel 7 (Australia) a perfect customer. The participants get their 15 minutes of fame, and for some it becomes addictive.
How is this relevant to my decision? Because it means that stories like the child troll story are going to emerge ad-infinitum. And certainly worse. Nothing is ever going to get better for Facebook because the "Facebook fear" industry has buyers. So if these stories worry you then for you things are only going to get worse. You might be best to quit Facebook now to avoid unnecessary worry.
For me, unless there is a totally reprehensible breach of faith by Facebook or a similarly reprehensible act of hacking of the information which I have in Facebook, then I will continue to use it in an open and public way. Facebook is what it is, and the Facebook Fear industry is what it is with its own agenda, and you have to weigh up the balance for yourself.
At this time, I don't intend to change anything about the way I use Facebook.
I was surprised today to see relatively little in the tweetstream in Australia about Facebook's achievement in reaching 1 billion users. I had to search to find comments as they weren't streaming through, and then I also discovered that about half the comments were sceptical or negative, which surprised me.
It's a massive achievement, with big implications for business and enterprise IT. Here are 5 - off the top of my head. They are not very well researched - forgive me - but at least I'm putting out thought-starters about the implications of Facebook's achievement.
1. The power of the smartest combination of technology, technologists, business strategy and execution
It demonstrates how dramatically the smart choice of technology and business models can decimate the competition. We know the story but it's worth repeating that Myspace was bought for $580m in 2005 and reached a peak of about 100m unique visits a month in 2008 and at those times Facebook was deemed to be an also-ran. Facebook's architectural platform strategy together with its computer science and computer engineering prowess a la Google and its incredible ability to execute rocketed it past the competition while at the same time running on a relative shoestring.
And furthermore Facebook has made much of its secret sauce public, through contributing to open source projects and the establishment of its own Open Compute project. That's partly because of its mission, and mostly because it knows that the knowledge alone isn't precious, it's the ability to execute.
Which brings me to my next point, how Facebook has revolutionised the economics of computing.
2. Computing Economics
Facebook's total cost of revenue is about $1b. A large chunk of that goes to running IT infrastructure including "data center operational expenses include facility and server depreciation, equipment rent expenses, energy and bandwidth costs, support and maintenance costs and staff salaries, benefits and share-based compensation".
In Australia the big banks, big telcos, and some other large organisations spend in excess of $1b per annum each on IT to serve a minute fraction of the user base of Facebook.
Can we even calculate how small that fraction is? Let me see, let's say 25m/1,000m = 2.5% right? Now even if you throw in all the reasons that "we're different" and double that 2.5% to 5% then we're seeing 20 times less value for money in Enterprise computing than Facebook can achieve day-in and day-out.
We’ve always been small in terms of number of employees. We have this stat that we throw out all the time here: There is on the order of 1,000 engineers and now on the order of a billion users, so each engineer is responsible for a million users, says Zuckerberg.
In fact, Facebook has reinvented the economics of data centres and computing. Which brings me to my next point - reliability.
3. Facebook's reliability across 1b users is astounding
Australia's major banks all have very public problems in keeping their basic ATM & EFTPOS networks running "Angry customers slam Commonwealth Bank meltdown". In response some have committed huge sums - $300m, $400m - to remediating their systems. The end result for the customer is no difference in anything except that the service will stay up as promised. On the other hand Facebook manages to stay up to high levels of availability and runs all this across public infrastructure - not dedicated expensive networks.
Once again, I am sure that there are all sorts of nuances, all sorts of reasons why "we're different" we're more complicated" etc etc but for all intents and purposes Facebook stays up globally for 1 billion customers while very expensive dedicated enterprise systems in a single country serving a minute fraction of users don't stay up.
If these enterprises knew what the Facebook engineers know than they'd be equipped to deliver a lot better value for money. And furthermore Facebook never intentionally goes off the air for system upgrades, which brings me to my next point.
4. Very clever zero-downtime system upgrades
Facebook has developed a remarkable 100% uptime service while at the same time constantly experimenting, innovating, bug-fixing, updating and upgrading their software. This hasn't fallen out of the sky in to their lap. They've invented most of it, building on the experience of some others like Google. Facebook's proven processes of gradual releases and dark launches should be the envy of large-scale enterprise IT. Their A/B testing processes are phenomenal and they now have the amazing ability to A/B test on just 1% of their active user base and gain feedback from 10 million users!
In contrast, to my knowledge all the banks in Australia are still taking their systems off the air at least every week for system upgrades. And remember, these outages are just repairs, not the continuous raft of new features and substantive user service upgrades managed by Facebook with zero downtime.
5. The value of a platform
The essential reason that Facebook crushed MySpace was that Facebook build a platform while MySpace tried to build a closed community system. Facebook's approach is conceptually the same as building a mobile ecosystem of content and apps, as invented and launched by NTT DoCoMo in 1999 and as copied by Apple 7 years later. This is the essence of why cloud computing is so important. Cloud is only trivially about the dial-up of infrastructure and just outsourcing iron. Rather, it's fundamentally about the ability of platforms to interact and mash-up through defined application and data protocols e.g. APIs and the Open Graph.
It's an old story, but a poorly learnt one. In 1999 DoCoMo when set out to make its i-Mode service the most successful internet and app store-enabled mobile system in the world (in which it easily succeeded) it deliberately aimed to make the content providers and app developers as successful as possible. That's why it gave them 90% of the revenue, and why many listed on the Tokyo Stock Exchange and made thousands of millionaire entrepreneurs. Facebook as a platform has spun-off similar success stories.
With a "flick of a switch" Facebook could become the biggest of many things - the biggest virtual currency provider, the biggest bank, the biggest postcard generator, the biggest flowershop, the biggest video streaming company, the biggest news company, the biggest green electricity retailer etc etc.
That's the power of building platforms and not applications. Is it relevant to enterprises? Well I think if Facebook decided to become the world's biggest bank, or just enter a few prime markets as a banker, then we'd have an answer wouldn't we? And then it would be too late.
Summary
Well done Facebook. What a lesson for enterprise IT there is in the taming of complexity, the agility, the reliability, and the power of the platform. It's a combination of technological mastery and business strategy and execution ability and agility which the world of business has not seen before.
And I didn't even touch on Facebook's data mining and personalization and their ability to do data analytics at a huge scale to connect everyone and to build the map of who and what 1 billion people know. WITH FACEBOOK YOU AIN'T SEEN NOTHING YET!!
Counterview? For a "counter view" of why all this isn't going to shake up large Enterprise IT quickly it's worth reading this The Enterprise: I’m Not Sexy And I Know It
I've been keenly awaiting the new Facebook iPad app. It's OK. There's a quick and reasonable summary at LifeHacker.
But I'm stuck on one thing. I can't figure how to comment on posts!
See the screen shot to the right and also the video.
The Enter/Return doesn't work and there is no other way that I can see to enter the comment.
Who can help?
As LifeHacker says: "While not a revolutionary app by any means, if you love (or even just like) Facebook and have an iPad it's pretty much an obligatory download".
IBM and Facebook are not really fighting each other, just looking at the world from opposite ends of a telescope.
Consider, IBM has to make big inroads into the cloud computing world as a commercial necessity - to sell lots of servers (hardware) and lots of layers of management applications (software). It's a hardware, software and services business, right?
Facebook operates one of the world's most massive web-systems, far bigger than any bank and far different from any bank, which in fact are not web-systems but just very traditional datacentres and networks. Facebook's front is as social platform, but one of its key competencies is massive web-systems operations. Tim o'Reilly said Operations is the new secret sauce, and Facebook is a master operator - just look at the travails of Twitter or Tumblr, both notorious for their multiple system failures.
So perhaps Facebook and IBM have some common business competencies. Both know a huge fundamental amount about hardware, servers, networks, configurations and operations - on a very big scale. Both have some of the best brains in the industry.
But how they see the cloud world is remarkably different - they are laying their bets on difference races. For example IBM just had a major cloud announcement - IBM Unveils Cloud-Computing Initiative Aimed At Large Companies. This actually means "companies with very large computing requirements" and in this context Facebook is a very large company.
The gist of the IBM announcement is that "IBM is attempting to differentiate itself from some of the main players who have already made big bets on the cloud. Competitors such as Amazon's Web Services, Microsoft and Google". That's a good aim and given its assets IBM should be able to do that.
The IBM SmartCloud "will enable clients to use a Web-based interface to install applications and configure databases on a platform provided by the company". That notion centres on configuring and managing servers as the key unit.
On the other hand Facebook has just announced its Open Compute Project, which makes public and gives away all of it's design and construction plans and details for its new data centre - all the building works, the aircon, the electrical wiring etc - and all the server architecture and design. Facebook designed their own "vanity free" servers, in the same vein as Google using commodity servers. They don't need brands, fancy face plates and video cards in their servers. For its efforts, Facebook's new data centre uses 38% less energy to do the same work as it's existing facilities, while costing 24% less. For example, the data centre uses ethernet-powered LED lighting and passive cooling infrastructure to reduce energy spent on running the facility.
But more, Facebook don't see the server as the object of their attention. Facebook really sees a server as just another lightbulb. And the amount of attention they give to managing a flashed-out server is just the length of a flash. Comparatively, the attention needed in the "old" server-centric world is equivalent to that needed to re-start a blast furnace.
Complex management interfaces, architected upwards from a server-centric model, can't manage what Facebook needs. So they've architected it themselves from the top down, while at the same time redesigning hardware from the bottom-up.
IBM's not doing anything stupid, they're just doing what the rest of the industry is doing. The point is that Facebook isn't perceived as a technology company, far from it. It's often not perceived as an innovative company - when they do innovative things the social media is repleat with condemnation and those stating "that was obvious any fool could have done it". Facebook is not perceived as an expert in data centre design and rarely as an operator of massive web-scale systems that eclipse the complexity of the banks and airlines.
But Facebook is all those things. It's extremely technology-astute, it's innovative, it's ground-breaking, it's astoundingly connected in web-services and data-interfaced world (think the super-strong network effects of its social graph, and the way it has made itself core infrastructure e.g. Facebook Connectthroughout the web), and it has access to all the capital it needs to do anything.
And it's Open Compute Project may just unleash a whole wave of creativity which will dramatically change the way massive cloud computing is implemented, and for sure will encourage many start-ups to do things the Facebook way as versus the "industry" a la IBM way.
Should we expect it, as the norm, that companies with web-systems like Facebook could not use what IBM offers for cloud computing? This is kind of a high level statement, but true. If they did use the industry-commercial offers then this would kill Facebook, or Google, same story. Facebook and Google aren't building their own systems from the ground up because they really want to, but it's because they know they have to, for economic and performance reasons, because they understand fundamentally what is needed, and they can.
The cloud is going where the likes of Facebook and Google (and Amazon and Rackspace) are taking it. Not where the IT industry might hope it might be based on their current inventory and skill set.
The cloud shift is accelerating. It's not hype, it's not only remodelling business and business opportunities but also the whole IT industry and it's ecosystem, and it hasn't even started yet!
What do you think are the implications of Facebooks own-build of cloud computing?
What do you think is the ultimate potential of the Open Compute Project - just PR or a shift in industry power?
It had to happen. When you go to Hearsay Corporation they proclaim "This is not our website" - and direct you to social media, namely Facebook as their "site".
Learn about us on Facebook
Meet the Team on Linkedin
Follow us on Twitter
It wasn't so long ago that I was part of an "animated" discussion on Customer Think about the relative role of websites and Facebook for small business.
I started at one extreme that they should focus 90% of the energy on Facebook and over the thrust of responses settled roughly in the middle. Well at least I settled on the idea that it's "horses for courses".
It's hard to beat the idea that if a business nuts out its goals and brand value and promise then it will come up with the best solution - whichever part of the digital engagement spectrum that should be.
Hearsay have arrived at one end of that spectrum.
People might jump to conclusions and say the obvious conversation killers:
"Oh yes that's an obvious choice for them because they are a "Facebook" type of business", or similar phrases.
But "not so fast Martha" - they describe their business as "Hearsay Social is the first social media platform for businesses with many local branches or reps."
And conclude "Software is only part of the solution. We'll see you through strategy, implementation, and launch, all the way to celebrating your social media success".
AH? Say that again, it sounds like a very "traditional" media consulting company - just with a new exciting product. From that point of view, to me at least, it's not at all "obvious" that they should have decided to not have a website and to direct everyone to Facebook as their corporate site.
It's that decision which marks a milestone. The choice of website / Facebook page isn't "obvious", not a "natural selection", it's a specific and deliberate strategic choice.
That's an exciting new development, and will tip the balance towards more businesses thinking more seriously about the degree of emphasis to give to Facebook versus their "traditional" website.
It's risky, their business is very much dependent on Facebook's goodwill, and as some others have found out that can be capricious at times, and with no recourse or appeal. One of Hearsay's founders is Clara Shih author of The Facebook Era. Perhaps she has better Facebook connections then most, but in any case she's eating her own dogfood.
What do you think of this decision - obvious or strategic?
Do you think it will shift the balance a little to the Facebook side?
Whether you're playing FarmVille, FishVille, or PetVille, you probably use Facebook Credits - the virtual currency launched June 2010 (but the program as a whole is still in beta). Facebook last Thursday announced it is expanding this program to include more payment options and access for more developers. And as the number of services offered on the Facebook platform grows, this means growth for the Credits business also.
There is more to Facebook Credits than meets the eye, and here are 5 things you should know to help explain their importance:
The objective is to build a Universal Virtual Currency System;
The objective is to build a Universal Virtual Currency System;
The objective is to build a Universal Virtual Currency System;
The objective is to build a Universal Virtual Currency System;
The objective is to build a Universal Virtual Currency System.
Just kidding! But only just, that's an amazing ambition which I'll write about in another post. Here are five things:
The objective is to build a Universal Virtual Currency System;
Users can now buy premium items and virtual goods in within apps and games via Facebook Credits paid for with prepaid store cards and gift cards;
The PlaySpan deal, using it's UltimatePay global payment processing service, allows Facebook Credits to use popular regional methods like prepaid cards.
This is a move which will take the whole micropayment movementmainstream, and global.
Facebook will rapidly dominate the virtual economy, potentially ramping up to 500-times Second Life's virtual economy in a very short time.
It's a transitional moment for the virtual economy and also micropayment systems.
Universal Virtual Currency System
The OBJECTIVE is to build a Universal Virtual Currency System, which is more portable than any game or publisher-specific system, and acccording to a report from Venturebeat, Facebook Credits' product marketing manager Deborah Liu used the Euro as the physical analogy!
That's an astounding ambition, since so far all other efforts - like those built around micropayment systems - have fizzled out or remained totally regional or not achieved any significant economic penetration. Since 70% of Facebook's members are outside of the US then the Facebook Credits system was born global and for that and other reasons this objective is feasible. It's now a matter of how it can be achieved and sustained.
Kiss goodbye to the Big Mac Index and welcome in the Facebook Index - how much Facebook Credits cost in each currency.
Buy with pre-paid store and gift cards
Up to now Credits could only be bought via popular credit cards, PayPal and mobile phone and many game developers had already set up virtual currency alternatives before Credits were available to them. Users can now buy premium items and virtual goods in within apps and games via Facebook Credits paid for with prepaid store cards and gift cards.
That's very mainstream for a virtual economy, as mainstream as a Visa gift card. Facebook will also benefit from people failing to redeem their purchased cards or leaving unredeemed value on the cards, which can run as high as 15% of cards and/or value. Look out for the FaceCard as a stored value card.
"Our goal with Facebook Credits is to give people that use Facebook an easy, convenient, and trusted way to buy premium items in games and applications, while creating unique opportunities for developers to build successful, sustainable business," George Lee, a product manager for Facebook Credits, wrote in a blog post.
Playspan
The PlaySpan deal, using it's UltimatePay global payment processing service, allows Facebook Credits to use popular regional methods like prepaid cards (e.g. Europe's Wallie-card, Taiwan's Gash card) and other options (e.g. bank transfers in Germany, Brazil’s Boleto Bancario), along with traditional systems like PayPal and credit cards.
PlaySpan is possibly more important than first meets the eye. It's not just a simple extension of reach. It is a crucial part of meeting Facebook's global ambitions for Credit as a currency. PlaySpan's offer is a "Monetization as a Service" (MaaS) offer which brings cost-savings, scale, and flexibility to game developers in which they would otherwise have to invest (as they have up to now for their customized credit systems, see above). PlaySpan's MaaS platform cuts developers costs, and provides better control which at least acts as a partial offset to the 30% fee on Credits which Facebook takes. (PlaySpan was founded in May 1, 2006 and has had funding of $46.3m to now.)
Micropayment movement mainstream
I think that Facebook Credit signals the transition of the chaos of the micropayment movement into a mainstream, global force. The start of a significant shift. (And part of this is due to the "Cloud Shift", which I won't go into here but is where the real cloud comes into play in business transformation.)
It's fair to note that previous brave forecasts about the impending success of micropayment systems have all had to have been erased from their author's Linkedin Profiles.
For example, Jakob Nielsen, in an essay The Case for Micropayments wrote: "I predict that most sites that are not financed through traditional product sales will move to micropayments in less than two years," and Nicholas Negroponte made an even shorter-term prediction: "You're going to see within the next year an extraordinary movement on the Web of systems for micropayment ... ." He went on to predict micropayment revenues in the tens or hundreds of billions of dollars.
Alas for micropayments, both of those predictions were made in 1998!
None-the-less I say look out now for rapid and significant new innovation, and a whole raft of legal and tax issues which will make the law run to catch up with reality, yet again.
PayPal has also added to the momentum with it's recent announcement of an enhanced micropayments product (since their current one hasn't taken off). And imagine when Facebook members can transfer funds to each and cash them out! The impact on banks and credit cards is likely to be significant. Look out for FaceBank !!
Issue: if Facebook is in control of the funds float, are they a deposit-taking institution and therefore should they be subject to all the banking regulations and controls that govern traditional financial institutions?
Facebook will dominate the virtual economies and micropayments
There are other virtual economies, such as Second Life which reports that it's doing a booming business and its virtual economy is currently the largest in the world. But it and all others will pale rapidly compared to Facebook (Second Life has about 1/500th the membership of Facebook).
In the game community Credits will dominate almost immediately. For example Zynga and Facebook engaged in a five-year-long commitment in May, agreeing that Facebook Credits would be the exclusive form of currency used for all Zynga games hosted on Facebook. Zynga has the largest marketshare of the three major U.S. competitors with 221 million users.
It's in the non-game - the other virtual and micropayment segments - where the astounding potential lies. In this case Facebook becomes the aggregator of purchases and settles with its suppliers, and of course it will have to drop its fees from 30% to let's say 3% + $0.10 for these non-game type micropayment transactions especially for those less than say $1.
Facebook Credit could feasibly take control of small person-to-person transactions with a firm hand. It won't wipe out the many successful mobile micropayment systems like those which operate in the Philippines, Bangladesh and parts of Africa. But it will open up new regions and complement those systems in areas/geographies/demographics where smart-phones have a critical mass of penetration.
It comes down to this. What Facebook and PaySpan now have is a collaborative micropayment system - a hybrid micropayment system that can interface all existing micropayment systems. While PayPal has had a micropayments system ,it hasn't reached any critical mass and it doesn't appear to be linked to any virtual currencies. It is also limited in its means of payments. Facebook plus PaySpan eclipse this.
And the fabulous thing is that it does not belong to the banks or the telephone carriers.
Facebook will become the dominant point at which payments are coupled with content deliveryand it already has a relationship with 500m members. That's kind of a revolution, because almost universally it was predicted that micropayments would not take off without the cooperation (read control) of the banks, or telcos, or ISPs for example.
That's no small market. VISA estimates that up to 25% of total consumer transactions are for $25 or less. That figure of $25 is bigger than the Wikipedia definition of a micropayment up to $10 but Facebook is not restricted to micropayments - solving micropayments is just the first step.
A potential Facebook e-card would rapidly dwarf the 15million or so Octopus ecards currently issued, which is often used as the benchmark for the "most widely used stored value product". (That's not correct of course, mobile phones with built-in contactless stored value cards far exceed that number in each of Japan and Korea.)
Is Facebook being too greedy?
Let's look at two aspects of "greed" in relation to Facebook Credits. Firstly, the global ambition to become the universal virtual currency. From my point of view, no it's not being too greedy its simply being ambitious and it is what others like the credit card issuers and banks would do if they could.
In general the banks would never be able to do it, for one reason because as has famously been said "no one wants to be friends with their bank on Facebook". That says everything about the view of the relationship people have with banks.
On the other hand it's inherent that if you are on Facebook then you want to be there, and the stats show that you spend a lot of time there. There's also another reason - 99% of the world's banks don't understand cloud computing. They understand so-called "private cloud", which is essentially a delusion, and that delusion keeps them from understanding how Facebook and PaySpan have hung them out to dry - because Facebook and PaySpan do understand the real cloud.
So while the banks have all been busy awarding themselves innovation prizes and swanning about in self-admiration of the complexity of their IT operations silly little Facebook has jumped the hurdles that need to be jumped on the road to a universal virtual currency. These aren't small things - security, privacy, logistics and the Cloud Shift. To be fair I guess that the banks do provide an efficient and effective processing system with a reasonable set of commercial and legal safeguards for all parties, and the virtual currency journey has a long way to go yet in that regard.
That said, we could guarantee that a companies like Visa and Mastercard have repeatedly examined the feasibility of how to massively expand their own virtual currency and micropayment efforts and ambitions, but haven't yet found the platform to achieve and sustain it. (See Visa recently acquiring Cybersource to tap into mobile payments, and MasterCard with its Open Platform and acquiring DataCash.)
The other "greed" question is with regard to fees. Facebook takes a 30% cut of all Credit transactions. Contrast this to Second Life who say that they charge an "exchange rate" on the virtual currency that is used for in-game commerce but they do not charge a commission on in-game commerce.
However the 30% fee is the same as Apple charges for their App Store, the same as Nokia's Ovi store, and less than the 40% or more that the telcos rip from developers for their app stores. So it's in-line with the industry for apps/games.
Although some game publishers reacted negatively to the size of the fee it is reported that those who have implemented Credits have seen a big lift in game revenues. Deborah Liu has said that at the moment only about 1% to 3% of users spend money on free-to-play games and is expecting that Facebook Credits will increase that range up to 8% to 20%. Which means plenty of new income for game companies, even after the 30% fee.
Conclusion
Combined with the new Bing search deal, it's clear that Facebook has designs on specific "Cloud Shift" business-transformational strategies for the future. Think of their Social Graph, how that has spread the Like button like wildfire, and the other widgets. Then add in a "Facebook Payment" button with access the to same networks and Social Graph - it's huge! Just think more, of the millions of people who use Facebook as an online photo repository, Facebook Credits is a huge hint that Facebook has some very expansionist plans for its future.
"..increasingly detached from material embodiments, capital and money alike change through history, moving by stages from totally tangible to symbolic and ultimately today to its 'supersymbolic' form. This vast sequence of transformations is accompanied by a deep shift of belief, almost a religious conversion – from a trust in permanent, tangible things like gold and paper to a belief that even the most intangible, ephemeral electronic blips can be swapped for goods or services."
Speaking about the change from using animal skins, salt, land and goods as "currency" to the beginning of the use paper money, Toffler notes that "unless a person believed that others would accept paper, and deliver goods for it, it had no value at all". Think of diamonds, which are intrinsically worthless stones whose popularity and value are a recent creation, the result of a concerted marketing efffort by a monopolist cartel which created a belief that diamonds "are a girl's best friend".
In many ways, the advent of micropayment and virtual currency systems clearly reflect this progression in the belief system, which will underwrite the potential shift in commerce heralded by Facebook Credits. Facebook could hardly be as evil and artificial as the diamond trade, and they no doubt have the same intellect, vision, drive and propensity to act as De Beers, and therefore I think that they have a very good chance of shifting the belief system further, in line with Toffler's model.
Do you think that Facebook Credits has this same kind of significance?
Will it become "the" Universal Virtual Currency, if not why not?
How can micropayment systems best benefit from working with Facebook Credits?
ASB Bank's Facebranch, said to be "the first 'Virtual Branch' application of its kind to be launched by a bank on Facebook", isn't especially interesting to me for its Facebook functionality but rather for its fronting up to the usual corporate fears of social media.
The three most common themes among business executives hesitant about social media are still:
How do we "protect" the brand?
What control do we have over people saying bad things about us?
How do we control what our staff can say?
Bad Banks recently nominated ASB Bank for the 2009 Roger Award, given annually to the "Worst Transnational Corporation Operating in Aotearoa/New Zealand". Bad Banks also has ASB prominent on their Bad Banks Facebook Page. So in the face of the flaming in social media and on the streetagainst the ASB Bank you'd think that their executives would be reluctant to open up for more.
But not so, and good on them.
Even more surprising since they are wholly owned by the Commonwealth Bank, one of the big four Australian bank oligopolists (Commbank, ANZ, NAB and Westpac) where service innovation is an oxymoron - in the main comprising waves of PR campaigns masquerading as consumer service and information. (Through I have to admit the ANZ's Barbara the Banker campaign and ASB's Goldstein are cute PR.)
There's a good review of ASB's Facebranch on Christophe Langlois' Visible Banking blog, where he calls labels it Facebook Branch 1.0 because of its shortcomings, while giving it couple of stars for effort.
I'd think ASB is well aware of the basic state of the current initiative, but it still serves them well, and it opens a channel and a challenge for them to now get to more fully understand. There's quite a lot of design thought gone into this effort and it all hangs together quite well, including the avatars.
Let's face it, if more businesses took this first step of getting Facebook integrated into their customer service in a well thought through way, as ASB has done (they're running a dedicated team of 8 staff in FaceBranch) then it would a huge step forward.
"We believe this is the first 'Virtual Branch' application of its kind to be launched by a bank on Facebook, anywhere in the world," says Anna Curzon, ASB’s general manager of internet banking. "It's really exciting for us to be able to run this application on Facebook and we're working closely with our customers to understand more about what they want from us in social media."
Just as a quick comparison to other banks and their social media efforts, Citi and 1st Mariner and USAA® (USAA Federal Savings Bank) and Mechanics Bank are among those recently quoted as having advanced digital and social media efforts here are some factoids:
ASB Bank's FaceBranch has nearly 5,000 fans now, a few weeks after its launch;
Citi, for all its marketing might and global presence has 3,500 fans of its Facebook Page, which is just a Wall and with only 2 entries since March 2009;
1st Mariner, "proudly located in Baltimore" home of The Wire, has a much more active Facebook Page than Citi and provides more content - such as branch locations complete with FourSquare links (neat!) and videos from the managers - but has only managed to attract about 1100 fans;
The USAA Federal Savings Bank prides itself on being innovative, and according to it's Facebook Page was just named the was named Best in Class for mobile banking "for the second year in a row". There is no doubt that their FB page is far more advanced than ASB. Its My USAA tab/app is the whole box and dice of Internet banking integrated into Facebook. There's lots of activity, with the exception of Discussions which seem to have fallen through the cracks, and there are over 100,000 fans of this bank! Impressive. But in any case let's take ASB's FaceBranch claim at face value, there is room for everyone in these innovations.
Mechanics Bank is a little off the Facebook scene, as I found them hard to find and that they have not even taken advantage of their potential short name facebook.com/mechbank (as in www.mechbank.com) but they do have a Facebook Page with 28 fans. It has 3 posts for this February and none since. I would think that a business like Mechanics Bank would really be able to capitalize on their community connections and make their FB Page a real source of connection and business. They have plenty of content on their website.
As far as other Australia NZ banks go, just as a quick comparison, I couldn't find any Facebook Page for ASB's owner the Commonwealth Bank; Westpac has 74 fans; the ANZ doesn't appear to have a Page although their "Barbara the Banker" PR campaign has a user page with 166 fans; the NAB doesn't appear to have a Page but it's wholly-owned U-Bank has nearly 5,500 fans - U-Bank has a strong social media presence since it is an Internet-only bank. In New Zealand none of the ANZ National Bank, the Westpac NZ or the Bank of New Zealand appear to have any official Facebook activity, at least none that appeared in my searches.
So the ASB Bank stacks up very well considering their FaceBranch is only a few weeks old.
Hat's off to ASB, I like the effort and it's part of a shift which is important for business.
Rather than inventing a whole lot of "Facebook Branch 2.0" ASB is going to listen to their customers, from the perfect vantage point of their Facebook Branch 1.0, and develop what customer's feel is most useful.
To me, businesses are severely underestimating the power of Facebook as an adjunct to their digital engagement, especially services businesses, and I can only say again that if they got their minds around the step that ASB has taken then they'd see potential for themselves. I'm especially interested in how small and medium businesses can use Facebook for eCommerce and migrate that aspect from their current websites.
Which bank have you seen with the best Facebook presence?
What is the best use of Facebook for SMB and eCommerce/Customer Service?
It's astounding that when Starbucks asked on Facebook "How long is your drink order?" they had nearly 2,000 answers per hour for the first 5 hours, and about the same number of "Likes". It only represents about 0.1% of their amazing fan base of 12 million on Facebook, but even so what a instant and huge resource for research.
You'd have to say (as we have been saying for a while) that the days of most "market research" groups are severely numbered. It's a bit like the disruptive shift of cloud into the computing landscape, social media is a disruptive shift for market research. It has to be this way - bad news for all but the most agile MR firms - because while Starbucks has a relationship with its customers through social media any marketing agency can only have a transaction.
I don't know what Starbucks would make out of the answers, perhaps some ideas of improving service or product selection. Or perhaps they just did it for fun to engage with their fan base.
I'm a bit dull, I just order a "latte", others ordered " double chocolate chip mocha frappucino, double blended.. EXTRA chocolate!","A grande, soy, decaf, sugar-free vanilla, no-foam latte", "venti caramel frap with mocha and whip cream and extra extra caramel on top and on the bottom and all over", "White chocolate carmel frappachino extra shot with whip cream"... !!!
While I was skimming the comments a few impressions formed in my mind. The first was people don't go to Starbucks for coffee!! The second, and a powerful image, was that Starbucks is one big diabetes-generating machine relentlessly doling out sugar and calories. And the third, a peripheral one, is that while working in a good coffee shop would be something that I would do if needed, I certainly wouldn't want to work at Starbucks, because of the previous point.
What impressions come to you when you read the comments?
What do you think people go to Starbucks for if it is not the coffee?
Over a really pleasant discussion with Jamie Pappas today I learnt a lot about social media and EMC Corp - one of the corporate leaders and believers in the business benefits of social media.
We covered a lot, and one little snippet that jumped out at me was EMC's very positive attitude towards Facebook. I mean even today if you search on Linkedin I'm sure that you'll find a whole bunch of discussions around not only "why would B2B use social media" but also "Tell me why Facebook would work for business and in particular B2B". If you google those themes you'll be overwhelmed by the results, and I would suggest underwhelmed by the same old last decade hackneyed opinions of the naysayers.
EMC, like Cisco and Intel and Microsoft, are a light-year ahead of the Facebook-for-business-naysayers. In fact Huffington Post's Fortune 100 Companies' Social Media Savvy (STATS) says that 82 of the Fortune 100 tweet on a weekly basis, posting an average of 27 tweets a week. So big business is well out there in social media (including Facebook).
EMC keep a list of all "their" Facebook pages (about 35), meaning their corporate pages, and those set up by staff, and by others. It's not 100% complete, because they have to discover any "non-EMC" pages, and it's not always clear who the administrators of those pages are. It's also not 100% complete because of their open attitude towards their staff starting a page, with a voluntary code of practice.
The 3 Asks
Jamie said that EMC really only have 3 Asks of their staff if they wish to set up a Facebook page:
Check that something doesn't already exist which would suit your purpose;
Share the URL, and the admin details (i.e. let Corp Social Media know);
Keep it active, or close it down.
I was impressed with all these, as it isn't about hard and fast rules, and what you can't do, but about what you can do to exercise your personal responsibility, and what EMC simply asks of you in return.
But I was really most impressed with the last Ask because in that very simple request EMC is getting to the heart of social media and the reason to be there. You need to be alive, communicating, conversing, and maintaining the presence - it's not a one-off exercise. That latter point is also why EMC don't recommend that staff set up a Facebook page for a product spec nor a single event. For that type of "campaign" purpose they can use one of the many socialised Event options within EMC's existing presences e.g. Events in a corporate FB page.
There's also a bit of brand protection, since a dead page can be a turn off to customers, and that's to be avoided.
Keep it Active
So what's it mean - "keep it active"? Again no rules but the EMC suggestion is:
3 to 5 relevant posts a week, excluding raw links to articles, press releases etc
active monitoring
responding
administering - remove anything that shouldn't be there, don't let anything escalate without warning.
If you're not able to tend to these tasks, then it's recommended that you consider shutting it down.
Is that really it?
OK, I hear you ask, is that really it for a company of EMC's size (43,000 employees), reputation, brand value, and shareholder obligations? Anyone can just launch on Facebook?
Well no, of course there is a milieu - an environment or setting. Key is leadership, from all levels about the wealth-generating power of social business, there is desire to have employees engaged and participating in all things "company" and social media is one fabric for this, and there is a desire to be open with customers, despite in some ways still being a conservative company within.
And there is social media training, and a Social Media Club, and a Social Media Advisory Council. And of course there is a social media Policy, which I place last as a necessary but totally insufficient part of embracing social media yet which often dominates management's attention elsewhere.
Are there any downsides to such a liberal open-minded approach. Sure, there is some cleaning up to do from time to time, some duplication, some fails, and some lessons. The lessons are what the Social Media Advisory Council think about, and make any continuous improvements.
While some firms regard the possibility of negative comments as "risks", EMC sees them as opportunities to engage and to learn. As Jamie says, customers will often not tell you something face to face but will put it out in the social media andexpect that it will be discovered. It's an opportunity to be proactive.
Business benefits outweigh the risks
Overall, in EMC's judgement, the business benefits of tapping into to enthusiasm of employees wishing to communicate outweighs the risks of the lightweight "approvals" process for staff wanting to set up on Facebook.
What do you think of EMC's approach?
Would it work in your firm?
Would it work in firms you advise, and why or why not?
It's a question which is still asked everyday - isn't Facebook for friends and consumer brands why would I use it for B2B?
We all know about the big B2C guys, the Starbucks, Pringles Adidas etc, but how about smaller businesses and B2B? The big B2B guys are all over Facebook e.g. Intel, Cisco, IBM, we'll stick to small SMB examples.
Here are 5 SMB B2B Facebook pages:
How about Mid West Laboratories, for "analysis you can trust"? Tied to their blog, a basic but functional one, they take full advantage of a Facebook presence. They are obviously tracking news and keywords, as this is often the topic of a blog post, which in turn is fed through to their Facebook page (that tracking is easy to do using Google Alerts).
Who'd have thought, staid McKinsey's have a Facebook page, and they are dealing exclusively B2B and with the very top C-level! They have a good selection of videos, and the link on their main Facebook profile goes to their Twitter account, not their homepage! I guess McKinsey's isn't really a "small business" however it's more the point about their C-level audience and Facebook which is the surprise.
Finally how about Chinese Lawyer ,Shanghai, "International Lawyer for your business in China!" who has more than 2,500 "fans"!!
Hints: if you are looking for inspiration check out Custom Facebook Pages, they have a great gallery, and the tools, and more at Facebook Designs. And here are 5 Tips for B2B Facebook Pages from Hubspot, and Mari Smith is the ultimate guide for small business on Facebook. Don't forget that integrating your website and Facebook will get the best results, see "Social strategy: Web integration to leverage brand advocacy", and if you are looking for a tool to better manage your time spend in the social media generating leads or following thought leaders check out Xeesm.
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