by Charlene Li

Facebook just announced "Facebook Connect", which they position as the natural evolution of Facebook as an open platform, which started from their initial API in 2006 and expanded with Facebook Platform in May 2007. This is how they describe Facebook Connect:

"Facebook Connect is the next iteration of Facebook Platform that allows users to "connect" their Facebook identity, friends and privacy to any site. This will now enable third party websites to implement and offer even more features of Facebook Platform off of Facebook – similar to features available to third party applications today on Facebook."

Details on the four main feature -- Trusted Authentication, Real Identity, Friends Access, Dynamic Privacy are below in the extended post. Overall, this means that all of the fun stuff that developers are building into apps on Facebook Platform will now be available for third-party developers to build into applications OFF of Facebook.com.

I spoke with Ben Ling at Facebook, and the hypothetical example he used was yelp.com. If I link my Facebook identity to my Yelp identity, I'll be able to port over my profile, my content, my reviews. Also, I'll be able to see if any my Facebook friends are also members of Yelp -- and be able to automatically have our friendships authenticated and visible on Yelp.

This is the beginning of the future I laid out earlier this spring, where social networks will be like air -- everywhere you need and want them to be. Facebook has a distinct advantage in this space, given its vibrant member base AND its relationships with developers who are already creating these social apps. Ben gave me some startling numbers: 24,000 Facebook applications, 350,000 developers on Facebook Platform, and 70 million Facebook users who have installed an app.

So in a few weeks, we can expect to see Facebook leaving the confines of its server, allowing users to take their Facebook experience anywhere they want. Instead of damaging itself and eroding the value proposition, Facebook is extending the reach of its social network through the Web.

With Yahoo! Open announcing and MySpace in the data portability game, it's now a battle not for just users, but a race to see who can open faster -- and more importantly, play well with other sites. Remember Facebook Beacon? That was an innovative program with partner details not very well thought out or implemented. I don't expect Facebook to make the same mistakes and if anything, they are ahead of the game having learned from that painful experience.

I did ask Ben about the timing of the announcement, coming as it does on the heels of MySpace announcing that it was joining the Data Portability Project. He said, "Openness is part of our DNA, We want to be transparent about our intentions, about the type of functionality we will offer to developers. There is a lot of mistaken perception that we are a close community."

So welcome to the race -- and look for a lot of interesting things to happen as the giants in this space - MySpace, Facebook, Yahoo!, Google, Microsoft -- all try to outdo each other in connecting with other sites. I for one am very much looking forward to it -- good bye social silos!

What "dream applications" would like to see developers build in this brave new world of social networks being extended into other sites? And what concerns do you have, especially if you work on a site that could be linked to these social networks? Let me know in the comments below or email them to me at cli at forrester dot com.

by Charlene Li

Yahoo! unveiled Yahoo! Open at O'Reilly's Web 2.0 Expo today. In a nutshell, Yahoo! is doing the following:

1. Rewiring Yahoo!. They are making it possible to create applications that can be shown throughout all of Yahoo!. That means search, mail, front page -- everything.

2. Open Yahoo! to developers like never before. Third party developers will be able to write applications that appear throughout Yahoo!. That's right -- you can write a mashup that integrates Yelp reviews into search results that appear anywhere -- on search results or even the home page.

3. Making Yahoo! more social. Yahoo! has over 10 billion connections lodged inside its various services -- think about all of the relationships expressed in address books, Messenger buddy lists, and most importantly, Yahoo! Mail flow. You'll be able to have your social graph appear throughout Yahoo! as a results (more on what this will look like below).

For me, this is a significant step forward in the next phase of social networks and the social Web. I wrote about this last month in a post about the future of social networks, where social networks will be like air. It makes no sense that your social connections be locked up in a social network -- when I receive a message within Facebook, there's no way to forward to it my work colleagues, friends, and family who are not on Facebook. And that significantly reduces the effectiveness and value of Facebook to me.

Yahoo! is clear that they are NOT creating another social network. Yahoo! CTO Ari Balogh said in his Web 2.0 Expo speech, "This is about making Yahoo! social in every dimension. Social is not a destination -- it's a dimension and it will infuse all aspects of a consumer's experience on the Web."

I couldn't agree more. Yahoo! is the foundation for hundreds of millions of users every month (Ari said that 500 million people worldwide use Yahoo! each month). But the real potential of this is that the social experiences that a person has on Yahoo! will be ported to other sites. In March, Yahoo! announced that it would support OpenSocial, meaning that applications developed for and on Yahoo! will be portable to other OpenSocial sites like Google and MySpace.

The potential here is that what will become portable is more than just the applications, but also the social graph of each Yahoo! member. There are still plenty of details to be worked out, in particular, control over each person's social graph. But in my discussions with Yahoo!, I'm confident that they will take the appropriate measures to ensure that each person has full control over how their activities and relationships are mapped, expressed, and revealed.

Ari didn't discuss specific timing, but I suspect that we'll see parts of Yahoo! Open rolling out over the next few months. I'm especially interested in seeing how Mail integration rolls out, especially the prospect of being able to implicitly map out my relationships. That's because I don't use Yahoo! Mail -- I use Gmail. Will Yahoo! enable me to reach into Gmail with its APIs and map out the relationships? I believe that they will -- after all, it behooves Yahoo! to bring me back into the Yahoo! network, even if I still keep my feet firmly planted in Gmail. 

The question inevitably arises -- is this a "Hail Mary pass" on the part of Yahoo! to fend off Microsoft? I think not. To Yahoo!'s credit, they have been focused -- as much as a company can be under the circumstances -- on executing on a strategy initiative that started last year. Regardless of how the Microsoft/Yahoo! dance turns out, Yahoo! will be setting a precedent for other portals and social networks to follow.

So it will be interesting to see how quickly the other players -- like Google, Microsoft, MySpace, and Facebook -- answer the challenge that Yahoo! has set down. I don't think it's a matter of if, but rather, a question of when.

I'd like to hear your thoughts about what a completely open, "social-ized" Yahoo! means to you. What experiences would you want? What concerns do you have?

by Charlene Li

I'm often asked if Twitter is important or not, and while I'm not a major booster, I fall on the side that it's an idea and technology to watch closely. A conversation with a colleague yesterday sparked me to write this post, which has been rattling around in my brain for a while. It shows how Twitter connects people in new ways previously not possible. 

Twitter is somewhat of a new thing for me -- I'm what is described  as a "binge twitter-er", in that I go for long periods when I don't tweet anything. I'm getting a little better, using Twitter to ask questions or to share a post or link. But I do think it's particularly interesting in that it's a unique communication tool, and I thought I'd illustrate it with this example.

I'm in the midst of a launching the Groundswell book and realized that given all of the upcoming travel, that I would really benefit from a Clear pass, which allows me to skip to the front of the security lanes. I'm lucky in that the airport closest to me, SFO, has a Clear Lanes at pretty much every security area, so I can fly through. I have to say, I am absolutely loving it.

During the sign-up process (which I did back in January), I noticed an area where I can enter a discount code. A little bit of searching turned up that I could get a referral code from someone who already had a Clear pass, and we would both get a free month of service.

But how to find someone? I figured there had to be someone I knew amongst my frequent flyer friends and colleagues who had a pass....but I didn't have the time to send out an email, nor did I want to spam everyone. That's when I decided to Twitter the following:

charleneli   Signing up for flyclear.com. Does anyone have a referral code I can use? I think you'll get 1 month free. FCFS. 04:53 PM January 16, 2008

My friend, Christopher Carfi, saw my tweet and replied with the following:

 ccarfi   @charleneli: i think @anildash uses flyclear. 04:56 PM January 16, 2008 

So still in Twitter, I sent a direct message to Anil Dash at Six Apart asking him about it. Here's his response:

anildash i *love* Clear. My referrer code is *********, and i blogged about it here: http://tinyurl.com/2fhf9r 05:12 PM January 16, 2008 

(Note: Clear members aren't allowed to broadcast/publish their discount numbers, so I removed it from Anil's reply)

Now this is important to note. The time between when I put out my first tweet and Anil's response was 19 minutes. That's pretty fast, especially considering that I most of that delay was me getting around to sending Anil the direct message in the first place.

Imagine what it would have taken for me to track down, email/spam my contacts to hunt down that code. So the benefit to me was a month of Clear's $100 service, or $8.33.

I'd love to hear how Twitter has helped you get something done -- beyond sharing links, ideas, or communicating with people in your network.

And if you're thinking about getting a Clear pass, let me (or Anil) know and we can "make" another $8.33 together!

AOL announced that it would buy social networking site Bebo for $850 million. I have several points of view on what it means, and I've summarized some of the key ones below.

• Future direction of social networks. In many ways, I think this deal represents how social networks will develop in the future. That's because as a stand-alone social network, Bebo had no chance of competing against big boys like MySpace and Facebook. But as an integrated part of the larger AOL content and ad network, it has amazing potential to play a role in how social networks develop. With the $850 million acquisition of social networking site Bebo, AOL is finally showing its hand -- a plan and way to integrate the disparate assets and acquisitions its been quietly building over the past year.

The foundation of my premise is that social networks will be like air, integrated into everything that we do. Let's start with AIM and ICQ, in the case especially for AIM, leading instant messaging platforms. Most social networking sites already have IM-like capabilities built into them, but the reverse isn't true. And yet, the buddy list of services like AIM reflect very well a key part of my social graph -- the people with whom I communicate with in a very intimate, frequent manner.

AIM introduced AIM Pages a few years ago, which was a lightweight approach to having a profile attached to an AIM screenname. It didn't go over well and I agree with Saul Hansell/NYTimes that this could be an opportunity to bring social networking into AIM and AOL in general.

The potential is that Bebo members' social graphs and activities are expressed and connected to instant messaging, and that IM use is reflected in the nature and tenor of the relationships within Bebo, e.g. if I frequently IM someone, then that relationship is very strong and should be reflected in my Bebo experience if that friend is also there. 

• Valuation of social networks. As Stacey Higgenbotham/GigaOM  points out, the $850 million price comes out to about $21.25 for each of Bebo's 40 million members. That's a bargain compared to the $27.62 per user price News Corp paid for MySpace back in July 2005. Excepting Facebook's $15 billion inferred pricing thanks to Microsoft's strategic investment (which puts it at roughly $300/user!), we're starting to see a rough valuation for today's social networks.

Will this start a frenzy of acquisitions in the space? I believe so, but not necessarily at this valuation. That's because there's tremendous downward pressure on valuation because of the unproven business model, namely advertising. We're in the trough right now, because while there's tremendous consumer uptake of social networking sites, marketers still haven't figured out how to tap into all of that energy and enthusiasm.

That's why it took so long for Bebo to find a buyer, and also likely why other sites like LinkedIn, Hi5, and Friendster haven't gone yet. My prediction -- we'll see smaller, niche social networks focused on a specific group like Black Planet (by BET), or interest area like Flixster (by NetFlix) or iLike (by iTunes/Apple) get snatched up by companies interested in those areas. They have a clear, focused way to engage a specific social group or go deep into an area of passion -- both great ways to get the attention of marketers.

• Multiple open platform support. I've always been impressed that Bebo has been able to sit in the middle between the two giants, MySpace and Facebook. It has the entertainment, self-expression aspects of MySpace but also the communication and application features of Facebook. And although Bebo was one of the core members of OpenSocial when it was announced, when it launched its own open applications platform in Dec 2007, it made sure that Facebook applications would also work on it.

This willingness to craft a middle road between these two behemoths had been a necessity as  Bebo is a far smaller player in the space. But going forward, I believe it will be a strategic advantage for AOL. That's because it will make AOL much more willing to open up its own site, services, and platform to anyone who wants to tap into it -- and more importantly, to go out into any social networks that would have it.

AOL has already organized its advertising assets, led by Platform A, into a formidable ad network that can serve any site, not just AOL's network of content sites. Look for AOL to be a part of this "opening up" of social networks, by sheer force of it having millions of users.

What do you think? Does AOL with Bebo have a chance at shaping the integration of social networks into more traditional Web sites and services? Or was this simply an opportunistic acquisition that AOL is not in a position to truly leverage? I'd love to know your thoughts, either in comments or via email at cli at forrester dot com.

by Charlene Li

On Monday, I gave the kick off speech for the Graphing Social Patterns West conference on the topic, “The Future Of Social Networks” (slides are available on SlideShare, summaries available on News.com, ReadWriteWeb, and allfacebook.) Note that this is still ongoing research, so I welcome your comments.

I set my time frame for the long term – five, even ten years out. That’s because unless we know where we want to end up, how could we ever craft a strategy to get there? For inspiration, I thought about my grade-school kids, who in ten years will be in the midst of social network engagement. I believe they (and we) will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to “be social”.

Instead, I believe that in the future, social networks will be like air. They will be anywhere and everywhere we need and want them to be. And also, without that social context in our connected lives, we won’t really feel like we are truly living and alive, just as without sufficient air, we won’t really be able to breathe deeply.

There are four components of what I’m calling this idea of “ubiquitous social networks”: 1) Profiles; 2) Relationships; 3) Activities; and 4) Business models. These aren’t new -- I wrote about the first three in my original report on social networks back in May 2004. But in the context of ubiquitous social networks, they will develop into the following: 1) Universal identities; 2) A single social graph; 3) Social context for activities; and 4) Social influence defining marketing value. For more detail on each of these components, see the extended post (warning: it's really long!).

The ubiquitous social network isn’t going to happen overnight – in fact, it’s going to take five+ years to come to fruition. This is part of the continued evolution of open platforms, starting with walled garden services like Prodigy, Compuserve, and AOL that evolved into the major portal aggregators like Yahoo!, MSN, and AOL. This gave way to the “search era” where Google et. al. made all of the Internet easily accessible. Today’s social networks are a throwback to those early closed platforms, and they will be opened up by new “entrants” into the social space – namely, Yahoo!, Microsoft, Google, and AOL – who will leverage their deep, daily relationships with online audiences.

In the end, there are two essential things that have to present for this all to happen. The first is technology -- ubiquitous Internet access and the servers to enable real-time social graph access. Given the pace of technology development, I'm pretty sure this will happen. The second is much harder -- trust has to be present, between people, between social networks, marketers, and developers. This is what is going take a lot of time, effort, and patience, but the optimist in me thinks that it will come. That's because people will press for it, demanding that sites and applications adhere to a Bill of Rights for users of the Social Web.

So what is a social network, marketer, or developer to do? Here are my recommendations:

• Create linkages between services based on individually-controlled identity federation
• Compete on creating the most compelling social experience, not social graph lock-in
• Develop social applications that have meaning
• Integrate social networks into existing activities
• Design business models that reflect the value created by people’s social network

In the extended post (click on "More" below) is a more detailed explanation of how I see each of the four components of ubiquitous social networks developing.

As I mentioned above, this is ongoing research and I'm far from done. So if you have ideas, comments, criticisms, or examples, let me know via comments below or email at cli at forrester dot com.

by Josh Bernoff

Months ago, I signed up for my.barackobama.com just to check it out. I've been getting emails from the candidate's people regularly, including notices about his appearances in Massachusetts, where I live. Yesterday I got one that started like this:

 

Dear Josh,

Yesterday, supporters all across the country responded to Barack's request by making more than 300,000 calls into crucial March 4th primary states.

We reached our goal of one million calls much faster than expected, so we're setting a new goal: 1,500,000 calls to voters by Tuesday.

Use our online phonebanking tool and start making calls right now:

http://my.barackobama.com/call

There's no easier or more effective way to keep building momentum for this campaign than making calls to likely supporters.

And there's no more important time to get involved than right now.

The primaries in Ohio, Texas, Rhode Island, and Vermont this Tuesday, March 4th, could be decisive for this campaign. Reach out to voters in these states, listen to what's important to them, and share your reasons for supporting Barack.

The online phonebanking tool is easy and fun to use. Here's how it works:

1. Choose a state you'd like to call.
2. Log into My.BarackObama.com and get a list of 20 names that only you will receive. (If you don't have a My.BarackObama account, creating one is fast and easy.)
3. Click on a name and you'll be led through a simple script, question by question.
4. Start making calls.

There's lots of talk in politics about "energizing the base." my.barackobama.com is the base for Barack Obama. I still feel there's a flaw in this social network of Obama supporters -- I've seen no evidence that Obama is listening to anything they say. But terms of taking a base of supporters and turning them into a force to accomplish your goals, this may be the most powerful example there is.

Meanwhile, Hillary Clinton is zooming all over Ohio and Texas, shouting herself hoarse. I know Obama is doing the same, and I know Clinton's people are engaged in plenty of get out the vote activity. But Obama has this asset: thousands and thousands (millions?) of volunteers he's never met, using phone banks he set up.

Some of those phone calls will be "off message" -- but many will also be passionate personal word of mouth. Could this make the difference?

And the question I really want to know. If Obama wins in November (or even if somebody else does), how could this technique be used to improve the work of government?

P.S. This post is about Obama's and Clinton's techniques, not their positions. Please think a moment before trying to post policy-based comments -- this is not the place to try to win people over to your candidate.

by Josh Bernoff

When Kevin Rose and Alex Albrecht invited me to watch their live Diggnation podcast recording in St. Louis (we were both there to connect with some of Anheuser Busch's marketing staff) here's what I imagined: a camera set up in a bar with two guys talking, and patrons walking by and wondering what was up.

Boy was I wrong. Here's what it was really like:

300 rowdy, screaming people crammed into a performance space, cheering, interrupting, and grooving on being in the same room with somebody they admire. Love. Are into. Kevin and Alex got a treatment that wouldn't have seemed unusual for Sacha Baron Cohen or Jennifer Jessica Simpson.

Who are these guys?

Kevin was an on-air personality on TechTV and created Digg, the site where people vote on the news stories they consider most worth reading. The Diggnation podcast is an outgrowth of that site, an on-air review of the stories that matter to Digg members. It's part of a lineup of shows put on by Revision3, run by Kevin's ex-TechTV crony Jim Louderback.

But what it really is, is two guys on a couch, drinking and shooting the bull with the tens of thousands of people they know care about the same things as them -- which means tech, but also other news. Among the stories Kevin and Alex highlighted this week were the new Indiana Jones trailer, the death of the HD DVD format, and . . . Castro's retirement. Yup. They think a new government in Cuba is cool. Not as cool as Indiana Jones, but close.

Flush your idea of digg's audience down the toilet. First, all they had to do was announce they were coming to Saint Louis and hordes of people people showed up. I met or heard about people who drove all the way from Kansas City (four hours) and Minneapolis (more like ten). The audience was about 25% women. And while it was dominated by 21-30 year olds, you would be hard pressed to call these folks technogeeks. These were just people who enjoyed being part of an idea -- the idea of a guy on the net saying and doing whatever he feels like.

Diggnation's sales manager told me they charge $16K for a sponsorship. Kevin and Alex talk about the sponsors on air, like Johnny Carson used to do, but with a lot more profanity (and real enthusiasm). There is no focus group. There is just a guy who knows what his audience wants -- because, after all, he has a Web site where they vote on it.

Do you think big media can really get their heads around this? Any of it? I don't think so.

Note: I'm embedding last week's podcast since this week's isn't edited yet. When it comes out I'll replace it. Now you can see what I saw (below). Profanity included.

by Charlene Li

The 60 Minutes segment on Facebook is being well covered by the usual players TechCrunch, Silicon Alley Insider, et. al) and Kara Swisher has an excellent summary. Here's the video as well, so you can see it directly.

Reading the reaction to the video, especially from the peanut gallery of Facebook and fellow industry watchers, I have a few thoughts:

- Many people said they didn't learn anything new. Come on -- how many of you honestly expected that Facebook (who are notoriously not forthcoming) going to say something new and interesting on 60 Minutes?

- This was groundbreaking, not because of any new news, but because it was completely new for the mainstream. The vast majority of my social circle is *not* on Facebook, and there's now a fair chance that they know at least a bit more.

- Facebook won/lost from the additional exposure. You can say that Facebook came out looking pretty good, others will say that the dive into Beacon at the end potentially scared off potentially new users. I say it was a fair, balanced look at a company that has a lot going for it, and lot to figure out still.

- Google will be challenged by Facebook -- and LinkedIn, and Bebo, et. al. This was my very small contribution to the segment, so I think this deserves a bit of elaboration. Right now, Google is the search leader -- and there's no better place to go to look up *information* like the lyrics for a song, or a list of hotels in Maui. But when it comes to opinion -- such as the best places to visit in Maui for a family with young kids -- Google falls flat. What's better is getting advice from people who both have been to Maui with their own kids *and* also know the interests of my kids.

Here's another example: I recently asked on LinkedIn Answers the best programming language to teach my son (must be signed-in to LinkedIn to view). I received 28 answers, but more importantly, I can see the background for the answerers -- is the person a software engineer or a Web designer? That provides context, which is extremely important in the answer. Google is great at finding facts, not so great (at least today) at helping me make complicated decisions. For that, I need advice, and social networks like LinkedIn and Facebook provides the context for that advice.

- "Is Mark Zuckerberg the right person to run Facebook? Is he too young?" I was asked this question by Leslie Stahl, but it didn't make it on the air. I don't think it's an issue of age - as a first time entrepreneur, we'd be having this conversation regardless of whether he's 23, 33, or 43. He's made mistakes along the way, especially with Facebook Beacon, but remember, he also greenlighted Facebook Platform which has arguably reshaped the entire way we think about this space. That type of vision is what Facebook needs right now, especially if they want to take on much larger, aggressive players like Google. What they don't need -- at least not for a while -- is a "mature" CEO who lacks the vision but abounds in management experience. A better question to ask is if Mark and his team have the right level of judgment that's needed to succeed, especially when it comes to understanding user privacy and advertising sensitivity. This appears to be their repeated blindspot, and they would do well to learn from their mistakes. That's the core of judgment, which is gained only through experience.

- Is Facebook worth $15 billion? This was never a significant issue raised during the piece, and I think rightly so. There's a small group of people -- Microsoft and Facebook's other private equity investors -- who agreed to that valuation. Otherwise it doesn't matter. Lonely CEO Media put it well -- the more important question is does Facebook provide value to users and advertisers trying to reach them. As long as they focus and deliver on this, they can potentially be worth a great deal of money. But is it $1 billion, $10 billion, or $15 billion? I'm not qualified to run those calculations, nor do I have close to enough information to even begin.

Again, I'd like to hear your thoughts about the segment, in particular, what people *outside* of the industry are buzzing about it. After all, in the echo chamber of our industry, our opinion counts for much less than what is filtered by 60 Minutes to the mainstream.

 by Charlene Li

In December, I received a call from the producers of 60 Minutes, the longest running news program on broadcast TV. They were doing a segment on Facebook and wanted to know if I could provide background for the story.

Wow. I couldn't believe that they were doing an entire segment on Facebook. Note that 60 Minutes' audience isn't exactly that familiar with social technologies -- after all, the average age of its viewer is  around 50-60 years old (note: I couldn't find the exact age in time for this post, and this could be part of Les Moonves effort to move CBS News to a younger demo.) All the more reason why I jumped at the opportunity to try to explain the significance of  Facebook and social technologies to this audience. (Besides, who wouldn't jump at the chance to be on 60 Minutes! THE 60 Minutes!)

I was also intrigued about how 60 Minutes would approach the story. Coming from newspapers), I've always had a great deal of respect for 60 Minutes and the quality of reporting (Rathergate not withstanding). Would they try to "dumb" it down? Or would they dig into the intricacies of Facebook, its users, and the hyper-competitive, dynamic environment?

So off I flew to NYC for the shoot. I sat in the chair while they adjusted lights (for the curious, here are two photos of me on the set. And for the even more curious, I did my own make-up). In a little while, Leslie Stahl came in with a stack of papers with questions on them.  I have to admit, I do tons of media interviews, and I was really, really nervous. After all, this was 60 Minutes!

The tape started to roll, Leslie asked her first question, and then ensued the best media interview experience of my life. Leslie was completely prepared, totally on top of the subject, and followed up with poignant questions. It flew by in a blur and I had a blast.

The feature will air this Sunday, Jan. 13th at 7pm ET/PT on CBS is available online. I haven't seen the segment yet, but do know that I'm in it (my 15 seconds of fame). From my interview, I believe that 60 Minutes will do an admirable job boiling down a complex, dynamic subject into 15 minutes. I hope that some of you will watch it (or TiVo it) and come back to comment on this post. I'd like to know if you thought that 60 Minutes -- the epitome of "mainstream media" -- got it right. If not, what did they miss, and how can we as an industry tell our story better?

by Charlene Li

The Data Portability Workgroup (DPW) announced today that Google, Plaxo -- and the big surprise -- Facebook, will be participating in discussion on how users can "access their friends and media across all the applications, social networking sites and widgets that implement the design into their systems."

This couldn't have come at a more perfect time, especially given the flap over Robert Scoble scraping Facebook (and note that he's also a part of the DPW).

A typical day for me includes dozens of email notifications from each of the following services: new "friends" on Facebook, "followers" on Twitter, "connections" on LinkedIn, "business connections" on Plaxo, and the latest that has put me over the edge, "trust contacts" on Spock. Social networking fatigue has finally hit me.

That's five services where my business connections find me. Five services that all require me to navigate from the email to their respective Web sites and confirm the relationship. And it's four services too many.

The reality is I have one social graph, and up to now, it's been pretty content hanging out, in its limited fashion, on LinkedIn. Even with the advent of Facebook, it's been pretty manageable. But the new reality is that business social networking has finally caught on, and the proliferation of niche "social networks" means that these five social networks will likely grow to 10, 20, who knows how many. And the worst part about it is I don't have the time, energy, or patience to manage all of these relationships, yet I know it's crucial.

This is insanity.

Here's an example. Josh Bernoff and I are friends, connected, etc. on virtually every social network. I should be able to state in one place that we are co-authors, and it would be replicated everywhere else. It doesn't matter where I state it, but once I say it, please please please don't make me say it again again and again. And please don't make me have to invite Josh each time we, or our extended networks, join a new service.

And the way to solve it is to give me back control over my social graph. If 2007 was the year of the open social application platform, then 2008, I believe, will be the year of the "open" social graph. There' s a reason why I put parentheses around "open" because it's a pretty loaded word. I don't think MySpace, Facebook, LinkedIn, et. al. will make their respective walled garden social graphs freely available for people to use outside of their own sites. But if they are smart, they will make it much, much easier for their members to leverage their expressed social graphs.

And that's the reason why I think Facebook has joined the Data Portability Workgroup. By joining the workgroup, they haven't committed themselves to opening up their social graph. I admit, this is a potentially a pipe dream because anyone who is in the position of power -- like MySpace, Facebook, or LinkedIn -- have little incentive to open up their social graph vaults for start-ups to exploit. But Facebook et. al. are smart, and know that unless they participate, they can't influence the outcome to of the open social graph to their benefit.

But I think there are players missing from the table -- communication portals, Yahoo!, Microsoft. and AOL, as well mobile service providers. This is because they own a substantial piece of the social graph as expressed nominally through emails, address books, instant messaging buddy lists, and SMS activities.

I wrote about this waaaay back in July 2004 in my first social networking piece for Forrester. This is what I wrote, and the accompanying graphic:

Users map their relationships with other people, either by personally inviting those individuals into the network, as with Friendster or LinkedIn, or by using software like Spoke Software to scan emails and instant messaging (IM). In the future, social networking software will also work with mobile carriers — eager to retain and monetize users — by importing call detail records to track the frequency and length of calls between social network members.

Relationship Mapping Will Tap Into Technologies To Make Maintenance Easy

From "Profiles: The Real Value Of Social Networks", July 15, 2004.

The idea is we already have social graphs that are expressed in the activities that we do every day -- the emails we send, calls we make, and meetings we have.

Facebook Beacon was an attempt at this, at least in the online sphere. And it shows how ladden this space is with privacy and transparency issues. That's going to be a core piece of the work ahead of the DPW, trying to figure out who has control over what, when, and how it can be monetized. At the core HAS to be user control and privacy, but up for debate is who ultimately "owns" the social data that's created, either explicitly or implicitly through our actions.

Now it's your turn -- let's get specific about what the open social graph means to us, and how we as users want to see it develop. After all, it's *your* social graph -- let's make sure that we have a seat at the negotiating table as well. Comment below, or email me your thoughts.

Facebook finally launched Friend List, a way to organize your friends into different categories. This is not to be confused with the Facebook application Top Friends which allows you to identify your best 32 friends ( an activity fraught with consequences, IMHO).

I've been waiting for this feature for a long time, as my Facebook presence is primarily about my public persona. Yet, I'm beginning to have "real" friends on Facebook and it's tough to share anything with them that I don't share with the rest of my network, e.g. photos of me with my kids, updates about family vacations, etc.

Friend List is a start, but it lacks privacy controls that would really make it useful. Also, I have over 500 friends in my network, so it's painful having to go through them and put them into the various lists (I'm so far on the letter "e", and finally had to take a break from the tedium).

There's also no way today to see updates from each group -- if I'm at home in the evening, I want to catch up with my close friends, family, and fellow exhausted moms. At work, I want to focus on my professional networks.

What lists have I created? They reflect not only the networks that I'm in, but how I plan to connect with them on Facebook. Here's my list as of now, and how I would *like* to connect with them via Facebook:

- Close friends (personal updates, photos)
- Family (same as close friends, but also coordinating family events)
- Forrester (current employees as well as alumni)
- Moms (sharing parenting tips, getting advice from my trusted network of moms)
- PR (people who usually are pitching me, so communicating my research agenda)
- Press (updating them on topics I'm covering)
- Smart (people who I think are just plain smart that I want to stay in touch with)

This makes me wonder what to do with anyone who doesn't fall into one of these lists, or my other school/work related networks. I've pretty much been accepting all friend invitations, but realize that I may hit the 5,000 friend limit at some point (which is what happened recently to Mark Cuban).

My strategy -- to eventually migrate people who have friended me because they want to *follow* what I'm doing/saying because I'm a Forrester analyst to my Facebook Page. (The problem: if you do a search today for "charlene li", you can't find the page!)

What it means: Professional and business social networking sites will find it more difficult to compete if Facebook is able to successfully allow people to distinguish between their various social graphs. The reality is, we need "friend management" tools that allow us to organize our complicated, inter-connected social networks from real life.

Friend List is just newly launched, but I believe it provides the foundation for many several services. In particular, imagine social applications like My Questions or Movies filtered through specific friends lists. I'm looking forward to it -- Facebook will become all that more relevant and addictive if it's able to truly reflect the complexity of my personal social graph.

by Josh Bernoff

I just met with Elance President and CEO Fabio Rosati.

If you don't know the site, it's best described as an eBay for services. Need a logo, some code, or a contract reviewed? Search for providers. Need work? Bid on projects.

Timothy Ferris has endorsed it (video right on the home page) which makes sense -- Elance is quite useful if you're trying to outsource most of your job and get a 4-hour workweek.

The company claims 70,000 active members, split nearly evenly between those doing the hiring and the freelancers who do the work. At the current run rate they're processing $48 million a year of business. Elance makes money from membership fees and taking a 6.75% to 8.75% cut on transactions. That sounds high, but it also includes the credit-card fees. Not everyone is happy with the fees,  but Fabio claims as the number of members goes up he'd like to bring the fees down.

While this is a successful formula -- they help you find trusted people by tracking their reviews, like eBay -- and we expect it to continue, here are a few nuggets that came to mind:

• We find it interesting that the company is concentrating on the small business market. Small businesses often don't have all the skills they need and need to outsource, but don't have a big bureaucratic process for hiring freelancers. We've seen that small business is a sweet spot for lots of service-oriented communities, like Constant Contact's ConnectUp! and Quickbooks' community. If you're in the B2B space and have a choice, start with a small business community.

• Having established a community of 70,000 people, there's a lot more to make out of Elance. Like Quickbooks, they should set up discussion forums about solving small business and freelancer problems (e.g. how to get the word out, how to hire your first employee, dealing with family members who want free stuff) that they all have in common.

• Elance concentrates on "virtual" services that can be delivered electronically (think proofreading, graphic design, technical writing). But small businesses need lots of other kinds of freelance help (on-site bookkeeping, interior design, photography). The difference -- the suppliers need to be local. Fabio told us the site is beefing up its local search -- now they should expand the types of services that can be sold.

Would you use this service? How would you improve it? And if you've had experience with these guys -- good or bad -- send me a comment.

Tags: Elance, bernoff, Forrester Research, Groundswell

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by Charlene Li

I just received word from Facebook that they will be making significant changes to Beacon. I've included the full text of their statement below.

As you may know, I had a situation with Beacon where information from Overstock was sent to Facebook without my knowledge. Because I took no action, the information appeared on my profile.

This is a definitely a step in the right direction -- I argued for greater transparency along with many other people, and it appears Facebook has heard the protest. But given the concerns out there, I think Facebook has to do a lot more to regain the trust of not only its members but also of its partners. Here's a quick summary of the major changes and what it means:

- Facebook members will be given clearer notifications of information sent by partners to Facebook, on both the partner site and on Facebook. Beacon also won't send information to Facebook if it believes that members didn't see a pop-up on the partner site. This was a major problem in my situation -- if a Beacon notification did appear on Overstock, I never got a chance to see it.
- Adding Beacon-generated stories will require an explicit opt-in by the member. Before, if the member did nothing, the story would appear. The changes mean that the user HAS to approve the addition of the story -- so no more inadvertent discoveries of purchases by your friends. (In my the comments of my original post, "Will" bought an engagement ring on Overstock -- and his friends, fiance, fiance's friends, etc. all found out about it)

- If you take not action, stories will be archived and still available for you to take action on later.

- There will be no opt-out option of Beacon, either at the partner level or universally from Facebook. That means that if you really, really can't stand the idea of your information traveling between sites, you have to either never use sites that deploy Beacon or stop using Facebook.

It's this last point that I think is most interesting. Facebook obviously wants to keep Beacon going, and it has taken the first step to give members greater control over when information is posted. I, for one, am comfortable with this, as I find it a pretty convenient way to publish information (like when I bought Beowulf tickets on  went to see Beowulf).

So MoveOn and many of us pushing for change got what we wanted -- the ability to opt-in to stories that appear on our profile. But I believe some privacy advocates will continue to loudly agitate for the full dismantling of the Beacon program. I don't think this will have that big of an impact on members -- after all, MoveOn had 54,000 members of its group as of today, which is significant, but nothing like the hundreds of thousands who petitioned for change after News Feed was introduced last year.

The greater impact will be on nervous partners, some of whom -- like Overstock -- have withdrawn their Beacon participation. Most have taken a wait-and-see approach, weighing the benefits of exposure to their customers' friends network against possible push-back from privacy advocates. My concern is that this mistrust of Beacon spills over and dampens the already nascent beginnings of social media marketing.

It's imperative and in Facebook's best interest -- and the interest of the social networking marketing industry as a whole -- that Beacon be a program that is clear in its intent and execution,and wins over the trust of members and partners.

I'd love to know your thoughts -- has Facebook gone far enough with these changes, or do they need to do more?

Here's the release:

Facebook Update on Changes to Beacon
No stories will be published without users proactively consenting

We appreciate feedback from all Facebook users and made some changes to Beacon in the past day. Users now have more control over the stories that get published to their Mini-Feed and potentially to their friends’ News Feeds.

Here’s how the Beacon changes work:

- Stories about actions users take on external websites will continue to be presented to users at the top of their News Feed the next time they return to Facebook.  These stories will now always be expanded on their home page so they can see and read them clearly.

-  Users must click on “OK” in a new initial notification on their Facebook home page before the first Beacon story is published to their friends from each participating site. We recognize that users need to clearly understand Beacon before they first have a story published, and we will continue to refine this approach to give users choice.

- If a user does nothing with the initial notification on Facebook, it will hide after some duration without a story being published. When a user takes a future action on a Beacon site, it will reappear and display all the potential stories along with the opportunity to click “OK” to publish or click “remove” to not publish.

- Users will have clear options in ongoing notifications to either delete or publish. No stories will be published if users navigate away from their home page. If they delay in making this decision, the notification will hide and they can make a decision at a later time.

- Clicking the “Help” link next to the story will take users to a full tutorial that explains exactly how Beacon works, with screenshots showing each step in the process.

These changes are in addition to those made earlier to improve the notifications on partner sites as follows:

- Users were sometimes moving away from a page before a notification could be fully displayed. We changed the process so that we confirm the full display of the notification before any information can be sent back to a user’s Facebook account.

- The notification appears more rapidly and is more clearly displayed.

There has been misinformation in the market about some key aspects of how Beacon works:

- Participation in Beacon is free for all partner sites.

- Beacon only allows for the sharing of specific actions on the specific sites participating in Beacon.

- Beacon only has the potential to display actions to a selection of a user’s friends through News Feed and on a user’s Mini-Feed.

- Facebook is not sharing user information with participating sites and never sells user information.

As with all its products, Facebook will continue to iterate quickly and listen to feedback from its users.

I put a lot of trust in sites like Facebook to do the right thing when it comes to privacy. After all, the only stuff that gets out into the public is the stuff that I actually put in.

Until now.

Earlier this week, I bought a coffee table on Overstock.com. When I next logged into Facebook and saw this at the top of my newsfeed:

I was pretty surprised to see this, because I received no notification while I was on Overstock.com that they had the Facebook Beacon installed on the site. If they had, I would have turned it off.

I used my personal email address to buy the coffee table, so I was puzzled why and how this "personal" activity was being associated with my "public" Facebook profile.

(Since I was on Facebook, I updated my status to say that I was trying to figure out Facebook Beacon. And Scott Rafer instantly messaged me that he could explain all -- which he very succinctly did. Thank you Scott!)

Facebook Beacon is merely a small piece of script that allows the partner site to put a cookie on your  browser. So when I bought the table, an Overstock cookie was created, which then transferred the information to Facebook. Facebook then checks to see that the same browser is logged into Facebook, and shows the information. I'm not sure of all of the details, but I suspect that if I had logged into my "personal" Facebook account first (yes, I have two Facebook accounts and unless you know my personal email, you won't find my truly personal Facebook profile), that Overstock activity would have been logged to that Facebook profile.

So there's no checking or verification of email address, name, etc. to verify that the activity on Overstock is being done by the same person logging into Facebook. Imagine my horror if items were added to my NewsFeed because my kids were using my computer ("Charlene played DragonFable last night for 3 hours").

So I'm joining a growing chorus of Facebook critics that Beacon has some serious problems. Facebook has made the point that Beacon isn't sharing information publically, but with your friends. That's correct, but I think both the critics and Facebook are missing the point.

The biggest problem is the lack of transparency. Facebook is right in that I would really like to have some things that I do on third party sites to conveniently appear in newsfeed, e.g. events I'm attending from Evite or eBay/craigslist listings so that my friends know about them. That's the promise of Beacon. But I need to be in control and not get blindsided as I did in the example above. I was seriously wigged out, but wouldn't have been if Overstock had simply told me that they were inserting a Facebook Beacon and given me the opportunity at that time to opt-in to Beacon.

And this is the problem for Facebook -- they aren't in control of what their Beacon partners do to notify people that this is happening. Facebook can only control this from their own interface, when the information has already been transmitted between sites, and without my explicit permission.

There's a fine line that gets crossed when behavior data slips from being a convenience to being Big Brother. This is one of those times. Give me back my control by letting me opt-in (not opt-out as is currently the case), or I'm installing the Beacon Blocker.

I'd love to hear your perspective on this issue -- and please send me examples and screenshots!

Update 11/23/07: The plot thickens. It turns out that my husband and I inadvertently both bought the same coffee table from Overstock.com on the same day (yeah, not the greatest spousal communication going on!). I suspect that the order that made it on to my Facebook profile was actually HIS order, because I had additional items in my order.

So that means when my husband purchased the coffee table, because the Facebook cookie on that machine was for my Facebook account (my husband is not on Facebook), the purchase was attributed to my profile. He also did not have any notification that Overstock.com was sending the information to Facebook.

Lastly, some of who have friended me noted that I bought Fandango tickets to Beowulf Wednesday night. I received a very clear pop-up notice at the end of the transaction, and had no problem with that information being added to my profile. Granted, I had advance notice that this would likely happen, so to some people's point, i think that this is a matter of people getting used to this feature, much in the same way that it took a while for Newsfeed to grow on Facebook users.

But remember that Facebook made some significant changes to Newsfeed after it was launched, namely, giving people the ability to control what items made it into the newsfeed, and who in your friends list could see it via limited profiles.

I think that Facebook Beacon will have to undergo some significant retooling -- it has a lot of potential in terms of tying together aspects of my online life, but as I wrote above, I need to be able to have total transparency and control on when this is happening. Reigning in and policing partners like Overstock.com will be an essential -- and tough -- thing to do, especially if Facebook switches Beacon to be opt-in.

by Charlene Li

The video highlights from our Consumer Forum 2007 are now available. Josh and I were keynotes and we spoke in details about some of the key highlights from our book. Below is a summary of the keynote speakers and speech topics. In particular, I highly recommend the speeches by Christie Hefner and Henry Jenkins.

***Note that you need to use Internet Explorer to use the navigation and see the slides.***

by Charlene Li

(Note: this was originally posted on Harvard Business Online, which is part of Harvard Business School Press, the publisher of our upcoming book).

As an analyst, I’m often asked by people why they should bother with services like LinkedIn, Facebook, and MySpace, both from a personal as well as corporate perspective.

Let’s start with a fundamental premise – that all business is social and personal. Business involves people and communications and we all prize “networking” skills and opportunities. Businesses don’t strike deals with each other – people do. And we build bonds by talking about everything from sports teams and the weather to our families and hobbies.

So we as business people already engage in social networking every day, primarily through phone calls, emails, meetings, and events. The same activities take place on social networking sites – people share tidbits and moments that build relationships.

Yet, many people when they first go and experiment with a site like Facebook, don’t find it relevant to their professional lives. There are two reasons for this: 1) Your professional colleagues are likely not actively using Facebook; and 2) Most of the applications today aren’t designed for a business context.

Let’s take the first problem – you may not have many friends in these social networks. This was my problem – it was only this past spring that people I actually know started using Facebook. My friends are posting links, book reviews, the events they were going to, and suddenly, I now find myself at a near addiction with Facebook. I went to an event because five friends said they would be there. And when I saw them at the event, I congratulated them on closing a round of financing and asked about their recent vacation – all of which had been shared on Facebook. What’s the business value of staying on top of your network? As we know from experience, priceless.

Now for the second problem. Business applications on services like Facebook have yet to take off, which is why people like Tom Davenport have a hard time seeing the business value of social networking sites. I don’t blame him – after all, the most popular applications on Facebook today include such frivolous things like playing Scrabble and Vampires (where you “bite” your friends – don’t ask). That’s because these applications are being designed by 20-something developers for their 20-something friends.

But remember: The notion of creating social applications is only 6 months old – we are in the early days here. Business-oriented developers are just now waking up to the possibilities, and the audience that would use these tools are just discovering social networking. It’s going to take some time for these two sides to find each other and develop an ecosystem for business applications.

Here’s an example – LinkedIn described to me a new social application that would show events in your industry that are coming up – and who in your network is going to them. It will also show you people in that city that you could connect with. So if you know that colleagues, suppliers, partners, funders, customers, etc. are going to be gathering, you’re going to want to be there too.

There’s one final business value that companies are already seeing – and that’s reaching the people who are using social networking sites. Advertising on social networking sites won’t work well – but communicating with people, talking with the “fans” of your products on Facebook makes a lot of sense. Victoria’s Secret has badges that its enthusiasts can download on MySpace on put on their profiles for their friends to see. Ernst & Young (yes, an accounting firm!) answers questions from college students on Facebook – people they are trying hard to recruit.

So don’t write off social networking sites as merely social playgrounds for the young. Your customers, prospects, and employees are exploring and extending their relationships there. Some of you will be bolder in creating business value in these networks while others will wait for the pioneers to carve out the paths. But ignore these new communities only if you believe your customers are not there – and there are few instances where this will be the case.

Does your business embrace social networks? Or is it taking a hands-off approach?

Tags: Facebook , MySpace,